By John Lee.
Reuters reports that LUKoil, Russian’s biggest non-state oil producer, which is believed to be considering buying ExxonMobil's stake in the West Qurna-1 oil field, has bought oil from Kurdistan in defiance of Baghdad.
Baghdad has long insisted it has the sole right to export oil, but LUKoil's Geneva-based trading arm Litasco has become the third company to buy Kurdish condensate (very light oil), five industry sources have told the news agency.
The other companies to have bought directly from Kurdistan are Trafigura and Vitol; Swiss trader Vitol has just signed a deal to sell gasoil to Iraq.
Those earlier deals provoked an angry response from the Iraqi central government, which said it had the right to "legally pursue all those who participate in smuggling", but according to Reuters Baghdad seems to be turning a blind eye on this occasion.
"After checking with concerned parties, we got confirmation that LUKoil has not purchased any kind of crude for the benefit of the KRG," said an official from Iraq's State Oil Marketing Organisation (SOMO). Iraqi government officials declined to comment.
Industry sources told Reuters that Litasco had chartered the tanker Cielo di Napoli to load around 19,000 tonnes of the Kurdish condensate from the port of Toros at Ceyhan in Turkey; The tanker sailed on 21st November.
Litasco won the tender at a $3.00 discount to naphtha prices, beating competing bids from Trafigura and Socar, one participant said, and bought the condensate through the intermediary Powertrans in a public tender.