Kur­dish oil ex­ports to in­crease to 300,000-400,000 bpd in 2015

The Kurdish Globe - - NEWS -

Oil ex­ports from north­ern Iraq are ex­pected to be be­tween 300,000 and 400,000 bar­rels per day in 2015, the In­ter­na­tional En­ergy Agency said, in­clud­ing crude pro­duced in the Kur­dis­tan Re­gion.

The es­ti­mate from the West's en­ergy watch­dog, cit­ing re­gional and Western in­dus­try sources, fol­lows a tem­po­rary agree­ment be­tween Bagh­dad and the Kur­dis­tan Re­gional Gov­ern­ment (KRG) this month over their long-run­ning oil sales dis­pute.

The IEA said the sources be­lieve the ca­pac­ity of the KRG's in­de­pen­dent pipe­line has been ex­panded, po­ten­tially ad­ding more crude to the global oil mar­ket that has al­ready fallen 45 per cent since June due to ex­cess sup­plies.

“Re­gional and Western in­dus­try sources reckon that ex­ports from north­ern Iraq – in­clud­ing vol­umes from the KRG and Kirkuk – could rise to an av­er­age of 300,000 bpd to 400,000 in 2015 if the 2 De­cem­ber Bagh­dad/KRG agree­ment is up­held,” the Paris-based IEA said in its monthly mar­ket re­port.

“The KRG pipe­line has been re-pur­posed and can han­dle up to 550,000 bpd, they say.”

The IEA low­ered its fore­cast for oil de­mand growth and said prices are likely to come un­der more pres­sure. Brent fell to a five-year low of $62.75 a bar­rel af­ter the re­port.

Af­ter years of bit­ter feud, Er­bil will pro­vide 250,000 bpd of Kur­dish-pro­duced crude to the cen­tral gov­ern­ment's state mar­keter Somo un­der this month's agree­ment, and al­low 300,000 bpd from the north­ern Kirkuk fields to flow in the Kurds’ pipe­line to the Turk­ish Mediter­ranean port of Cey­han.

Bagh­dad's own pipe­line to Cey­han has been off­line since early 2014 af­ter be­ing at­tacked by mil­i­tants, largely cut­ting off Kirkuk sup­plies. The line runs through ter­ri­tory now con­trolled by Is­lamic State.

KRG forces took con­trol of Kirkuk and the nearby field of Bai Has­san in June af­ter the Iraqi army melted away in the face of Is­lamic State's ad­vance. The KRG had previously con­trolled only one of the Kirkuk field's three for­ma­tions, Khar­mala, with Bagh­dad's North Oil Co run­ning the Avana and Baba domes.

"In Novem­ber, flows of 120,000 bpd from Avana and Bai Has­san al­lowed the KRG to boost pipe­line flows to­wards 300,000 bpd,” the IEA said.

"By early De­cem­ber, the KRG ex­ported up to 350,000 bpd to the Turk­ish Mediter­ranean, ac­cord­ing to re­gional sources,” the IEA added, but said it was un­clear how much of this crude was be­ing stored rather than sold.

Un­der the ex­port deal, Bagh­dad will re­store the KRG's 17 per cent cut of the fed­eral bud­get and pro­vide fund­ing for the Kur­dish Pesh­merga forces. The KRG has long said the Iraqi con­sti­tu­tion al­lows it to ex­port oil in­de­pen­dently of Bagh­dad which had de­cried such sales as il­le­gal smug­gling.

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