September 11, 2011 / 4:56 PM / 8 years ago

UPDATE 5-Kurdish oil exports expected to restart soon

* KRG says technical issues slowed exports recently

* Blames “malpractice” by government oil co. for halt

* Iraq, Kurds have long-running oil dispute (Updates with KRG statement, details)

By Rania El Gamal and Ahmed Rasheed

AMMAN/BAGHDAD, Sept 11 (Reuters) - Oil exports on the main pipeline from Iraq’s semi-autonomous Kurdish region were halted due to technical problems and “malpractice” and not because of a policy decision, the region’s government said on Sunday.

The Kurdistan Regional Government said Iraq’s North Oil Company had “serious technical difficulties” with its main export pipeline, which carries about 100,000 barrels of crude per day, and labelled “false” reports that exports had been deliberately suspended.

The KRG issued a critical statement late on Sunday following a tumultuous day in which Iraq’s oil minister, Abdul-Kareem Luaibi, had announced at a meeting with oil companies in Amman, Jordan, that Kurdish exports had been halted but the region had given no reason for the shutdown.

He said the move would result in “big losses” for the national economy.

Prime Minister Nuri al-Maliki’s adviser on Kurdish affairs said the stoppage was a reaction to central government approval of a draft oil and gas law without consulting Kurdish leaders.

Iraq’s government in Baghdad and the KRG in Arbil have a long-running feud over oil and land. An export halt from the Kurdish region in 2009 lasted more than a year.

But the KRG blamed technical problems for a disruption of exports in recent days and “serious operating malpractice” at Iraq’s North Oil Company export system, which “resulted in the automatic shutdown of the main oil export of the region, which handles around 100,000 barrels of oil per day.”

“All false assumptions and accusations of export suspension should be totally discarded,” the KRG said in a statement.

“The KRG remains committed to its interim agreement with the federal government of Iraq for exports of oil from Kurdistan’s fields until a permanent solution is reached based on the Constitution.”

Late on Sunday Luaibi said he had talked to Kurdish Prime Minister Barham Salih and Natural Resources Minister Ashti Hawrami and was told exports would resume soon.


Earlier, Luaibi had said the export halt would result in “big losses for the Iraqi economy, which will be reflected on its revenues, on the people in the region specifically and the Iraqi people in general.”

Adel Barwari, Maliki’s adviser on Kurdish affairs, said the Kurdish government had demanded the withdrawal of the draft oil and gas law approved recently by the Iraqi Cabinet and the export halt was meant to put pressure on Baghdad.

“Kurdish authorities are upset by the Cabinet decision to pass such a vital law without discussing it with its major partner in government,” Barwari told Reuters. “Kurds have the feeling they were intentionally ignored.”

Luaibi said the Kurdish government’s commitment to deliver oil for export had nothing to do with the new hydrocarbons law and should not be linked.

The Kurdish region gets 17 percent of the national budget.

“The first loser is going to be the Kurdish people as they will lose 17 percent of the value of their stopped production,” Luaibi told reporters in Amman.

Kurdish exports had dropped sharply in the last two weeks, to about 50,000 bpd from 160,000 bpd. [ID:nL5E7KA0G8]

In its statement, the KRG said pressure in the NOC’s export system was doubled recently. “This was done without any prior notice or warning and has caused a dangerous level of back pressure on the KRG export system,” the KRG said.

Iraqi Kurdistan stopped exports in 2009 due to disagreements with Baghdad over contracts the KRG signed with foreign companies to develop its oilfields. The central government deems the contracts illegal.

The resumption of exports in February provided a big boost to Iraq’s total exports.

The OPEC producer exported 2.189 million bpd in August, including 461,000 bpd from northern fields. [ID:nL5E7K122F]

Iraq’s current oil production is 2.75 million bpd, the highest level in 20 years.

Kurdish President Masoud Barzani has called his officials to a meeting in Arbil on Tuesday to discuss the region’s disputes with central government, Barwari said. (Additional reporting by Shamal Aqrawi in Arbil; Writing by Jim Loney; Editing by Dan Lalor and Maureen Bavdek)

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