Iraq’s Kurdistan Stops Oil Exports, Minister al-Luaibi Says

The semi-autonomous Kurdish region of northern Iraq halted all exports of crude today, Iraqi Oil Minister Abdul Kareem al-Luaibi said.

The Kurdistan Regional Government had been exporting 100,000 barrels to 150,000 barrels a day before the interruption, al-Luaibi told reporters in Amman, Jordan.

“Today I was surprised that production had gone down,” he said. “Yesterday it was 37,000 barrels a day, and today there is nothing.”

Iraq, the third-biggest producer in OPEC after Saudi Arabia and Iran, is struggling to boost oil exports, its main source of revenue for rebuilding an economy crippled by years of conflict and sanctions. It exported a total of 2.19 million barrels of crude a day in August, Falah al-Amri, chairman of the State Oil Marketing Organization, said by telephone on Sept. 3.

An official at Iraq’s North Oil Co. confirmed the suspension of crude exports from the Kurdish region to the Mediterranean port of Ceyhan, Turkey. The official, declining to be identified in line with company policy, said he had no information about the reason for the halt.

Running Dispute

Kurdish authorities and the central government in Baghdad have been mired in a dispute over revenue from the sale of oil produced at Kurdish fields. Their wrangling has been a chief obstacle to the passage of Iraq’s new energy law, under study for about five years. Qassim Mohammed Qassim, an Iraqi lawmaker, said on Sept. 7 that parliament had returned a draft energy law to the governing cabinet because it was incomplete and had numerous “shortcomings.”

Al-Luaibi, the oil minister, denied that the halt in Kurdish exports arose from differences over Iraq’s nascent energy law. “It is not linked to a law or anything,” he said, adding that “the first loser will be the Kurdish people.”

Ashti Hawrami, the Kurdish government’s natural resources minister, said on July 7 that his region was sending 180,000 barrels a day through Iraq’s pipeline to Turkey. Kurds planned to increase exports to Ceyhan to 200,000 barrels a day by the end of this year, he said in an e-mailed statement.

Kurdish authorities received a boost last week when Vallares Plc, the investment vehicle led by BP Plc’s former Chief Executive Officer Tony Hayward, announced a merger with Turkey’s Genel Energy International Ltd. in a $2.1 billion deal to gain rights to oil fields in Iraq’s Kurdish region.

Hayward’s Imprimatur

“The Kurdistan region of Iraq is undoubtedly one of the last great oil and gas frontiers,” Hayward said in a statement on Sept. 7.

Hess Corp., the New York-based oil company, was barred from competing in an auction of exploration licenses that Iraq plans for January, after having signed a production-sharing agreement with Kurdish authorities, Iraqi Kurdish lawmaker Bayazid Hasan said Sept. 6.

Iraq, home to the world’s fifth-biggest oil reserves, pumped 2.68 million barrels of crude a day in August, according to data compiled by Bloomberg. It is the only member of the Organization of Petroleum Exporting Countries not bound by an output quota.

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