Iraq ready to resume northern oil exports says minister
(Reuters) - Iraq wants to restart oil exports on Saturday through a pipeline that runs from its northern Kurdistan region to the Turkish port of Ceyhan, but is waiting for the go-ahead from Turkey, Iraq's oil minister said on Friday.
Turkey is holding presidential elections on Sunday, a move some observers say could delay the resumption of flows. Turkey's energy ministry did not respond to a request for comment on the possible resumption of flows.
Iraq is ready to pump up to 485,000 barrels per day (bpd), including 400,000 from the semi-autonomous Kurdistan Region and 75,000 to 85,000 from Iraq's Kirkuk oilfields, Oil Minister Hayan Abdel-Ghani told Reuters during an interview on Friday.
On March 25, Turkey halted 450,000 bpd of northern exports through the Iraq-Turkey pipeline after an International Chamber of Commerce (ICC) arbitration ruling.
The ICC ordered Ankara to pay Baghdad damages of $1.5 B for unauthorized exports by the Kurdistan Regional Government (KRG) between 2014 and 2018.
Abdel-Ghani said the payment of damages was not up for discussion with Turkey, but sources previously told Reuters that Turkey has sought negotiations relating to the damages and wants a permanent resolution to other open arbitration issues before resuming flows.
Abdel-Ghani said that the stoppage of oil flows in March coincided with a request that Turkey check the pipeline and storage tanks for any damages resulting from the Feb. 6 earthquake.
He said Iraq was waiting to hear from Turkey on whether checks and maintenance had been completed.
Iraq's request to resume flows on Saturday, made to Turkish state energy company BOTAS, came after traders buying crude from the Kurdistan region signed new contracts with Iraq's state-owned crude marketer SOMO.
The KRG has agreed for SOMO to market its crude oil and for prices to be set by the same formula SOMO uses, Abdel-Ghani said. Its export revenue will be deposited in an existing KRG bank account with Citi in the United Arab Emirates, three sources familiar with the matter previously said, and Baghdad will have auditing access.
SOMO also had to iron out contracts with buyers of KRG crude. The newly signed contracts are for a period of up to three months but do not address the vast amount of debt that the KRG owes trading firms, one of the three sources said.
Basim Mohammed, Iraqi deputy oil minister for upstream affairs, told Reuters the issue of KRG debts "will be discussed with the region (KRG) through the ministries of oil and finance."
"The Iraqi government is serious about reaching an agreement that is satisfactory for both parties," he said.
Producers in the region have called for the KRG to prioritize debt repayment, making transparency and regularity of payments conditions for new investments and maximum export flows once the pipeline reopens, an industry source previously said.
Abdel-Ghani said Iraq was working to address issues faced by international oil companies leading to delays in production and extra costs, such as long wait times for the issuance of staff entry permits and the release of materials from customs.
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