London – The Kurdistan Regional Government (KRG) has denied an international news agency report that it was selling oil through its new pipeline to Turkey at half the world crude price.
A statement from the Ministry of Natural Resources (MNR) expressed surprise and disappointment over a Bloomberg report published on Thursday and headlined: “Half-Price Kurdish Oil Threatens Iraq Breakup With Turkish Help.”
The ministry said it had complained to the American agency, which had later changed the headline. But Bloomberg stood by its claim that oil was being sold at half-price, which the ministry described as false. The agency attributed its information to an unnamed official involved in the trade.
The report came as violence in Iraq prompted a surge in benchmark crude to above $115 a barrel this week.
Exports through the new pipeline to the port of Ceyhan are a highly sensitive issue for the KRG, which has been involved for months in a bitter dispute with Baghdad that predates the latest Iraqi crisis.
What appears to have angered the ministry is that the disputed headline could imply that the KRG is conspiring in the break-up of Iraq and selling its oil cheap, perhaps to overcome buyer resistance to purchasing oil whose ownership is disputed by Baghdad.
“At a time of great tension for Iraq, such shoddy reporting, analysis and editorializing seems calculated to cause further division and mistrust, and could also harm the financial interests of the KRG and Iraq,” the MNR said in the statement.
It said the KRG would never consider exporting and selling Iraq’s natural resources at half price, either now or in the future. The KRG sold oil through the pipeline to Ceyhan on an international commercial market basis, it added.
Despite blackmail and threats by Iraq’s State Oil Marketing Organization (SOMO) and the oil ministry in Baghdad, the KRG had been able to deliver oil to its customers under commercially viable contracts, the statement said. All payments were being made into the KRG’s account in Turkey.
The statement reiterated the KRG position that direct sales of Kurdish oil are legal, constitutional, and fall within the Kurdistan region’s 17 per cent entitlement of the federal Iraqi budget.
The ministry complained that Bloomberg had made no attempt to contact KRG officials for comment or verification of its report. The story had used quotes and language in such a way as to accuse the KRG and Turkey of trying to break up Iraq and steal Iraq’s money.
The statement reiterated a commitment, made in London this week by natural resources minister Ashti Hawrami, that the KRG remained open to dialogue with Baghdad to resolve all outstanding issues on oil and gas within the framework of the constitution.
Hawrami told the Iraq Petroleum Conference in London that the first two consignments of Kurdish oil shipped from Ceyhan had been sold and that two more tankers were being loaded week.
The minister said current Kurdish exports were at 125,000 barrels per day, a figure that would double by July and reach 400,000 bpd by the end of the year. He said the export policy would remain in place “until there’s agreement on 17 per cent or we get our own 17 per cent.”
“We are not going back to where Baghdad can use its red card anytime it wants to,” he declared.
Bloomberg did not immediately respond to a Rudaw request to comment on the KRG complaint.
