* Move likely to infuriate Iraqi government in Baghdad
* First 1 million barrel cargo being loaded at Ceyhan,
* Tanker scheduled to sail later on Thursday, buyer not
(Adds SOMO reaction, background)
By Orhan Coskun and Humeyra Pamuk
ANKARA/ISTANBUL, May 22 Iraqi Kurdistan started
loading oil from its new pipeline for shipment from a Turkish
port on Thursday, defying the Baghdad government, which claims
sole authority over Iraqi crude and declares any independently
sold oil as 'smuggled'.
The cargo of 1 million barrels of crude oil was being loaded
on a tanker in the Mediterranean port of Ceyhan, Turkish Energy
Minister Taner Yildiz told Reuters on Thursday.
"Loading will be completed today," Yildiz said, declining to
name the buyer.
The sale is likely to infuriate Baghdad, which has been at
loggerheads with the autonomous Kurdish region over the sharing
of oil revenues, and denounced Turkey's courtship of the Kurds,
warning that steps towards Kurdish economic independence could
threaten Iraq's sovereignty.
Baghdad has cut the region's share of the budget to punish
it for building the new pipeline, and oil sales can provide the
Kurdistan Regional Government (KRG) with desperately needed
Flows through the pipeline started last December, but Ankara
had pledged it would wait for Baghdad and Arbil to resolve their
differences before allowing independent oil exports.
After five months of talks and little progress, however,
tanks at Ceyhan are now full with 2.5 million barrels of Kurdish
oil, and Turkey decided there was no point in further
obstructing exports, sources familiar with the sale said.
In late 2013, Iraq's Oil Ministry instructed a U.S. law firm
to pursue legal action against any buyer of Kurdish oil.
Iraq's State Oil Marketing Organization (SOMO) issued a
statement late on Thursday calling the loading of oil from
Ceyhan "an illegitimate deed of the Turkish authorities".
It said that both the Oil Ministry and SOMO "reserve the
right to take all legal measures against any company or entity"
that loaded Iraqi crude from Ceyhan without Baghdad's approval.
Officials in Arbil could not immediately be reached for
CRUDE FLOW CONTINUES
An official at the GAC shipping agency in Turkey confirmed
that a tanker named United Leadership was loading piped Kurdish
oil. Reuters AIS Live ship tracking showed the tanker had
arrived in Ceyhan around May 20 and was berthed there.
Flows through the KRG oil pipeline have increased since
early March while Iraq's federal oil pipeline, from the northern
Kirkuk fields to Ceyhan, has been down, an industry source said.
That freed up Turkish capacity to handle the Kurdish flows.
"Because the Kirkuk line was not working, KRG was able to
pump around 100,000 barrels per day (bpd) at times, which filled
up the storage tanks quickly," the source said.
KRG's new oil pipeline connects to the existing Iraqi
federal pipeline on the Turkish border.
The industry source said the flow in the KRG pipeline
continued as the export cargo was being loaded in Ceyhan.
Another source said the payments for the exports were likely
to be deposited with Turkey's Halkbank.
Iraqi Kurdistan began selling its oil independently of the
federal government in 2012, transporting a small trickle of
condensate and then, in 2013, small quantities of crude through
Turkey by truck.
A Turkish company called Powertrans has acted as broker for
the Kurdish government, selling the oil via tenders to traders.
Last week, Reuters reported that Israeli and U.S. oil
refineries had imported small cargoes of crude oil from the
The sales may have immediate political consequences as
Iraq's incumbent prime minister, Nuri al-Maliki, looks for
partners to form the next government after preliminary results
from the April 30 election were announced last Monday.
(Additional reporting by Julia Payne in London and Ahmed
Rasheed in Baghdad, Reporting by Orhan Coskun and Humeyra Pamuk;
Editing by Jane Baird and Kevin Liffey)