Iraq vows to halt oil sales from KRG to Turkey

SYDNEY - Reuters

Iraqi Deputy PM Hussain al-Shahristani, who is also energy adviser to Iraqi PM Nouri al-Maliki, has again warned companies that sell crude oil from the KRG to Turkey. AFP photo

Iraq vowed to take legal action against companies to halt crude oil sales from the Kurdish Regional Government (KRG) to Turkey once again on May 24.

“Any oil that is taken out of the country and payments not made to the Iraqi people through the central government is considered to be taking Iraq’s national wealth,” said Iraqi Deputy Prime Minister Hussain al-Shahristani in Sydney, Australia, where he was attending a conference. 

Crude exports from the Taq Taq oilfield in the KRG to Turkey’s Mersin port started at a trickle in early January and have risen to just over 40,000 barrels per day (bpd).

They are expected to hit around 60,000 bpd by the end of June as trucks unload at the neighboring Dörtyol terminal in southern Turkey. In retaliation, Iraq’s State Oil Marketing Organization (SOMO) sent letters warning customers not to touch any oil that had not been marketed by SOMO and the ministry intends to sue producers, namely Anglo-Turkish firm Genel Energy.Iraq’s central government says the KRG is expected to provide 250,000 bpd towards Iraq’s 2013 oil export target of 2.9 million bpd.

Chevron and Russian firms on table

Meanwhile, a Turkish company would be partnering with the KRG and Exxon Mobil to carry out oil exploration in northern Iraq, Turkish PM Erdoğan stated before his latest U.S. visit last week. Turkish officials and the executives of Chevron have also been talking about oil and natural gas pipelines that are planned to be built from the KRG through Turkey, as reported by Turkish daily Hürriyet last week. 

According to a note by the London-based IHS energy analyst Sıddık Bakır, Turkish officials are in talks now with executives at Chevron and Russian companies (possibly including Gazprom Neft) to discuss the construction and financing of new oil and gas pipelines in the KRG. “At this stage however Turkey’s ambitions in the KRG represent a major setback for Baghdad – especially as the US seems to be less inclined to support the Iraqi position,” the report stated.