* Taq Taq crude exports to reach about 60,000 bpd by end
* Kurdistan to start deliveries to second terminal in Turkey
* Crude in steady stream to Northern Europe
By Julia Payne and Peg Mackey
LONDON, May 22 Iraqi Kurdistan's crude oil sales
to world markets, deemed illegal by Baghdad, are set to rise by
nearly 50 percent next month as trucks start deliveries to a
second export terminal in Turkey, industry sources in the region
said on Wednesday.
Crude exports from the Taq Taq oilfield in the autonomous
northern region to Turkey's Mersin port started at a trickle in
early January and have risen to just over 40,000 barrels per day
They are expected to hit around 60,000 bpd by the end of
June as trucks unload at the neighbouring Dortyol terminal in
Oil lies at the heart of a feud between the central
government and Kurdistan. Baghdad says it alone has the right to
control exports and sign deals, while the Kurds say their right
to do so is enshrined in Iraq's federal constitution.
In retaliation, Iraq's State Oil Marketing Organisation
(SOMO) sent letters warning customers not to touch any oil that
had not been marketed by SOMO and the ministry intends to sue
producers, namely Anglo-Turkish firm Genel Energy.
Turkish intermediary Powertrans has found a steady stream of
customers in Northwest Europe for its crude and condensate
sales. Major oil firms with interests in southern Iraq have
opted not to participate in tenders.
Germany's Select Energy lifted the first two Taq Taq cargoes
in April. The grade is a light sour crude, a highly sought after
One was delivered to Klesch's Heide refinery in northern
Germany and the other discharged in Rotterdam.
Select is loading a third larger 80,000 tonne cargo.
Austria's OMV, already black-listed by Baghdad due
to upstream stakes in Kurdistan, also bought one cargo in May,
Iraq's central government says Kurdistan is expected to
provide 250,000 bpd towards Iraq's 2013 oil export target of 2.9
Adding condensate exports, the total amount of Kurdish oil
exports would rise next month to nearly 80,000 bpd, or about 40
percent of the region's total oil production.
Kurdish oil had been exported through a Baghdad-controlled
pipeline to Turkey before drying up last December due to a
payment dispute between Arbil and Baghdad.
Moving oil to world markets by pipeline is far cheaper and
logistically easier than via truck. Exports by truck are a
temporary solution until the autonomous northern region
completes its own pipeline to Turkey.
Exports via the new 300,000 bpd pipeline are unlikely to
start before the year's end, a source familiar with the matter
said, particularly as it is still not clear how it will join-up
with existing Turkish infrastructure.