Oil flows resume from Iraq's Kirkuk fields after Kurdish forces storm facility

BAGHDAD (Reuters) - Crude flows from Iraq’s northern Kirkuk fields resumed on Thursday after being halted for several hours when Kurdish forces stormed a facility in protest at the Iraqi government’s oil policy, several sources with knowledge of the matter said.

Kurdish forces stormed the facility early on Thursday, saying they were searching for explosives planted by Islamic State militants whom Iraqi forces are fighting with the backing of a U.S.-led coalition.

But a Kurdish official later said the facility had been seized to put pressure on Baghdad to build an oil refinery in Kirkuk, and that Kurdish forces would shut down oil flows again unless their demands were met within a week.

“What we did today was a warning bell to the government,” said Kurdish official Aso Mamand. “It’s not fair for Kirkuk’s oil to be sent to other provinces whilst Kirkuk is suffering a crisis.”

Oil officials and security sources in Kirkuk said the Kurdish forces had not withdrawn from the facility, but had allowed pumping to resume via a pipeline to the Turkish port of Ceyhan.

Kurdish peshmerga forces took full control of Kirkuk city and the surrounding area in 2014 when Islamic State militants overran around one third of Iraq and the army’s northern divisions disintegrated.

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But Iraq’s state-run North Oil Company (NOC) now operate the oil fields in the region, which were pumping around 120,000 barrels per day (bpd) into the pipeline before the shutdown, the NOC executive said.

The forces that seized the facility, located around 15 km (10 miles) west of Kirkuk, are loyal to the Patriotic Union of Kurdistan (PUK) party, which is dominant in the area.

Pumping was suspended for several months last year because of a conflict between Baghdad and Kurdish regional authorities on oil revenue sharing.

Before last year’s interruption, Kirkuk flows were independently handled by Kurdish authorities.

Reporting by Ahmed Rasheed and Isabel Coles; Editing by Jane Merriman and Mark Potter