Iraq’s Kurdish region to export oil for first time
Iraq’s self-ruled Kurdish region will begin exporting crude oil for the first time on Monday, piping up to 90,000 bpd to its neighbours, officials said.business Updated: May 31, 2009 21:27 IST
Iraq’s self-ruled Kurdish region will begin exporting crude oil for the first time on Monday, piping up to 90,000 bpd to its neighbours, officials said.
Companies chosen by the regional government will pump oil from two Kurdish fields via an Iraqi pipeline to Turkey with the consent of Baghdad in a step that could pave the way to ending bitter domestic feuds over Iraq’s oil wealth.
Initial exports will be around 40,000 barrels per day from the Taq Taq field in the province of Arbil and another 50,000 bpd from the Tawke field in Dohuk, company officials told AFP.
“Piping of the oil will start on Monday morning from the Taq Taq field, pumping it from seven wells,” said Mohammed Okotan, director of the Taq Taq project for Turkey’s Genel Enerji, which is partnered with Calgary-based Addax Petroleum.
“We will try to reach 60,000 barrels a day by the end of this year,” said Okotan, adding that the project aims to double exports in two years.
“The quality of the crude is excellent,” he said.
At the Tawke field, northwest of Taq Taq, Norwegian oil firm DNO will also start pumping oil for export on Monday.
“We’ll start with 50,000 bpd and we’ll see how this operation goes and if we can increase it,” said DNO director of operations Jon Sargent.
Disagreements over oil rights, especially between Baghdad and the Kurdish government, have held up exploitation of much of Iraq’s massive reserves as well as long-delayed hydrocarbons legislation.
Terms of the Taq Taq deal are for Baghdad to receive 88 percent of revenues. of which the Kurd region will get back 17 percent. Genel Enerji and Addax will share 12 percent, Okotan told reporters.
Executives from DNO refused to provide revenue sharing figures, although one DNO official confided that the terms are quite similar to those in the Tawke field.
Iraq is in dire need of revenue to rebuild its shattered economy, especially after oil prices fell from a peak of 147 dollars a barrel last July to a current level just above 60 dollars, putting huge pressure on Iraq’s budget.
The nation derives more than 90 per cent of its revenues from the energy sector.
Iraq hopes to be able to pump six million barrels per day, up from its current stated output of around 2.2 million, within the next four to five years as new projects come online.
The conflict-ravaged country has the world’s third largest proven reserves of oil, with more than 115 billion barrels, behind only Saudi Arabia and Iran.