Iraqi Kurdistan to push ahead with oil export plan

ARBIL, Iraq Sun May 20, 2012 6:53am EDT

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ARBIL, Iraq (Reuters) - Iraq's autonomous Kurdistan region said on Sunday it expects to start exporting its crude oil production along a new pipeline to the Turkish border by August 2013, defying Baghad in a long-running dispute over who should control the country's oil exports.

The Kurdistan region, which has its own government and armed forces, has already clashed with Iraq's central government and halted its oil exports in April after accusing Baghdad of not remitting payments due.

"In August 2013 we will be able to directly export crude from the Kurdish region's fields," Hawrami said at an oil conference in Kurdistan on Sunday. "We will be responsible for exporting oil. It will still be Iraqi oil."

Baghdad says only the central government's oil authorities have the right to control oil exports, and dismisses contracts signed with the Kurdistan Regional Government as illegal, while the KRG says it has the right to develop its own oil fields.

Hawrami said once direct exports begin Kurdistan would take the 17 percent of revenues the region is allowed from Iraq's national budget and pass the rest to the federal government.

The minister said the first stage of the pipeline would be completed by October this year to carry crude from the Taq Taq oilfield. The second phase would connect to the Kirkuk-Ceyhan pipeline with a capacity of 1 million barrels per day by August next year.

He said Kurdistan was also developing plans to build a separate pipeline that could connect to a refinery in Turkey's Ceyhan port by 2014.

The oil dispute between Baghdad and Kurdish capital Arbil is part of a broader political crisis in Iraq, where a fragile government among Shi'ite, Sunni and Kurdish blocs is struggling to overcome deep splits over power-sharing.

Last month Kurdistan halted crude exports because it said Baghdad was not fulfilling agreements to pay foreign oil companies working in the region, worsening the conflict between the ethnic Kurdish and mainly Iraqi Arab central government over regional autonomy, disputed territories and oil rights.

(Reporting by Ahmed Rasheed; Writing by Patrick Markey; Editing by Greg Mahlich)

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