Kurdish oil exports surge despite security concerns
ERBIL, Kurdistan Region - The Kurdistan Region is ramping up its oil exports to Turkey despite the regional security crisis, according to Turkish officials.
“The rate of crude oil flow from the Kurdistan Region to the port of Ceyhan reached 240,000 barrels per day (bpd) since the beginning of this week,” Turkish Energy Minister Taner Yildiz said in a statement.
This marks a significant increase in exports, which were previously estimated at around 200,000bpd on average.
The increase in output may help offset lower prices in global oil markets. The benchmark Brent crude fell this week to less than $83 per barrel, the lowest level since 2010.
A new pipeline connecting the Kurdish oil fields to Turkey was finished last year. The Kurdistan Regional Government (KRG) announced the first shipment of Kurdish oil through the pipeline in May.
The KRG has earned approximately $1.3 billion from selling 14 million barrels of oil from February to September, according to Sherko Jawdat, the head of the energy committee in the Kurdish parliament.
The money has been deposited at Turkey’s Halkbank, which has released $400 million of the money to pay civil servant salaries, Jawdat told Bloomberg earlier this month. This money amounts to less than 17 percent of the total revenues; most of the remaining funds will go to Baghdad when the Kurdish Region and the central government agree upon a new national oil policy.
Both parties are locked in a bitter dispute that drove Kurdish lawmakers to quit the government earlier this year although in recent days they have pledged to rejoin the cabinet. Baghdad considers the region’s independent oil export policy to be illegal while Kurdish officials argue it is permitted under the Iraqi constitution.
The Iraqi state oil marking company (SOMO) has sued the Turkish government and a Turkish pipeline company for facilitating independent Kurdish oil sales. It has also intimidated potential buyers, operators, and shipping companies, threatening legal action and banishment from Iraq’s southern oil-rich fields, which still hold the vast majority of the country’s resources.
Analysts believe that the low price of oil, reflecting abundant world supply, will make buyers less likely to incur Baghdad’s wrath by buying Kurdish crude.
Nonetheless, exports are expected to rise through to the end of the year. Norwegian oil and gas company DNO announced earlier this week that it would finish a new pipeline that would boost export capacity from its Tawke field to Turkey.
It expected work to be completed by the year’s end, taking steps to reach a 200,000bdp production target despite delays. Like many producers, DNO has been hindered by the flight of international contractors since Islamic State militants attacked the region in June.
Meanwhile Afren oil and gas company, which has investments in two Kurdish blocs, sacked its chief executive office and chief operating officer after the company’s law firm found that the two had created a special purpose vehicle to pay $17.1 million in bonuses to themselves, according to a company press release.
The company’s operations in Kurdistan have continued as normal.
“The rate of crude oil flow from the Kurdistan Region to the port of Ceyhan reached 240,000 barrels per day (bpd) since the beginning of this week,” Turkish Energy Minister Taner Yildiz said in a statement.
This marks a significant increase in exports, which were previously estimated at around 200,000bpd on average.
The increase in output may help offset lower prices in global oil markets. The benchmark Brent crude fell this week to less than $83 per barrel, the lowest level since 2010.
A new pipeline connecting the Kurdish oil fields to Turkey was finished last year. The Kurdistan Regional Government (KRG) announced the first shipment of Kurdish oil through the pipeline in May.
The KRG has earned approximately $1.3 billion from selling 14 million barrels of oil from February to September, according to Sherko Jawdat, the head of the energy committee in the Kurdish parliament.
The money has been deposited at Turkey’s Halkbank, which has released $400 million of the money to pay civil servant salaries, Jawdat told Bloomberg earlier this month. This money amounts to less than 17 percent of the total revenues; most of the remaining funds will go to Baghdad when the Kurdish Region and the central government agree upon a new national oil policy.
Both parties are locked in a bitter dispute that drove Kurdish lawmakers to quit the government earlier this year although in recent days they have pledged to rejoin the cabinet. Baghdad considers the region’s independent oil export policy to be illegal while Kurdish officials argue it is permitted under the Iraqi constitution.
The Iraqi state oil marking company (SOMO) has sued the Turkish government and a Turkish pipeline company for facilitating independent Kurdish oil sales. It has also intimidated potential buyers, operators, and shipping companies, threatening legal action and banishment from Iraq’s southern oil-rich fields, which still hold the vast majority of the country’s resources.
Analysts believe that the low price of oil, reflecting abundant world supply, will make buyers less likely to incur Baghdad’s wrath by buying Kurdish crude.
Nonetheless, exports are expected to rise through to the end of the year. Norwegian oil and gas company DNO announced earlier this week that it would finish a new pipeline that would boost export capacity from its Tawke field to Turkey.
It expected work to be completed by the year’s end, taking steps to reach a 200,000bdp production target despite delays. Like many producers, DNO has been hindered by the flight of international contractors since Islamic State militants attacked the region in June.
Meanwhile Afren oil and gas company, which has investments in two Kurdish blocs, sacked its chief executive office and chief operating officer after the company’s law firm found that the two had created a special purpose vehicle to pay $17.1 million in bonuses to themselves, according to a company press release.
The company’s operations in Kurdistan have continued as normal.