The first cargo of Iraqi Kurdistan's crude oil has REUTERS
Friday 5 April 2013
Last Update 5 April 2013 10:22 pm
LONDON: The first cargo of Iraqi Kurdistan's crude oil has been sold on the international market, industry sources said, as the autonomous northern region ramps up trade the central government views as illegal.
The crude pumped from Genel Energy's Taq Taq oil field was trucked over Iraq's northern border with Turkey and sold via tender for loading in April.
One trader said the cargo sold was 30,000 tons, which at Friday's market prices was worth around $ 22 million.
"I said we may have interest for this 30,000-ton cargo and they (Powertrans) said we already sold it," said the prospective buyer.
S.E.T. Select Energy GmbH, an energy firm based in Hamburg, Germany, won the tender issued by intermediary Powertrans, according to two industry sources.
Select Energy did not immediately respond to email and telephone requests for comment.
The direct trade of crude and condensate by truck through Turkey has been rising steadily and now stands at close to 50,000 barrels per day (bpd). Exports of Taq Taq crude by truck are now more than 25,000 bpd, industry sources said.
A senior Iraqi official said last month the growing trade between the Kurdistan Regional Government (KRG) and Turkey threatens to split Iraq in two.
Oil lies at the heart of a long-running feud between the central government and Kurdistan. Baghdad says it alone has the authority to control exports and sign contracts, while the Kurds say their right to do so is enshrined in Iraq's federal constitution.
Iraqi Oil Minister Abdul Kareem Luaibi said in January the Ministry of Oil intended to sue Anglo-Turkish Genel Energy and other companies for the export of crude from Iraqi Kurdistan.
Genel Energy expects to export oil by pipeline from its fields in Iraqi Kurdistan by 2014, regardless of a political impasse between Baghdad and the semi-autonomous region.
A number of major oil firms with interests in the south have opted not to participate in tenders offering Kurdish crude and condensate to avoid angering Baghdad.
That said, buyers of Kurdish condensate have so far faced few repercussions, with one notable exception — trading house Trafigura, which was banned from Iraq in December.
In any event, demand by smaller players and oil majors that do not have interests in southern Iraq is sufficient to absorb the growing volume on offer.