Kurdistan defies Baghdad in Crude Oil Sale

posted by Joseph Keefe
Thursday, May 22, 2014

Move likely to infuriate Iraqi government in Baghdad; first 1 million barrel cargo being loaded at Ceyhan, Turkey. Tanker scheduled to sail later on Thursday, buyer not identified.

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 independent income.

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 comment.


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 region.

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.

By Orhan Coskun and Humeyra Pamuk


Maritime Reporter September 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


HMAS Melbourne Intercepts 427kg Heroin

HMAS Melbourne’s crew has seized 427 kilograms of heroin hidden in a fishing dhow carrying the illegal drugs across the Indian Ocean. The intercept occurred

Xerox, MHI Ink ITS Project Deal

Today, at the ITS World Congress and Exhibition, Xerox and Mitsubishi Heavy Industries (MHI), both leaders in transportation solutions, signed a Memorandum of Understanding to explore,

ICTSI Colombia Gears for 2016 Launch

Sociedad Puerto Industrial de Aguadulce S.A. (SPIA), a unit of International Container Terminal Services, Inc. (ICTSI) in Colombia, recently received four super

Tanker Trends

GTT Inks Framework Partnership Deal with CERN

GTT, a designer of membrane containment systems for the maritime transportation and storage of liquefied natural gas (LNG), has signed a Framework Partnership Agreement

d'Amico Launches Two Tankers in Vietnam

d'Amico International Shipping S.A. has launched two eco-ships at the shipyards of Hyundai Vinashin Shipyard Co. Ltd – Vietnam, bringing the fleet to more than 50 units.

New Head for Odfjell Tankers

Odfjell announced it has appointed Senior Vice President Harald Fotland to new Head of Odfjell Tankers. Fotland comes from the position as SVP/Chief of Staff


Pitbull Named Godfather of Norwegian’s New Cruise Ship

Norwegian Cruise Line announced today that musician Pitbull will serve as godfather for its newest ship, Norwegian Escape, slated to be christened next month in Miami.

Overturned Boat Kills Thousands of Cattle

Thousands of cattle owned by beef producer Minerva SA are thought to have died when a boat leaving a port in northern Brazil overturned, the company and Williams Shipping Agents said on Tuesday.

Refugees Give Greek Tour Operators an Extended Season

Placards in hand, travel agent Iakovos Bouchoris and his team scout for customers at Greece's busy Piraeus port, near Athens, where some 5,000 people arrived on


Dry Bulk Shipping Turmoil Set to Extend into 2016

Dry bulk shipping faces more earnings pain as a slowdown in commodities demand and a glut of ships are expected to pile on the pressure well into 2016, ship industry players said on Wednesday.

India Extends Tax Benefits on Bunker Fuel

India has extended the benefit of nil custom and production tax on bunker fuels to domestic coastal movement of containers, in a move to decongest its roads and reduce carbon emissions,

Ivory Coast Starts Construction of Abidjan Port Upgrades

Ivory Coast began construction on Tuesday of a four-year, 560 billion CFA franc ($962 million) project to build a second container terminal and widen the canal


India Extends Tax Benefits on Bunker Fuel

India has extended the benefit of nil custom and production tax on bunker fuels to domestic coastal movement of containers, in a move to decongest its roads and reduce carbon emissions,

Shell Starts Bonga Phase 3 in Nigeria

Shell Nigeria Exploration and Production Company Ltd (SNEPCo) announced the start-up of production from the Bonga Phase 3 project.   Bonga Phase 3 is an expansion of the Bonga Main development,

Workers Evacuated After Gas Leak at Mexico Platform

Mexico's state-owned oil company Pemex said on Tuesday that it was working to control a gas leak at the Sihil A platform in the Gulf of Mexico.   Eighty-five workers have been evacuated,

Maritime Security

Behave in the South China Sea, US Admiral Warns China

US Pacific Fleet Commander Admiral Scott Swift  has fired a broadside at China and other regional nations who are flouting international law in the South China Sea.

US Navy Joins Piracy Battle

The United States and six other nations kicked off a five-day naval exercise Monday aimed at combating piracy and other crimes in Southeast Asia’s heavily trafficked waters,

Northern Fleet to Conduct Anti-terrorist Exercises

The sailors of the Northern Fleet will conduct anti-terrorism exercises at Novaya Zemlya. During the exercise, the coast will be a landing. The landing will

Maritime Careers / Shipboard Positions Naval Architecture Offshore Oil Pipelines Pod Propulsion Salvage Ship Electronics Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1661 sec (6 req/sec)