Oil rigs in the Kurdish town of Derik, on the border with Turkey and Iraq, on November 25, 2013
Oil rigs in the Kurdish town of Derik, on the border with Turkey and Iraq, on November 25, 2013 © Achilleas Zavallis - AFP
Oil rigs in the Kurdish town of Derik, on the border with Turkey and Iraq, on November 25, 2013
Ben Perry, AFP
Last updated: December 3, 2013

Iraq says it is optimistic over Kurd oil deal

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Iraq is optimistic about resolving a long-running dispute over plans by the country's autonomous Kurdish region to export oil to international markets through Turkey, its oil minister said on Tuesday.

Asked by reporters if he was optimistic about a deal to enable the Kurdish exports, Iraqi Oil Minister Abdelkarim al-Luaybi told reporters: "Yes."

He said Iraq hoped to export 3.4 million barrels per day of crude oil next year, including 400,000 bpd from Iraqi Kurdistan, an area that remains relatively free of the upsurge in violence rocking other parts of the country.

Turkey also voiced hope on Tuesday that an agreement would be hammered out to end the dispute, which centres on Baghdad's insistence that all energy sales should be via the central Iraqi government.

"The ball is now in the court of northern Iraq and the central Iraqi government and I hope they reach agreement and give us good news," said Energy Minister Taner Yildiz whose government has offered to mediate in the dispute.

Tensions have been running high between Baghdad and Ankara over a pipeline which could begin pumping this month oil exports from the Kurdish region to a Turkish port.

"The plan actually for next year is 3.4 million barrels (per day) of Iraq crude oil to be exported, 3.0 million from the central government regions and 400,000 is from the Kurdistan region," Luaybi said in Vienna ahead of a meeting of OPEC to discuss the cartel's production ceiling.

Luaybi said an extra 700,000 bpd would be produced for Iraqi consumption, bringing total output to 4.1 million bpd.

Iraq's oil exports rose for a third month in a row in November but remained below historic highs as the country looks for revenues to fund much-needed reconstruction, data released on Sunday showed.

Average daily exports rose to 2.381 million bpd from 2.25 million bpd the previous month and 2.07 million bpd in September, according to oil ministry figures.

Crude sales brought in revenues of $7.32 billion during November, which also marked a third straight monthly increase.

Kurdistan's prime minister Nechirvan Barzani said during a visit to Turkey last month that the pipeline to the Turkish port of Ceyhan could start operating by Christmas.

Baghdad responded by voicing "strong opposition" to the deals, warning that the opening of the pipeline would seriously damage its relations with Ankara.

Turkey said at the weekend it had reached agreement with Arbil on some trade deals that were in line with the Iraqi constitution.

"But the process has not yet been finalised," the foreign ministry said in a statement on Saturday.

Turkey, which has little natural resources of its own, depends on oil and gas imports from Russia and Iran. It has been seeking cheaper energy suppliers, with Iraqi Kurdistan seen as the best option.

The region has an estimated 45 billion barrels of reserves.

Washington meanwhile said it believes that oil exports should be based on the consent of all relevant parties.

"Our policy on this question has not changed," a US embassy spokesman in Ankara told AFP.

"As always, we want to see the Iraqis develop alternative export routes for their oil and gas to western markets, including new pipelines through the north into Turkey," said the spokesman who did not wish to be identified.

"Any such arrangements should benefit all the people of Iraq, including the Kurds, as well as Turkey, and should be a matter of agreement by all the relevant parties."

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