Kurdistan to go ahead with oil export plans despite Baghdad pressure

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Photo - Iraqoil.biz

Officials of the Kurdistan regional government, Iraq’s autonomous northern region, said on Sunday exporting of crude oil production along a new pipeline to the Turkish border is expected to start by August 2013. The statement comes in open defiance of Baghdad which opposes any control of the regional government on the country’s oil exports.

The Kurdistan region has its own elected government. It also has a well-trained militia force called the Peshmerga. Erbil is resisting Baghdad’s demands of giving up control over its oil resources and halted its oil exports in April after accusing the central government of not remitting payments due.

“In August 2013 we will be able to directly export crude from the Kurdish region’s fields,” Hawrami said at an oil conference in Kurdistan on Sunday. “We will be responsible for exporting oil. It will still be Iraqi oil.”

Iraqi central government insists it is the sole authority that has the right to control oil exports, and dismisses contracts signed with the Kurdistan Regional Government (KRG) as illegal. The KRG insists it has the right to develop its own oil fields.

Hawrami assured Kurdistani government would take the 17% of revenues the region is allowed from Iraq’s national budget once direct exports begin and pass the rest to the federal government.

Officials in Erbil said the first stage of the pipeline would be completed by October this year to carry crude from the Taq Taq oilfield. They added that by August next year, the second phase would be connected to the Kirkuk-Ceyhan pipeline with a capacity of 1 million barrels per day.

Reports suggest Kurdistan is also developing plans to build a separate pipeline that could connect to a refinery in Turkey’s Ceyhan port by 2014.

Last month Kurdistan halted crude exports because it said Baghdad was not fulfilling agreements to pay foreign oil companies working in the region, worsening the conflict between the ethnic Kurdish and mainly Iraqi Arab central government over regional autonomy, disputed territories and oil rights.

ExxonMobil is already operating in Iraq, producing around 370,000 barrels a day of oil from the West Qurna field, under a service contract with the Iraqi government. Baghdad has previously excluded companies operating in the Kurdish region from oil contracts in the rest of the country.

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