ERBIL, Kurdistan Region - The Kurdistan Region has exported more than 34 million barrels of oil this year worth almost $3 billion, the ministry of natural resources announced on Friday.
Almost two out of three barrels exported went via Kurdistan’s new pipeline to Ceyhan in Turkey, which is the focus of a dispute with the government in Baghdad.
The ministry said nearly 300,000 barrels a day of Kurdish crude flowed through the pipeline in the past week, an increase of some 60 percent over the previous four months.
With exports set to rise to 500,000 bpd by the end of the first quarter of 2015, natural resources minister Ashti Hawrami told a forum in Erbil on Thursday that the Kurdistan Region was headed towards economic independence.
He said not even the sweep of Islamic State forces across northern Iraq since June had been able to prevent the flow of Kurdish oil, which had “increased by 60 per cent since the first bullets were fired.”
The ministry said on Friday that since January 34.5 million barrels of oil had been exported, of which 21.5 million barrels were sold through Ceyhan. The balance was trucked to Mersin in Turkey.
The total value of the exported oil in cash or kind was $2.87 billion, of which $2.1 billion was received in cash and $775 million in kind for product swaps.
The net cash received by the KRG after costs during the period was $1.7 billion. The Kurdistan Regional Government had received a further $500 million in prepayment from buyers of crude against future deliveries of oil piped to Ceyhan.
The KRG regards all proceeds from the sale of oil as part of its constitutional entitlement to 17 per cent of Iraq’s revenues, which Baghdad has withheld from the start of the year because of the dispute over independent Kurdish oil exports. Baghdad says all Iraqi oil should be marketed by the state company SOMO.
The ministry said the oil sales fell short of the KRG’s budget share but were “helping the Region survive the serious challenges to its continued welfare and stability: the vital fight against ISIS terrorists, the unprecedented influx of refugees and IDPs, and the economic sanctions imposed by Baghdad.”
In a positive signal to upstream oil companies operating in the region, the ministry said it was important for the growth of the industry in Kurdistan to ensure contractors received payments in line with their contractual entitlements.
Therefore, this month, the KRG would make an initial payment of $75 million on account to producers for exports, with further payments to follow on a regular basis. With further production increases, producers would receive their full contractual entitlements.
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