UPDATE 1-Iraq minister sees deal soon with Kurds on oil exports

Wed Apr 9, 2014 6:18am EDT

Related Topics

* Baghdad, Iraqi Kurdistan at odds over oil exports

* Iraqi central government hopes to double oil flow to Turkey

* TANAP gas pipeline construction to begin in April 2015 (Adds quotes, details, background)

By Orhan Coskun

ANKARA, April 9 (Reuters) - Iraqi Oil Minister Abdul Kareem Luaibi said he expected a deal to be reached within days to resolve an oil export dispute between the central government in Baghdad and Iraqi Kurdistan.

The Kurds have sent more than 1 million barrels of oil through a new pipeline into storage tanks at Ceyhan in Turkey. But Baghdad wants to keep the trade under its control, and Ankara is awaiting Iraq's blessing before allowing exports to begin.

Talks between Baghdad and the Kurdistan government in Arbil have yet to produce a deal, but Luaibi said the Iraqi parliament had set up a high-level delegation several days ago to resolve the problem.

"The task of this delegation is to secure agreement between the two sides, and I believe they will secure this agreement," he said at an oil and gas conference in Ankara.

"The parliamentary council will hold talks on this subject within hours, and even if there is no agreement today, I expect an agreement within a couple of days," he said.

Autonomous since 1991, Kurdistan has often chafed against central authority but relies on Baghdad for a slice of the OPEC producer's $100 billion-plus budget.

For Turkey, Kurdish oil will help diversify its energy supplies away from Russia and Iran and reduce a ballooning $60 billion energy bill.

Meanwhile, the flow of oil from Iraq to Turkey on the Kirkuk-Ceyhan pipeline halted at the start of March. Luaibi said the interruption was due to militant attacks in several places and a technical problem at a facility in Turkey.

"We are trying to resolve these problems. I believe flow will resume within one week," he said.

Iraq wants to double the oil flow to Ceyhan to more than 1 million barrels per day (bpd) with the construction of a second line.

"We are building a pipeline in Iraq," Luaibi told Reuters on the sidelines of the conference. "I believe the daily oil flow will exceed 1 million barrels a day when that line is completed. I hope it happens this year."

He was set to discuss the pipeline and other issues with Turkish Energy Minister Taner Yildiz on Wednesday.

Separately, construction of the Trans-Anatolian natural gas pipeline project (TANAP), which will carry Azeri gas to Europe through Turkey, will start in April 2015, TANAP General Manager Saltuk Duzyol told Reuters at the conference.

TANAP aims to start carrying 16 billion cubic metres (bcm) of gas per year by 2018 or 2019 from Azerbaijan's Shah Deniz II field in the Caspian Sea, one of the world's largest gas fields. (Writing by Daren Butler; Editing by Nick Tattersall and Jane Baird)

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