Iraqi Kurds boost oil sales in push for financial independence

DUBAI (Bloomberg) -- Iraq’s Kurdish region ramped up crude exports by 27% in September as the semi-autonomous enclave seeks greater financial independence amid a budget dispute with the federal government in Baghdad.

The Kurdistan Regional Government exported 18.6 MMbbl, or an average of 600,463 bpd, through the pipeline network to the Turkish port of Ceyhan, according to a statement on the KRG’s Ministry of Natural Resources website. In August, the KRG exported 14.7 MMbbl of crude oil to the Mediterranean port.

Fields operated by the KRG contributed 448,340 bpd to the region’s exports, while deposits managed by the central government’s North Oil Co. shipped 152,122 bpd, according to the statement. Kurdish oil exports increased in September even as shipments halted for two days because of sabotage and theft, it said.

“In September, the KRG continued to increase its direct oil sales in Ceyhan to compensate the region for the budget shortfalls from the federal government in Baghdad,” the KRG said in its statement.

Iraq’s minority Kurds, who historically have resisted control by governments in Baghdad, are independently developing oil reserves they say may total 45 Bbbl -- equivalent to almost a third of Iraq’s total deposits, according to BP Plc data. The KRG and the central government have traded accusations of breaches to a Dec. 2 agreement that provided for the Kurds to export their oil through the state oil company in return for cash from authorities in Baghdad.

Less Cash

The central government denies that the Kurds supplied an agreed-upon 550 Mbpd and sent the KRG less cash as a result. The failure of the two sides to settle their differences over how to share revenue from oil sales exacerbates uncertainty about crude supplies from northern Iraq, one year since Kurdish troops occupied the region of Kirkuk and nearby oil fields to defend them against Islamic State militants.

“The KRG will continue to work with its counterparts in the federal government to reach a resolution on all the outstanding issues of oil and gas and in this regard it sees an opportunity for solid progress in the forthcoming discussions over the 2016 federal budget,” the KRG said in the statement.

The KRG plans to boost oil exports to 900 Mbpd by the end of 2015, Dilshad Shaaban, deputy chairman of the Kurdish parliament’s natural resources committee, told Turkey’s state-run Anadolu Agency in a Sept. 22 interview. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, shipped 3.052 MMbpd in September, according to data compiled by Bloomberg.