Genel Energy Starts Kurdish Oil Export, Bypasses State Links

Genel Energy Plc has started shipping crude from Iraq’s Kurdish region into Turkey, two weeks after exports from the semi-autonomous area were halted.

The Kurdistan Regional Government has authorized exports from Genel’s Taq Taq oil field, Andrew Benbow, a company spokesman, said today in an e-mail in response to a question from Bloomberg. Ali Hussein Balou, an adviser to the KRG natural resources minister, declined to comment on the matter.

The KRG, feuding with the Iraqi central government over disputed land and energy revenue, stopped transporting crude via the central government-run pipeline network on Dec. 22. The federal government owes 350 billion dinars ($300 million) to companies working in the Kurdish region, Deputy Finance Minister Fadhel Nabi in the federal government said on Dec. 30.

The Kurdistan Regional Government won’t resume exports through the central government pipeline network until the federal authorities pay dues owed to international companies working in the Kurdish area, Balou said.

International companies such has Exxon Mobil Corp. and Total SA have been caught in the dispute between the Kurdish authorities and the central government, which doesn’t recognize contracts signed by the KRG without its permission. The tensions have led to previous halts in exports from the Kurdish region and payment delays to companies operating in the area.

Selling Locally

Gulf Keystone Petroleum Ltd., which has production in the semi-autonomous area, isn’t exporting crude and sells only in the domestic market, said Henry Lerwill, a company spokesman in London. DNO International ASA also sells into the local market, spokesman Tom Bratlie said by phone, declining to comment on whether the company had plans to start moving oil by truck through Turkey in the future.

Kurdish authorities plan to complete oil and gas pipelines running direct to Turkey in the next two years, Natural Resources Minister Ashti Hawrami said Sept. 24. The Kurdish region plans to raise crude output to 250,000 barrels a day this year and 1 million barrels a day in 2015, KRG Prime Minister Nechirvan Idris Barzani said Dec. 3.

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