Iraq's KRG Offers to Export 100,000 Barrels per Day of Oil via Federally Controlled Pipelines

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Researched by Industrial Info Resources (Sugar Land, Texas)--Iraq's Kurdish Regional Government (KRG) made an offer to Baghdad to export 100,000 barrels of oil per day to Turkey through pipelines controlled by the central government. The Kurds and the Iraqi government are locked in a row over energy exports. As a "gesture," the KRG said that it "has offered to make a contribution to Iraq oil pipeline exports to give the negotiations the maximum chance of success."

To date, a diplomatic stand-off between the KRG and Iraq's central government over who should control revenues from oil and gas in the autonomous region has largely paralyzed attempts to export. Currently, 1.5 million barrels of oil are sitting in Ceyhan--which has a total of storage capacity of 2.5 million barrels--and are awaiting Baghdad's approval to be exported.

The KRG said its contribution would be 100,000 barrels per day (BBL/d) from the next month onward, adding that exports would continue "while the negotiations are proceeding in a positive direction." For now, the oil would be exported via Iraq's state-owned State Oil Marketing Organization (SOMO) and the revenues deposited in Iraq's development fund in New York, as before. Earlier this year, the KRG shipped more than 1 million barrels of crude directly to Turkey without Baghdad's consent.

With an annual energy import bill of more than $60 billion, Turkey wants to diversify energy supplies in order to reduce its oil and gas dependence on Russia and Iran. The autonomous KRG has built a 300,000-BBL/d pipeline that ties it to Iraq's Kirkuk-Ceyhan pipeline at the border of Turkey.

For detailed information, see January 9, 2014, article - Crude Oil Begins to Flow to Turkey from Northern Iraq after Tough Negotiations.

The International Energy Agency forecasts that Iraq's oil production will double to 6.1 million BBL/d by 2020.

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