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Baghdad’s threats fail to restrain demand for Kurdish oil

29 Jan 2013
The oil companies from Europe are buying an increasing volume of oil independently exported by Kurdistan, in defiance of Baghdad’s threats to punish those that contract in exports it says are illegal. Baghdad made a promise to prosecute purchaser of Kurdish condensate, a light grade of oil that has been exported without its permission since October. The regular crude exports began around the beginning of the year, and Baghdad has already made a declaration on its plans to sue Genel Energy, the first firm to export the oil directly from the region on trucks via Turkey. The international oil companies were claiming strong enough to absorb an increasing amount of the independently exported oil, and dealers said tenders have been drawing interest from a widening range of companies. The Kurdish condensate purchasers so far have faced few consequences, with one prominent exception – trading house Trafigura, which was barred from Iraq in the month December. This month, the exports of the region are predicted to hit around 60,000 tonnes, equivalent to about 15,000 barrels per day. The flow of oil, includes condensate, from the Kurdish region could steadily rise to near about 40,000 barrels per day (bpd), Turkey’s energy minister has said, the equivalent of around 200 trucks a day. The condensate exports already account for near about the entire output of 17,000 bpd from Kurdistan’s Khor Mor field, and as capacity grows there are plans to start exporting oil from the other fields. The flow has made a wide range of interest from Swiss-based trading companies such as Trafigura and Vitol, and new firms such as U.S. chemical company Dow have joined the rank of purchasers, transporting sources said. Dow did not want to comment anything on this. The latest delivery of Kurdish condensate loaded abroad the Lucky Lady at the Toros terminal nearby Ceyhan in Turkey on 15th January and was bought by a small trading house called Crownhill Investment Limited, the shipping sources stated. The independent firm is sometimes used as a middleman by big trading firms in oil contracts that may be politically sensitive or odd. Ship tracking data expressed that the cargo was headed for Terneuzen in the Netherlands, due for arrival on 31st January. The shipping sources said that a second Kurdish condensate cargo was scheduled for loading abroad the Iver Progress in the last week of the month and was bought by Dow. The Central Government of Iraq in Baghdad has repeatedly insisted that it considers independent exports from the Kurdish Regional Government (KRG) as smuggling. State-owned marketer Somo is the only body legally entitled to export Iraqi oil. Baghdad has also made promise for banning any firms that sign agreements with the KRG. On Sunday (27th January, 2013), the oil minister of Iraq said to Exxon Mobil, the first chief oil company to sign a contract with the KRG, had been given an ultimatum for choosing between its oilfields in Kurdish blocks in the north or in the southern Iraq. Source: [Reuters]
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