KRG to raise oil exports to Genel

KRG to raise oil exports to Genel

ABU DHABI - Reuters
Direct exports of crude oil from the Kurdistan Regional Government (KRG) in Iraq’s north to Turkey may reach 20,000 barrels per day (bpd) in a few weeks, the chief executive of Genel Energy said, in a sign that a trade that officials in Baghdad see as illegal is set to grow.

The export of crude by truck to Turkey demonstrates the KRG’s growing frustration with Baghdad as it moves towards greater economic independence.

“The KRG has given us approval to begin trucking relatively small volumes of crude,” Genel CEO Tony Hayward told reporters yesterday, adding that exports of the oil would probably rise to 10,000-20,000 bpd in the next few weeks.

Hayward, former head of U.K. oil major BP, said the Anglo-Turkish company he now leads was getting paid by the KRG for the oil it trucks from the Taq Taq oilfield to Turkey, which pays the KRG.

“It’s government to government. The KRG gets paid, and we receive from them,” he said.

The KRG halted exports through the Baghdad-controlled Iraq-Turkey pipeline last month in a dispute over payments to oil companies operating in Kurdistan, and officials in Baghdad say the trade of Kurdish oil would make it even more difficult to reach a deal on payments.

A new 75 km pipeline linking the Taq Taq oilfield to the existing Kirkuk-Ceyhan export infrastructure should be up and running soon, Hayward said. “It’ll be mechanically completed by the end of the month and fully operational in mid-February.” Hayward said KRG was left frustrated by not getting paid by Baghdad for the oil it sold. “I think they have been very clear they have no intention of surrendering what they consider to be their right to manage their own oil and gas,” he said.