(Releads on pipeline link, adds background, quotes)
By Julia Payne and Lin Noueihed
LONDON, June 17 Iraqi Kurdistan has built a link
connecting Kirkuk to its newly-built pipeline to Turkey, its
minister of natural resources said, potentially cementing
Kurdish control over the northern oil hub and reducing its
reliance on Baghdad.
The link could allow the Kurds to start exports of Kirkuk
crude oil through their own network, giving them a major source
of independent revenue and boosting any ambitions of sovereign
statehood as Iraq falls into increasing disarray.
The new link connects Kirkuk's Avana dome to the Khurmala
dome out of which the Kurdish pipeline runs.
"That blue line was finished," Ashti Hawrami, the Kurdistan
Regional Government (KRG) minister for natural resources, told a
conference in London, pointing to a map of the pipelines.
Baghdad's military retreat from the north under a lightning
assault led by the Islamic State of Iraq and the Levant (ISIL)
last week allowed the KRG's Peshmerga forces to seize control of
long-disputed Kirkuk and its oil reserves - the potential
economic lynchpin of a sovereign Kurdish entity.
But the main 600,000 bpd Kirkuk pipeline, which accounted
for the bulk of Iraq's northern crude oil exports, has been
offline since March following insurgent attacks.
Attempts to repair it have been thwarted by Islamic
militants in the region, who have targeted engineers trying to
fix sections of the line that pass through territory outside KRG
Adnan al-Janabi, a senior Sunni politician and head of
Iraq's oil and gas committee, said that Kirkuk's production
would likely be out for the time being along with some fields in
the Salahuddin area but that oil production inside KRG areas
would continue uninterrupted.
Janabi, a critic of the Baghdad government, told the
conference that the Kurds had effectively realised their "dream
of a greater Kurdistan" and the Iraqi army lacked the capability
to take the oil city back easily.
"Kurdistan of Iraq is already on its national desired border
and I don't think it will be easy to push back," he said.
"It includes parts of Kirkuk, Diala, Salahuddin... They are
already there, already running the place and I don't think
anyone will challenge them."
PUSH AHEAD WITH EXPORTS
With Baghdad busy fighting ISIL, the Kurds are pushing ahead
with oil exports that could help bolster their autonomy.
Hawrami said the Kurds expected to load two more tankers of
crude from their newly built pipeline this week at the Turkish
port of Ceyhan.
The KRG began independent exports in May from its pipeline
to Turkey, which by-passes Baghdad's system. So far, two tankers
have loaded that oil.
For years, the KRG and Baghdad have been locked in a
struggle over how to divide the country's oil revenue and
budget. Baghdad opposes independent Kurdish oil exports and says
all marketing must go through the state entity SOMO.
The divisions have significantly eroded trust and Hawrami
said that the central government had withheld budget payments to
the region so far this year and before that was giving only
around 10 percent instead of an agreed 17 percent.
Oil exports will increase to 200,000-250,000 barrels per day
in July, and then to 400,000 bpd by the year-end, Hawrami said,
allowing the KRG to catch up with the entitlement that Baghdad
Speaking at the same conference, Thamir Ghadban, an oil
official and advisor to the Iraqi prime minister, declined to
get into the numbers but said the Kurds could not pick and
choose from the country's constitution and should work through
the central government.
Baghdad's warnings have not deterred the Kurds so far.
"They pushed us to do this," Hawrami said.
"We're going to create facts on the ground... Don't ask me
to surrender my rights into your hands."
(Writing by Lin Noueihed, editing by David Evans)