Iraq Wants Control Of Kurdish Region’s Oil

Iraq wants the Kurdistan region to stop independent crude exports and to hand over sales operations to the Iraqi state-oil marketer SOMO, the company’s director said on Thursday.

Iraq is talking to Turkey to allow SOMO to sell the Kurdish crude that arrives by pipeline in Ceyhan, the Turkish terminal on the Mediterranean, acting SOMO director general Alaa al-Yasiri told reporters in Baghdad.

About 530,000 barrels per day (bpd) used to arrive in Ceyhan via the pipeline until mid-October, of which about half came from the Kurdistan Regional Government’s oilfields and the rest from Kirkuk, a disputed province claimed by both the Kurdish region and Iraqi authorities in Baghdad.

Output from Kirkuk fell in mid-October, when Iraqi forces took back control of the northern region’s oilfields from Kurdish fighters who had been there since 2014.

Kurdish Peshmerga forces deployed in Kirkuk in 2014, when the Iraqi army fled in the face of an advance by Islamic State militants. The Kurdish move prevented the militants taking control of the oilfields.

The pipeline carried on average 419,000 bpd in October, down from 600,000 bpd in September, said Farid al-Jadir, the director general of North Oil Company, which operates Kirkuk.

NOC should resume exports from Kirkuk through the Kurdish pipeline this month, after the two sides agree on terms of use, Yasiri said. Kirkuk would also export by tanker trucks about 15,000 bpd to the refinery of Kermanshah in Iran, he added.

Yasiri expected an old pipeline that bypasses most of the Kurdistan region to resume operation in three months.

The pipeline was severely damaged by Islamic State after it took over Mosul’s Nineveh province in 2014. U.S.-backed Iraqi forces ousted the group from Mosul in July, after a nine-month campaign supported by Kurdish Peshmerga fighters.

Iraq, the second-largest producer of the Organization of the Petroleum Exporting Countries after Saudi Arabia, supported any future decision by the group to support oil prices, Yasiri said.

OPEC is expected to extend curbs on oil output when it meets in Vienna at the end of month.

reuters