Oil Exports From Kurdistan Delayed

Iraqi Kurdistan has not yet started exporting crude oil, despite a reported agreement that exports would resume from 1st February, Iraqi oil ministry sources said on Tuesday.

Two top oil ministry officials, speaking on condition of anonymity, told Platts that there had been no additional oil supplied from two producing fields in the Kurdish region -- Tawke and Taq Taq -- and said they did not know when exports would begin.

The Tawke field, operated by Norway's DNO, has current production capacity of 50,000 bpd and is connected directly by pipeline to the Iraqi northern export pipeline at Feysh Khabur, just before it enters Turkey.

The Taq Taq field, being developed by a joint venture between Turkey's Genel Enerji and China's Sinopec, which has been producing 35,000 bpd, is transported by tanker trucks to a central depot and then fed into the export pipeline to the Turkish port of Ceyhan.

The Iraqi 2011 budget assumes oil exports for the year of 2.25 million bpd, including 150,000 bpd to be exported from the Kurdish province. Baghdad made the resumption of Kurdish exports a condition for the KRG receiving its 17% share of revenues, a provision that angered Erbil and prompted Salih's visit to Baghdad to try to resolve the issue and reach agreement on oil exports.

The KRG began exporting oil from Tawke and Taq Taq on June 1, 2009, but oil flow was halted four months later at the request of the foreign contractors, who insisted on being paid before they would agree to resume exports.

The Kurdish government had argued that since the central government was collecting the revenues from the oil sales, it should be responsible for paying the contractors. Baghdad wanted the KRG to pay out of its 17% share.

According to Platts, it was not immediately clear why exports had not yet resumed. The Iraqi government, in a bid to ease tensions with Erbil, had agreed to pay contractors' costs but not profits.

The exact amount and payment mechanism has not been disclosed.

Dow Jones quotes an Iraqi source as saying that there are no political problems, and that exports will resume in the next few days.

(Sources: Platts, Dow Jones)

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