First cargo of Iraqi Kurdistan pipeline oil sold to Europe

First cargo of Iraqi Kurdistan pipeline oil sold to Europe

ANKARA - Reuters
First cargo of Iraqi Kurdistan pipeline oil sold to Europe

Turkish Energy Minister Taner Yıldız. AA Photo

The first cargo of oil piped from Iraqi Kurdistan was sold to European markets and the revenue will be deposited in Turkey’s Halkbank, the autonomous region said in a statement on May 23.

The Kurdistan Regional Government (KRG) said sales from the Turkish port of Ceyhan would continue despite opposition from the federal government in Baghdad, which has threatened legal action against any company involved in “smuggling” Iraqi oil.

“A tanker loaded with over one million barrels of crude oil departed last night from Ceyhan towards Europe,” read the KRG statement.

“This is the first of many such sales of oil exported through the newly constructed pipeline in the Kurdistan region.”

On the same day, Turkish Energy Minister Taner Yıldız said recently started exports of Iraqi Kurdish oil from Turkey’s Mediterranean port of Ceyhan will most likely go to Germany and Italy.

“The sale has been carried out by Iraq itself. It is a crude oil that is sold to the Mediterranean market, which will probably go to Italy and Germany,” Yıldız said, noting the amount of oil is “slightly below 1.05 million barrels.”

The KRG statement added that the oil revenue would be treated as part of the region’s share of the Iraqi national budget, which Baghdad has partially withheld since the start of the year as punishment for the Kurds’ moves to export crude independently.

The KRG said it remained open to negotiations with Baghdad and would comply with United Nations obligations by setting aside 5 percent of the revenue in a separate account for reparation for Iraq’s invasion of Kuwait in 1990.

Turkey was forced to begin exporting the oil on May 22 after its depots in Ceyhan filled to capacity as it waited for Baghdad and Arbil to work out a deal on revenue sharing, sources told to Reuters.

Iraq’s State Oil Marketing Organization (SOMO) issued a statement late May 22, calling the loading of oil from Ceyhan “an illegitimate deed of the Turkish authorities.”

It said both the Oil Ministry and SOMO “reserve the right to take all legal measures against any company or entity” that loaded Iraqi crude from Ceyhan without Baghdad’s approval.

In late 2013, Iraq’s Oil Ministry instructed a U.S. law firm to pursue legal action against any buyer of Kurdish oil.