Kurdish crude arrives at Ceyhan, but no sale without Iraq consent: Yildiz

London (Platts)--2Jan2014/809 am EST/1309 GMT


The first oil piped directly from the northern Iraqi region of Kurdistan has arrived at the Turkish port of Ceyhan, but it will not be forwarded for sale to international markets until the federal Iraqi government gives its approval, Turkey's energy minister Taner Yildiz said Thursday.

Yildiz was quoted as saying by state news agency Anatolia that the Kurdish crude was currently being stored in tanks at Ceyhan.

"However, we haven't started exporting it to Europe without the consent of Baghdad," Yildiz was quoted as saying.

"We repeat that oil extracted in any part of Iraq, belongs to whole country," he said.
Yildiz also said that the initial flows from Kurdistan would average 300,000 b/d but would gradually increase to 400,000 b/d.

Tests were completed in late December on using one of the parallel lines that make up the Kirkuk-Ceyhan oil pipeline to move Kurdish crude to the Turkish port.

However, the main issue remains winning Baghdad's approval to begin selling the Kurdish crude.

The Iraqi government in Baghdad has repeatedly opposed the export of oil and gas from the region, insisting that under the Iraqi constitution only Baghdad has the right to authorize exports.

The central Iraqi government has said it will take action against Turkey if it allows oil to be exported without Baghdad's approval, claiming it is a violation of the Kirkuk-Ceyhan intergovernmental agreement.

Officials from the Kurdistan Regional Government (KRG) and from Anglo-Turkish firm Genel Energy have confirmed that the pipeline from the Genel-operated Taq Taq field is now connected to Kirkuk-Ceyhan at a measuring station established by the KRG, close to the border with Turkey.

Turkey and the KRG said in November they had reached agreements to allow the export of crude oil and natural gas from the Kurdistan region to Turkey but the agreements had yet to be ratified.

Previously Turkish and Kurdish officials had suggested that payment could be made into an escrow account at a bank in Turkey with 83% going to the Iraqi central government and 17% to the KRG.

--Stuart Elliott, stuart.elliott@platts.com
--Edited by Maurice Geller, maurice.geller@platts.com

 

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