KRG says PKK oil pipeline sabotage cost $250M

ERBIL, Kurdistan Region — A Kurdistan Workers’ Party (PKK) sabotage operation against a Kurdistan region oil pipeline in Turkey has temporarily halted oil export to Turkey since last week and cost the Iraqi Kurdistan Regional Government around $250 million in loss of revenues and wasted crude oil, according to a statement by the KRG Ministry of Natural Resources Sunday.
 
The strongly worded statement condemned the action carried out by fellow Kurds, and said it had harmed Kurdistan incomes and long-term interests.

“The oil exports via the pipelines are the KRG’s principal source of revenue and enable the KRG to pay people’s salaries and help the government and people of the Kurdistan region resist the grave challenges the region is currently facing,” the statement said.

"Kurdistan region is facing unprecedented threats from Islamic State terrorists, the budget cuts imposed on the Region by the federal government in Baghdad, and the influx of over 1,800,000 refugees and IDPs," contiued the statement.

The PKK armed wing, the HPG, claimed responsibility for the operation on July 27 in the Sirnak-Cizre area near the Iraqi-Turkish border. It initially described it as “sabotage against Turkey’s interests,” but a PKK statement Sunday denied the HPG attackers had acted under direct orders and said the units “did not know to whom the pipeline belonged.”
 
The KRG statement said the action did not harm Turkish interests since the halt of oil exports mostly hurts the KRG, which has relied on oil exports to Turkey as its main source of income since Baghdad ceased paying the KRG revenue shares in December 2014.

“Turkey stands to suffer relatively minor economic damage through the loss of transit fees from the pipeline to Ceyhan. Therefore, some 99 percent of the burden of these attacks is borne alone by the Kurdistan region of Iraq and its people,” the KRG statement said.

When the pipeline is in full working order, the KRG exports around 550,000 barrels of oil a day (bpd) to the Turkish Ceyhan port on the Mediterranean Sea. The KRG has announced it could increase the export to 1 million bpd by the end of 2016, including exports from the Kirkuk oil fields, which are currently outside KRG administration but patrolled by its Peshmerga forces.

Iraq’s ministry of oil said Sunday it had exported more than 96 million bpd in July with total revenue of $4.9 billion.

Asim Jihad, a spokesperson at the oil ministry in Baghdad, said the growing production was possible despite an expected decline in oil exports from Kurdistan.

Jihad told reporters that just less than 95 million bpd were exported from Iraq’s southern port of Basra last month apart from 1.26 million bpd from the Kurdistan region to Turkey.