Iraq to Allow Kurds to Resume Oil Exports

[kedwa420]

Originally posted by Shellbell


http://www.businessweek.com/news/2010-0 ... tely-.html


By Kadhim Ajrash

Feb. 9 (Bloomberg) -- Iraq, holder of the world’s third- largest crude reserves, will resume oil exports from the northern Kurdish region “soon” after the government agreed to the local authority’s proposal on a payment method.

The government instructed the State Oil Marketing Co. to resume exports from the Kurdish region “immediately,” Oil Minister Hussain al-Shahristani said today in Baghdad. Kurdish Regional Government Minister for Natural Resources Ashti Hawrami said by telephone that it’s “awaiting an official response.”

Iraq accepted a Kurdish proposal on payments to producers working in the semi-autonomous region, al-Shahristani said without providing details. The KRG last month proposed that the government pay Norway’s DNO International ASA and other producers in northern Iraq directly or for the revenue to pass through the Kurdish authorities.

“I hope we can restart exports soon,” Hawrami said. “We all can use some good news and we’re ready to contribute to the Iraqi economy.”

DNO shares surged as much as 16 percent in Oslo trading after the announcement. DNO spokesman Ketil Joergensen declined to comment on today’s announcement, saying that the company would issue a statement once it hears from the KRG. “We don’t have a direct relationship with Baghdad,” he said.

The Kurdish region has capacity to export about 100,000 barrels of oil a day and may start pipeline expansion work to more than double that this year, Hawrami said. Production capacity is at 250,000 barrels a day from two producing areas.

Companies like DNO and Genel Enerji AS halted oil exports from the semi-autonomous Kurdish region in October, about four months after they started, because there was no mechanism in place for payments to producers.

Exports from the Kurdish region started flowing through federal government-run pipelines last year and revenue from the sales went to state coffers. Shipments out of Kurdistan reached a peak of about 80,000 to 90,000 barrels a day before they were shut down, the KRG’s Hawrami said.

[Rainy]

Thanks ShellBell

[IcemanSC]

Very good post.

Thanks and Blessings