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Iraq: Oil exports from Kurdish region to resume

Iraq: Oil exports from Kurdish region to resume

December 6th, 2010 in News

BAGHDAD (AP) - Iraqi crude oil exports will resume early next year from the self-ruled Kurdish region after a more than yearlong break over payments, the nation's oil minister said Monday.

Hussain al-Shahristani told reporters that the Kurdish government has committed to exporting 150,000 barrels daily by next year, but did not provide an exact date for when they would begin.

Exports from the north had been halted a few months after they resumed in June 2009 amid a disagreement between the Baghdad government and Kurdish officials over payments. The Kurds have sought greater control over oil in their crude-rich region while Baghdad has argued that the oil is a national resource, under the central government's control.

Al-Shahristani said a dispute over how private companies accounted for equipment costs and other expenses for reimbursement has been settled, clearing the way for the exports to resume.

"We will pay the companies the costs and its ownership will be turned to Iraq." al-Shahristani said. "But until now, we did not receive any receipts from them."

Iraq sits on the world's fourth-largest oil reserves, nearly half of which are concentrated in the northern Kurdish region.

The Kurds have signed more than two dozen oil deals with foreign companies since the 2003 U.S.-led invasion - deals brokered without the approval of the central government. The contracts outraged officials in Baghdad, who deemed them illegal. The dispute threatened to cast a pall over efforts to develop the oil sector nationwide. Oil sales account for roughly 95 percent of Iraq's foreign revenues.

In a key difference, the deals signed with the Kurds involve profit-sharing while those signed between the companies and the Baghdad government are service contracts in which the firms received a fixed price per barrel they produce.

Iraq plans to export 2.25 million barrels a day next year, up from current exports of about 1.9 million barrels daily.