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Kurdistan Oil & Gas Development

A collection of threads on topics that get updated regularly :
Peshmerga, Kurdistan Universities, Consulates in Kurdistan, Construction in (Hewler, Slemani, Dohuk, Kerkuk).Top Kurdish Holidays, Top Kurdish News Sites, Top Kurdish Terms. ...

Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Fri Jun 20, 2014 7:08 pm

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Should the West save Iraq?

Why Does Obama Hesitate?

Obama hesitated for some while before deciding not to bomb Syrian president Bashr el-Assad out of power. To be sure, Russia helped that decision in a big way. If el-Assad had been chased from power and given a show trial like Saddam Hussein before being killed, or not even given a show trial like Muammar Gaddafi before being killed, fundamentalist Islamic forces would have held sway in Syria.

In Libya, the bombing party was fast - and the fundamentalists took over. Slowly but surely. Libya now produces almost no oil at all, some weeks, and more at other times. Its last prime minister fled the country in March. Libya will likely become three states - Fezzan, Tripolitana, and Cyrenaica but squabbling over oil revenues will ensure constant low-level turf war fighting. With the Benghazi killing of US ambassador Stevens in 2012, the basic ungovernability of Libya hit the headlines.

Iraq probably seemed different, at first, to Obama aides arguing the president must act with military force to prevent 'America's man', prime minister Nouri el-Maliki, from being deposed or killed by the Riyadh-friendly, humanity-unfriendly djihadist hordes swarming like ravenous insects in Iraq. By June 19 however, US glove puppet media like the 'Wall Street Journal' carried articles shouting that el-Maliki must go and for the moment at least, US fighter jets will not be bombing and strafing in Iraq.

Under new and different management of Iraq - notably by Kurdistan and Iran - oil production can likely be maintained. Ergo, no need to bomb!

Conversely if anti-regime hordes were at the gates of Riyadh and the already fundamentalist Sunni, anti-democratic Wahabite Kingdom was menaced US fighter jets, A 10 Tank Busters and cruise missiles would have already been in action for days - and to hell with the collateral victims and the political blowback! In fact this political blowback is a major reason for the existence of firstly Al Qaeda in Iraq, then ISIS.

Following too many oil-driven western military attacks, occupation and oppression - dating from the 1920s - Shia and Sunni militants may hate each other but have one shared aim in life. Kill an American or an European. Drive them out. Western oil-driven interference in the region has added new enemies for reprisal attacks to the age-old vendetta system of Shia-Sunni conflict. This sectarian, clan, tribal and family fighting system exited long before oil, and will likely exist long after oil.

Iraq No, Oil Yes

Obama and other western deciders are most surely and certainly influenced by the OECD's oil and energy watchdog agency the IEA. It's energy scenarios and forecasts for the next 21 years, to 2035, heavily feature long-term increases of oil supply from Iraq to help meet 'soaring oil demand'. As I noted in other recent articles on this subject, the IEA uses thinly-disguised Peak Oil alarmism (alongside its Global Warming alarmism), and has singled out Iraq as a silver bullet solution on the oil supply side.

The IEA's own Factsheet for Oil Supply in Iraq, published 13 June, and real world data on Iraq allows and enables plenty of doubt on this claim by the IEA. These merely repeat the unrealistic oil-happy bragging of Nouri el-Maliki's shaky coalition government.

Apart from being predicated on a semblance of civil peace in Iraq, the IEA's Iraq scenarios are based on continued forecasts of world oil demand increasing by about 12 - 15 million barrels a day by 2035 (from the IEA's estimate for early 2014 of about 90 Mbd). If we believed IEA forecasts, world demand for oil imports, by 2035, will increase by about one-half of today's total export supply of all 12 OPEC countries (which is about 30 Mbd). Apparently no problem for the IEA, when it puts on its Global Warming-Low Carbon hat, it says world fossil energy use, including oil, must be capped by or before about 2040 and then reduced to nothing by 'about the end of the century'. So we need Iraq oil now but not for all that long!

Despite Iraq's major success in raising oil output through 2011-2013, by about 25%, this growth was however already tailing off seriously by late 2013, and production on the eve of the ISIS invasion was around 3.1 Mbd enabling net oil exports of about 2.6 Mbd, of which only 1 Mbd went to the OECD group of countries.

The el-Maliki government's claims of future output are wide ranging, depending on spokesman, but some claims went as high as nearly 10 Mbd (the same as Saudi Arabia and Russia) 'by about 2029'.

Inside OPEC, shown by statements by different oil ministers at OPEC conferences, Iraq's claims are not treated as a threat to oil prices - due to continued fast growth of Iraqi output being unlikely or very unlikely, and peak Iraqi output being likely, at most or at best to be one-half the 10 Mbd goal. Many oil analysts doubt if Iraq can achieve better than 4 - 4.5 Mbd by the early 2020's, under the best conditions of civil peace and continued high levels of investment in the oil sector. The potential for decline from today's output of about 3.3 Mbd also exists, especially if there is investor retreat.

The Trouble With Oil

IEA claims, simply repeating the claims coming out of Baghdad, ignore or sideline other high potential and likely growths of national oil output, outside the Gulf region and Iraq. While the IEA cites US and Canadian shale oil production growth, and increasing oil output from Kazakhstan, it gives little attention to Azerbaijan's high potential for output growth and makes little reference to west and east African onshore and offshore oil and gas development. Shale oil production outside of North America is still treated, by the IEA, as either hypothetical or long-term. World NGL (natural gas liquids) output growth - which the IEA says is urgent and necessary due to depletion of 'conventional first generation' oil - will certainly occur but it will certainly not feature Iraq as a major NGL producer.

As we know the three-largest world oil producers (Russia, Saudi Arabia, USA) include two non-OPEC producers and their total combined output is close to 33% of world total oil demand. Only the OPEC member Saudi Arabia could likely cut oil output by any major amount - but past real world experience, in the 1986-2000 period shows that Saudi Arabia soon abandons 'price defending output cuts'.

Link to Full Informative Article:

http://www.oilvoice.com/n/Should_the_We ... 1f6cb.aspx
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Re: Kurdistan Oil & Gas Development

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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sun Jun 22, 2014 11:10 am

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Israel accepts 1st delivery of disputed Kurdish pipeline oil

U.S. against independent Kurdish sales

* Israel keen to build rapport with Kurds

* KRG denies dealing with Israel

* Israel previously bought small cargoes of trucked oil

* Third cargo begins loading at Turkish port of Ceyhan (Adds comments from Kurdistan Regional Government)

By Julia Payne

A tanker delivered a cargo of disputed crude oil from Iraqi Kurdistan's new pipeline for the first time on Friday in Israel, despite threats by Baghdad to take legal action against any buyer.

The SCF Altai tanker arrived at Israel's Ashkelon port early on Friday morning, ship tracking and industry sources said. By the evening, the tanker began unloading the Kurdish oil, a source at the port said.

The Kurdistan Regional Government said on Saturday, a day after the news was first reported, it did not deal with Israel in the sale.

"The KRG categorically refutes the claim that it has sold oil to Israel," a spokesman for the Ministry of Natural Resources said in an email. "The KRG has not sold oil either directly or indirectly to such a destination."

The spokesman did not comment on questions asking who the KRG had sold the oil to, or how crude oil from Iraqi Kurdistan had been delivered to Israel.

Reuters was not able to confirm whether the KRG sold the oil directly to a buyer in Israel or to another party. Oil cargoes often change hands multiple times before reaching their final destination.

In a statement on its website earlier on Saturday, the KRG said: "We are proud of this milestone achievement, which was accomplished despite almost three weeks of intimidation and baseless interferences from Baghdad against the tanker-ship owners and the related international traders and buyers."

Securing the first sale of oil from its independent pipeline is crucial for the Kurdistan Regional Government (KRG) as it seeks greater financial independence from war-torn Iraq.

But the new export route to the Turkish port of Ceyhan, designed to bypass Baghdad's federal pipeline system, has created a bitter dispute over oil sale rights between the central government and the Kurds.

The United States, Israel's closest ally, does not support independent oil sales by the Kurdish region and has warned possible buyers against accepting the cargoes.

Israeli leaders have been alarmed in recent months, however, by signs of a possible rapprochement between the United States and Iran.

Officials said Israel was keen to build good ties with the Kurds, hoping to expand its limited diplomatic network in the Middle East and broaden options for energy supplies.

It was not clear whether the crude in the SCF Altai has been sold to a local refiner or was slated to discharge into storage, potentially for another destination.

"We do not comment on the origin of crude oil being imported by the private refineries in Israel," an Israeli energy ministry spokeswoman said.

The port authority at Ashkelon declined to comment.

FIRST SALES

The first tanker to carry Kurdish pipeline oil is still homeless after loading in May. After a false start sailing to the United States, the United Leadership tanker turned back towards Morocco, where it is anchored after local authorities refused to let it discharge for the Mohammedia refinery.

The SCF Altai did not arrive directly from Ceyhan.

The United Emblem was the second tanker to load crude at Ceyhan from the KRG pipeline at the start of last week. It then made a ship-to-ship transfer near Malta to the SCF Altai during June 14-16, several Maltese shipping and market sources said and ship tracking showed.

A third tanker was loading one million barrels of oil from the pipeline, a source at the Turkish ministry said on Friday.

Several market sources said the United Emblem tanker, which loaded the second batch, had gone back to Ceyhan to load the third cargo. Ship tracking showed the tanker berthed at one of the Ceyhan jetties on Friday.

Israeli refineries have taken Kurdish crude oil before but in small volumes, which were shipped to Turkish ports by truck. Some oil has also been stored there.

The KRG began exporting a small volume of its Taq Taq crude grade by truck to Turkey in early 2013 and then added another grade Shaikan at the start of this year.

Israel has less to lose than other U.S. or European refiners, because it has no contract for Iraqi oil. Iraq participates in the boycott of Israel along with many other Arab states.

Italy has warned traders and refineries about the legal risks of importing the oil. Large companies with oilfield interests in southern Iraq have stayed clear, although a joint refining venture by Rosneft and BP used a cargo of trucked oil in May.

The KRG's pipeline is currently pumping around 120,000 barrels per day to Ceyhan. The region's natural resources minister is aiming to export 400,000 bpd by year-end.

Emboldened by its takeover of the major Kirkuk oilfield in northern Iraq, the KRG is also openly talking about the potential of exporting this oil through its pipeline as well after Kirkuk's usual pipeline outlet was sabotaged. (Additional reporting by Crispian Balmer and Steven Scheer in Jerusalem, Amir Cohen in Ashkelon, Orhan Coskun in Ankara, Ron Bousso in London and David Sheppard in Arbil; Editing by Jane Baird and Stephen Powell)


Confusing 8-|
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sun Jun 22, 2014 11:15 am

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Kurds Look For Oil Buyers As Tension With Iraq Increases
By Meagan Clark

After weeks of seeking a buyer for a disputed cargo of millions of barrels of oil pumped and exported from the semi-autonomous region of Kurdistan in Iraq, the cargo remains floating on the Mediterranean Sea amid conflicting ownership claims with Iraq’s central government.

The ship has been tracked to waters nearby Israel's Ashkelon port and Reuters reported that the tanker is expected to dock early on Saturday, although it was not clear whether the oil on board the SCF Altai tanker had been sold to a local refiner or was going to be stored. "We do not comment on the origin of crude oil being imported by the private refineries in Israel," an Israeli energy ministry spokeswoman was quoted as saying by Reuters.

“If that tanker docks, Iraq’s Kurdistan Regional Government (KRG) will take an important step toward independence,” Nihat Ali Ozcan, an analyst at the Economic Policy Research Foundation in Ankara, Turkey, told Bloomberg.

Facing legal threats from Baghdad, European governments have been wary of accepting the contentious cargo that left the Turkish port of Ceyhan in early June.

The KRG exported the crude via a new pipeline from the autonomous region in Iraq to the Turkish port of Ceyhan. The pipeline's construction, designed to bypass the central government's own pipeline network, is at the center of the ongoing row between Baghdad and the Kurds.

Baghdad and the KRG have been locked in a dispute over the right to sell oil produced in the autonomous region for months. Both parties insist that Iraq's constitution allows them to export the oil independently.

The KRG, which accuses Baghdad of withholding government funds it is owed, has long sought to increase its financial independence from the central government.

The SCF Altai tanker loaded the disputed crude from the United Emblem tanker during a ship-to-ship transfer near Malta, ship tracking data showed. The United Emblem was the second shipment of Kurdish crude to leave the port of Ceyhan. The first, United Leadership, remains at sea.

Kurdish administration representatives denied on Friday that they’re offering the load at half-price, according to a Bloomberg report.

Kurdish armed forces wrested control of Iraq’s key northern oil city, Kirkuk, from Islamist militants, who in turn took control of the city from the Iraqi army last week. The Kurds have long claimed the city should be a part of their autonomous region. Selling the oil would allow the Kurdish region to become one step closer to financial independence from Iraq and feed its expanding territory’s economy.

The Kurdish government views the oil exports as within its rights under the Iraqi constitution.

“The big question is: ‘who will control the oil’? Counterparts in Baghdad did not identify ‘right’ or ‘wrong’ KRG actions – they just wanted to control the issue completely,” KRG Prime Minister Nechirvan Barzani said on June 4, in an address to Parliament. “We do not view this issue as a path towards Kurdistan’s independence, but rather as the expression of our constitutional rights… upon which we agreed when we returned to Iraq in 2003 and 2004, and they have to be implemented in Iraq.”

Turkey also sees the Kurdish oil, exported through its Mediterranean port of Ceyhan, as “entirely legitimate,” Turkey’s energy minister Taner Yildiz told Bloomberg. At the World Petroleum Congress in Moscow this week, he said the next shipment of oil is scheduled for Sunday, and that currently, 100,000 to 120,000 barrels of oil flow each day from northern Iraq, and 2.3 million barrels of oil are stored in Ceyhan.

According to Bloomberg, Iraq’s Deputy Prime Minister Hussain al-Shahristani said on Iraqiya television Tuesday that “the Iraqi people won’t forget those who conspired against them during tough times,” and “Turkey should be aware that this is like playing with fire. This is plundering the wealth of Iraq.”

Nigel Wilson of IBTimes UK Contributed to this report

http://www.investing.com/news/commoditi ... ses-290763


Admit it dear reader you are still confused :))
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sun Jun 22, 2014 11:20 am

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The SCF Altai tanker docks near Israel's Ashkelon port June 20, 2014. Iraqi Kurdistan looked set to unload in Israel a first cargo of disputed crude oil from its new pipeline after weeks of seeking an outlet as Iraq's central government has threatened legal action against any buyer.


I think Kurds have sold the oil to Israel :D

But the way things are at the moment we cannot believe anything 100%
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sun Jun 22, 2014 11:25 am

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Second Tanker of Kurdish Oil Delivered, Two More Loading

A second tanker load of Kurdish oil has been safely delivered to buyers and two more vessels are being loaded at the Turkish port of Ceyhan, the Ministry of Natural Resources in Erbil announced.

The MNR has so far not identified the buyers of the first consignments of crude to be shipped through the new pipeline to Ceyhan in recent weeks. However, Reuters news agency reported on Friday that the first cargo of KRG oil aboard the SCF Altai was due to be offloaded at the Israeli port of Ashkelon.

The ship-tracking service MarineTraffic on Saturday showed the 80,000-tonne Liberian-flagged tanker moored at Ashkelon port.

Israeli officials told Reuters they did not comment on the origin of crude oil imported by private refineries in Israel. The agency said it was not able to confirm whether the KRG sold the oil directly to a buyer in Israel or to another party. It noted that cargoes often changed hands multiple times before reaching their final destination.

The Erbil ministry said the first two consignments sold were each of around one million barrels.

“We are proud of this milestone achievement, which was accomplished despite almost three weeks of intimidation and baseless interferences from Baghdad against the tanker-ship owners and the related international traders and buyers,” the ministry statement said.

It went on to outline the KRG’s legal case for shipping oil directly from fields within its territory, countering Baghdad’s claims that all Iraqi crude must pass through the State Oil Marketing Organization (SOMO).

Reasserting a position that natural resources minister Ashti Hawrami put to Western officials and oil industry executives in London this week, the statement said the KRG was acting fully within its authorities under the 2005 Iraqi constitution.

By interfering with exports of oil from Kurdistan, Baghdad was acting “grossly outside its limited authorities” under the constitution, which made no mention of a federal oil ministry or of SOMO, the statement added.

It said the oil was being exported in full accordance with the KRG’s legal prerogatives. These included a provision that allows the KRG to retain the proceeds of petroleum sales in circumstances where the federal government was not sharing revenues in accordance with the federal constitution.

Hawrami said in London this week, addressing the Iraq Petroleum Conference, that the KRG’s agreed 17 per cent of the national budget had dwindled to 10 per cent before being cut to 0 per cent by Baghdad.

He said the KRG had been obliged to borrow on the international market to cover its expenditure.

The statement from his ministry, distributed on Friday, said Baghdad had been attempting to use old, Saddam-era laws, which were no longer valid, to threatened potential buyers of Kurdish crude. That merely served to underline the lack of express federal authority under the constitution.

The statement spelled out that the Iraqi constitution gave the KRG the right to: authorize, regulate, and manage the export of petroleum and petroleum products from the Kurdistan Region; to build, own, regulate, and manage petroleum and product pipelines in the Kurdistan Region, including pipelines that connect to pipelines at an international border with the Kurdistan Region; and to enter into agreements with foreign government authorities for the regulation and connection of international pipelines, for the sale of petroleum produced by the KRG, and for the transportation of petroleum and petroleum products owned by the KRG.

http://rudaw.net/english/kurdistan/210620141


Still confusing but in a much more positive way :ymdevil:
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Tue Jun 24, 2014 1:18 am

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Oryx Petroleum announces first sales from Demir Dagh in the Kurdistan Region of Iraq

Oryx Petroleum Corporation Limited announce that it has sold its first offtakes of crude oil into the domestic market from the Demir Dagh field in the Hawler license area in the Kurdistan Region of Iraq. Oryx Petroleum is the operator and has a 65% participating and working interest in the Hawler license area.

Commenting today, Michael Ebsary, Oryx Petroleum's Chief Executive Officer, stated:

"We are delighted to announce that we have completed our first sales from the Demir Dagh field. This is a critical milestone in Oryx Petroleum's evolution to becoming a full-cycle exploration, development and production company. We now look forward to increasing production, revenue and cash flow as we continue to develop Demir Dagh and our other Kurdistan discoveries."

The Corporation recorded its first lifting of crude oil on Friday June 20 from the Demir Dagh field. Through June 22, 2014 the Corporation has recorded liftings totaling approximately 3,300 barrels of crude oil. The liftings are pursuant to a short term agreement to sell crude oil to a third party marketer designated by the Ministry of Natural Resources ("MNR") of the Kurdistan Regional Government. The Demir Dagh crude oil has been sold at a price of just under $60 per barrel (as determined by the MNR) reflecting local market pricing dynamics and the medium sweet quality of the crude oil.

In accordance with the crude sales agreement, Oryx Petroleum is paid in advance on a regular basis throughout the term of the agreement for scheduled liftings. Liftings are continuing and are scheduled to ramp-up over the term of the agreement. The Corporation expects that the agreement will be renewed at the end of its term, consistent with domestic sales practices in the Kurdistan Region of Iraq.

http://www.oilvoice.com/n/Oryx_Petroleu ... 31b7b.aspx
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Wed Jun 25, 2014 8:36 am

Oil-rich Kurdistan stages London event to show it's business as usual

Amid the turmoil of Iraq and Syria, the one oasis of stability, sanity and calm is the Region of Kurdistan.

In the north of Iraq, but now an increasingly autonomous entity which is pursuing nationhood status, KRG is oil-rich and western-friendly.

Which is why, on July 8, British Expertise will host a workshop on doing business in Kurdistan, in advance of its trade mission to KRG capital Erbil and Dohuk in September.

The workshop includes case studies from companies that have undertaken or won projects in Kurdistan. Lyn Edwards, Senior Partner at GMW Architects, will discuss his experience of undertaking projects in the market and Prasad Godbole, of Pioneer Healthcare, will give an overview of the company's remarkable work on the Kurdistan Children's Hospital. John Downe of Azure will give an entrepreneur's view on working in the Kurdistan Region.

Delegates will be joined by Bayan Sami Abdul Rahman, Kurdistan Regional Government High Representative to the UK, Nawal Karim, Director of Trade and Investment Relations at the KRG UK Representation, and former British Consul General in Erbil, Chris Bowers, who will provide an overview of the current political and economic situation in Kurdistan, and how natural resources will drive future interest and development.

http://www.gtglobaltrader.com/news/oil- ... ness-usual
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Wed Jun 25, 2014 8:44 am

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In Iraq, security concerns were already heavily weighing on claims, by the el-Maliki government and Iraqi oil ministers at OPEC meetings that Iraq 'would soon achieve 4 to 4.5 Mbd' - and would rejoin the OPEC quota system! While the second is possible - because Iraq's oil production is very likely to stagnate or decline, not increase - the first claim is pure and simple grandstanding. As I note in several recent articles, there are also technical issues which cast doubt over whether Baghdad will be able to capitalize on new production from major fields in the south, despite massive Russian and international oil major corporate investment.

Full Article:

http://www.oilvoice.com/n/Last_days_for ... ee339.aspx
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Wed Jun 25, 2014 11:34 pm

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Iraq: Kurds control oil-rich Kirkuk :ymparty:

It seems increasingly likely that Iraq’s strategically significant northern oil fields will – in the short term at least - stay firmly under the control of the Kurds, while the Iraqi army battles with the extremists of the Islamic State of Iraq and al-Sham (ISIS).

Federal Iraq’s North Oil Company operated the five main oilfields in Kirkuk, which produced over 500,000K bpd before the recent ISIS assault. The Kirkuk field is particularly massive: with nearly 10B barrels of proven reserves.

Kurdish control should help reassure the world’s oil markets, which are jittery over the threat of ISIS securing oil production sites in Iraq.

A continued series of attacks over the last year, and more, has stopped the flow of 350K bpd through the Ceyhan-Kirkuk pipeline. To add to the misery, 150K bpd through a pipeline to the Baiji refinery, also ceased because of the attacks on the plant.

The Kurds can arguably be seen to have the upper military and political hand for the moment. Baghdad currently does not have the military capability to impose its authority over Kirkuk and the associated hydrocarbon infrastructure.

Even if it did, it seems very unlikely that the Kurds would cede control; there was a constitutional requirement under Article 140 for there to have been a referendum on the status of Kirkuk. This was a constitutional requirement that PM al-Maliki was clearly not prepared to see enacted.

To add to Baghdad’s considerable woes, the Governor of Kirkuk: Najmaldin Karim, suggested to Arab media that Kirkuk could be integrated into Kurdistan if the toxic situation in Iraq worsens.

Karim also noted “I think the priority for the Iraqi army, if it reforms itself, is really not in this area. This area is safe. We still have a lot of contacts with Baghdad, but they have a lot of other issues to worry about. We’re doing fine here.”

However, although Kirkuk is now under control of the KRG, it has been careful to avoid any overt takeover of the management of Kirkuk’s hydrocarbons’ production facilities.

The hydrocarbons’ sector in the north of Iraq is a subject of bitter, if not downright poisonous disputes between Baghdad and Irbil, therefore the KRG will in the short-term seek to avoid turning up the heat on an already over-heated situation.

The last thing the KRG wants to manage while it considers independence is the threat of more federal Iraq legal action.

http://www.oilvoice.com/n/Iraq_Kurds_co ... 0d807.aspx
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Fri Jul 25, 2014 8:26 pm

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Oil Search reports results at the Taza-2 well, Kurdistan

Oil Search reports that at 06:00 hours KRI time on 23 July 2014, the Taza 2 well was at a total depth of 4,200 metres in a 6-1/8' hole.

During the week, having seen encouraging hydrocarbon shows towards the base of the previously drilled section, a further 102 metres was drilled to the final total depth of 4,200 metres. Wireline logs are currently being acquired over the new section of hole and preparations are underway for a comprehensive testing programme, likely to comprise drill stem tests over up to five intervals.

Taza 2 is located 10 kilometres north-west of Taza 1 and is designed to appraise the hydrocarbon-bearing intervals discovered by Taza 1 (Jeribe/Dhiban and Euphrates/Kirkuk Formations), as well as explore deeper Tertiary and Cretaceous targets including the Shiranish Formation.

The participants in Taza 2 are:

Oil Search (Iraq) Limited1 60%
Total E&P Kurdistan Region of Iraq (Taza) B.V. 20%
Kurdistan Regional Government (KRG) 20%

1 Oil Search's funding interest is 75%, with the KRG's 20% interest carried by Oil Search and Total E&P Kurdistan Region of Iraq (Taza) B.V.

http://www.oilvoice.com/n/Oil_Search_re ... a984e.aspx
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Fri Jul 25, 2014 8:34 pm

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Oil and cash flow: the Kurds' conundrum

Some ten days ago, the Kurdistan Regional Government (KRG) were reported to have sent Peshmerga units into the Bai Hassan and Kirkuk oil fields - formerly under the control of the North Oil Company (NOC) - and both of which are in areas of disputed territory.

The KRG subsequently told NOC's workers they had a choice: either work for the KRG, or leave.

The reason that the fields have been taken is pretty obvious - the KRG needs revenue and the only way to generate the right amount of homegrown cash is by selling oil.

The two fields now under control of the Peshmerga can - in theory - add some 500K bpd to the KRG's production profile and with oil prices north of $100 per barrel, that is an awful lot of money.

Houston, we have a problem

Actually, Irbil may have quite a few.

First: bringing crude oil to the world's markets will need a better Kurdish downstream infrastructure; second: there is the critical issue of physical security to consider; third: someone has actually to buy it.

The Peshmerga will need to hold the ground they have occupied while the oil workers try to connect the pipes together to send the crude on its way to Ceyhan. If they can do that, then the Kurds in effect have become the operators of two very large, potentially very lucrative oil fields.

The security issue is one about strategic width and depth. The Peshmerga have secured key sections of its borders, Kirkuk and the oil fields, but the defensive line is weaker around Mosul, in the west of which the Islamic State (IS) squats.

Irbil knows it has to create further security depth, so it has resorted to that old favourite of digging a moat - but a huge one stretching some 650 miles - to try to slow or stop the IS advance onto Kurdish territory.

By the way, to give this some context, it is 605 miles, line of sight, from Land's End to John O'Groats.

Digging big ditches is a favoured KRG tactic to lay physical and political claim to ground it has occupied, and has become a common tactic for the KRG to formalise authority over territory it claims or defends.

In Apr 14 they dug ditches between KRG territory and that of the Syrian Kurds in 'Rojava' - the name the Syrian Kurds give their land. This was not to the approval of the Syrian Kurds, anymore than the current ditch is likely to be to Baghdad or the IS.

But Irbil also faces a more localised potential security issue - namely the Sunni Arabs and Turkmen will not be best pleased to see their areas come under the sway of Irbil, and with it 'their' oil revenues.

Pipeline politics and problems

Returning to the thorny pipeline problem; before the political and security situation went to hell in a handcart, there was a joint Baghdad/Irbil proposal to use a company called KAR Group (http://www.kar-k.com/) to link a 600 mile pipeline between the Irbil-controlled Khurmala dome to the K-1 pumping station located near the Baba dome.

KAR Group built the new KRG controlled pipeline that transports oil from Kurdish fields to Turkey without Baghdad's interference.

The intra-capital cooperation plan is now clearly off the table. Nevertheless, the KRG are likely to commission KAR Group to build the connecting pipeline with Kirkuk while Baghdad remains under siege.

However, it is not just as simple as building a pipeline; it is also about installing all the technology needed to connect the various elements of the infrastructure.

A sign of just how complicated it is likely to be was shown in Apr 13 when Baghdad contracted with BP to deliver technical assistance to NOC in stopping the production decline in the Kirkuk oil field - there was wastage from the creaking infrastructure.

This leads to the issue of which IOC or oil service company is willing to run the potential political risk of upsetting Baghdad, but which can render technical expertise to the KRG in keeping the production profiles of the Avana and Baba domes on track.

Irbil needs to get a move on, before security in Kirkuk comes under threat, and the inevitable consequence of which would be the IOCs and oil service companies reviewing their position in country.

Assuming that Irbil can sort out the downstream, get a technical supplier onboard, maintain security, and maintain production then there is the small matter of securing a buyer for the oil.

Baghdad will do all it can to block the sales, and Turkey and the US will, for the moment, officially sit on the fence, risking political piles.

But the KRG desperately needs the cash - fuel rationing has also started - and Irbil needs at all costs to avoid a domestic backlash.

A twist in the tale

However, in a typical Middle Eastern twist, a senior official in the PUK said - somewhat unconvincingly - that the KRG was not even consulted before the Peshmerga occupied the oil fields.

Kurdpress reported that Salar Muhammad, a member of the PUK, went so far as actually to blame the KDP for taking control of the oil fields.

Speaking on Radio Nawa, he said the KRG should discuss with the governor of Kirkuk and its governorate every decision it makes concerning the city. Moreover, Salar asked KRG President - and KDP Leader - Massud Barzani to deal with Iraq developments more rationally and carefully.

Furthermore, he said that 'Our problems are not oil and natural resources but retaking the soil and its nation and parties should accept the outcome of their injudicious decisions.'

Equally strangely, the Kurdish Governor of Kirkuk Najmadin Karim of the pro-Iran PUK said the action by the Peshmerga was done in defiance of the previous arrangement with Baghdad that saw coordination over military operations in the disputed areas.

The Peshmerga forces, which took control of the two oilfields, are affiliated to the KDP, which means that Kurdish domestic political rivalries are conspiring to undermine the push for national independence.

Kurdish intra-party rivalry

Clearly the seizing of the oil fields by the KDP associated Peshmerga has to be seen in the context of historic Kurdish rivalry in eastern Iraq.

In the past, Kirkuk was heavily swayed by the influence of Iraqi President Jalal Talabani's PUK, which, over the years, has secured both political and military goals in Kirkuk.

Kurds agree generally that the disputed regions should be absorbed into Kurdistan. But over and above consensus on the need for oil exports to pay bills, the PUK seems to be more and more an irritant to the KDP - which lines up with Turkey.

The KDP knows that the PUK influence in oil-soaked Kirkuk gives it considerable political leverage - he who controls the spigots controls the cash.

Therefore, seen through that lens, deploying KDP-aligned Peshmerga units into the oilfields could be viewed as an attempt to stave off future political challenges by the PUK - which did not do well at the last election, being given a close run for their money by Gorran.

However, given the wolves of the IS are close to the door, the PUK will not dare to raise the stakes in the dispute. The KDP and PUK are united in seeing off the threat from the IS, as well ensuring another Kurd takes the Iraqi presidency, which happened on 24 Jul 14.

In the short-term therefore, we see it likely that there will be consensus between the two rivals in maintaining a united front to Baghdad's naked political aggression, while still trying to extract concessions from the latter on oil revenues, and the thorny issue of the federal budget allocation.

Flashpoints in oil fields

Kirkuk and the control of its super-giant oil field and other big fields has long been seen as a flashpoint between Baghdad and Irbil, a truism exemplified by the mere existence of Article 140.

However, it is not generally recognised in the west that Kirkuk has long also been a flashpoint between Kurdistan's political rivals.

There is a threat here that should be carefully noted. The Shi'a regimes in both Baghdad and Tehran seek to quash the drive by the KRG towards independence and closer links with Turkey. Just to nail that point home, last week the KRG announced an agreement with Turkey to increase oil exports, as well as a revenue mechanism.

KRG spokesman Safin Dazia said 'a delegation from the KRG including Vice President Qubad Talabani, Minister of Natural Resources Ashti Hawrami, Minister of Finance and Economy Rebaz Muhammad visited Ankara on Monday, and held a series of meetings with officials on the framework agreement on cooperation in the energy field between Kurdistan Region and Turkey.'

As we noted above, the PUK broadly align with Tehran, and have a closer relationship with the Shi'a regime in Baghdad than the KDP, so no one should be surprised if the PUK and Iraqi Shi'a groups conspire to undermine President Barzani and the KDP's plans for independence and closer ties with Turkey in particular.

It seems therefore possible that the experts at divide and rule in Baghdad and Tehran may seek to drive a wedge between the major constituent parties in the KRG.

The queue for cash

On 22 Jul 14, the PM of the KRG Nechirvan Barzani moved to reassure the Kurds that government and private salaries 'will not be lost' and confirmed that the KRG continues its efforts to address the slow distribution of salaries.

Since early 2014, Irbil has not received its monthly $1.2B budget provided for through the Articles of the Iraqi Constitution. Barzani made it clear that he saw Baghdad hoping that their withholding of the federal budget revenues Irbil is owed is a way of forcing the Kurds to submit to Baghdad's will. Barzani used the word 'surrender'.

To set some context, the $1.2B would roughly cover KRG employee salaries, as well as infrastructure projects (which also can attract external CAPEX and FDI). But the KRG suffers to an extent from the Baghdad Bloated Bureaucracy Syndrome, with somewhere near three quarters of a million government bureaucrats.

About $600K per month goes on the KRG staffers, and the 200K strong Peshmerga. There has been some phasing of salary settlements - which means some people will wait for their money - but pragmatically the front-line of the Peshmerga need to be paid on time.

And after the cash has been spent on key posts, then the IOCs line up for their fair share. But the IOCs have experienced painfully long delays in payments of receivables, a bit like in Egypt. As far as can be ascertained, the KRG owes the IOCs something around $5B.

The KRG tried the neat tactic of asking for cash up front from the IOCs to pay for the government-controlled oil security force but this has been met with a cool response from some of the IOCs whose patience is starting to grow short.

The International ATM

Local major businesses have helped prop up the KRG's creaking finances; but outside the domestic private sector, many international banks are not keen to lend cash to the KRG.

The KRG secured a substantial loan from Ankara in Mar 14 - around the $2-3B mark - but has had to go back asking for more - a delegation was recently in Ankara, and there are reports that three Lebanese banks have been supporting Iribil financially.

For Irbil, strategic cash flow is indivisibly linked to oil flow. What is quite clear is that although the KRG has control of the Kirkuk oil fields; it is still desperately short of cash. The only country likely to help is Turkey.

As noted above, the Kurds are trying to connect Kirkuk's production into the Kurds' downstream infrastructure.

It is a moot point how the Kurds can use the crude; Kirkuk is heavy crude so it needs to be blended with the crude from Taq Taq to make it lighter and easier to sell, but purchasers are less happy to buy blends as they are of variable consistency. Given the shortfall in oil from Baiji, we think it more likely that the Kurds would refine the crude for their domestic market.

So the KRG has a debt pile that is only growing, and still faces problems in gaining international acceptance and kosher clients for its crude oil - whose sale is the only realistic way of generating enough revenue to pay down the debts and build up its strategic finances if it wants to go down the independence flightpath.

But Baghdad is still as intransigent as a Russian nationalist and maintains its position that any oil sold by Irbil is illegal oil.

A week ago, Ankara stopped the pumping of oil to Ceyhan - not for any malicious reason, but a practical one - their storage tanks are full of unsold Kurdish crude.

Ankara holds lots of cards and lots of cash. $93M to be precise - the revenue from the first cargo of Kurdish crude. The cash is being held in a Turkish Halkbank account.

However, Ankara will step carefully before deciding to release the funds as both Baghdad and Washington are opposed to its disbursement to Irbil. The KRG sent a delegation to Ankara to resolve the issue over delivering the cash to Irbil, but nothing officially appears - as yet - to have happened

Dollars and deals

But dollars equal deals. There will be we think an energy/political deal between Ankara and Irbil which will relate to the Kurdish drive towards independence, about which Turkey remains officially ambivalent.

Ankara hopes to control the intent of the KDP towards secession, as much as Tehran wishes through the PUK to limit Turkey's influence and Ankara's financial grip on Irbil.

However, the Kurds are dealmakers, and there is enough cash in domestic wallets to allow the region to stagger on while the politics play out in the background, and ISIS manoeuvres malevolently to the south and west.

But the shortage of cash will lead to a shortage of patience between the KDP and the PUK. The longer Baghdad and Irbil remain at loggerheads, the greater Ankara's financial and influence grows in Irbil.

This means Tehran will seek to offset Ankara's influence through support to the PUK, while the third key political party - Gorran - a PUK splinter group - will also seek to mitigate Ankara's influence on the KDP.

On 18 Jul 14, Tehran shut the border to Kurdish oil tankers, shutting off a major source of revenue. This is also a kick in the wallet for IOCs that need to sell their oil. Iran had been providing a discreet route to market for more than 25% of the Kurds' oil production.

If the border is shut to wider trade goods, then Tehran will in effect have placed the KRG under an economic embargo, the aim of which will be to increase economic pain across the region and which could cause political pain in the PUK if the KDP sees Tehran trying to play divide and rule.

The political litmus test will be if Tehran reaches out to Iraq Shi'a political parties to persuade them to work with cooperative Kurdish politicians, while the new government forms in Baghdad.

If that happens, then we will know The Great Game is afoot, and we will be able to expect further edgy political dance steps as each party manouevres for position and advantage, and Kurdistan edges towards independence.

http://www.oilvoice.com/n/Oil_and_cash_ ... 7051a.aspx
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Fri Jul 25, 2014 8:44 pm

Baghdad threatens to sue as Kurdish oil tanker nears Texa

A tanker carrying crude oil from Iraqi Kurdistan is just two days away from arriving at a U.S. port, according to ship tracking satellites, despite Washington's long-standing objection to independent oil sales from the autonomous region.

The United Kalavrvta tanker, which left the Turkish port of Ceyhan in June carrying oil delivered via a new Kurdish pipeline, is due to dock in Galveston, Texas, on Saturday, Reuters AIS Live ship tracking shows.

A sale of Kurdish crude oil to a U.S. refinery would infuriate the Iraqi government, which fears the country’s autonomous, relatively secure Kurdish region is poised to declare its independence amid Iraq’s chaotic security and political environment.

Baghdad considers independent Kurdish oil deals as smuggling and has threatened to sue anyone that buys Kurdish oil.

Washington, a reluctant backer of embattled Iraqi Prime Minister Nouri al-Maliki, has pressured companies and governments not to buy crude from the Kurdish Regional Government (KRG), but has stopped short of outright banning U.S. firms from buying it.

It, too, has fears Iraq could split apart unless the Kurds are appeased.

Full article:

http://america.aljazeera.com/articles/2 ... versy.html
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sat Jul 26, 2014 10:34 pm

Reuters

Iraqi Kurdish oil nears Texas port for likely offloading

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A tanker carrying crude oil from Iraqi Kurdistan is hours away from the Port of Galveston in Texas, according to Reuters ship tracking data and the U.S. Coast Guard, its arrival imminent despite Washington's concerns about independent oil sales from the autonomous region.

The Marshall Islands-flagged tanker United Kalavrvta, which left the Turkish port of Ceyhan in June carrying oil from a new Kurdish pipeline, is slated to approach the Texas port of Galveston on Saturday evening and has issued a notice of pre-arrival to ship traffic managers.

But Coast Guard Petty Officer Andy Kendrick said the ship is too large to enter the Galveston port, near Houston. That means it would have to offload its cargo onto smaller ships offshore before the oil is delivered to the U.S. mainland.

It could possibly start offloading the oil as soon as Sunday, after Coast Guard officials carry out routine safety inspections of the vessel.

Kendrick also said the Coast Guard was in contact with the U.S. State Department, the National Security Council and the Department of Homeland Security about the ship's arrival.

Trading sources in Texas, New York, London and Geneva have been unable to identify the buyer of the United Kalavrvta's cargo. The oil could go to any one of the many refineries located along the U.S. Gulf Coast.

The ship carries approximately 1 million barrels of crude, which would fetch more than $100 million at international prices.

Any sale of Kurdish crude oil to a U.S. refinery would infuriate Baghdad, which sees such deals as smuggling, raising questions about Washington's commitment to preventing oil sales from the autonomous region.

The U.S. government has expressed fears that independent oil sales from Kurdistan could contribute to the break-up of Iraq as the government in Baghdad struggles to contain ultra-hardline Islamic State, a group of Sunni Islamist insurgents who have captured vast areas of the country.

But it also has grown frustrated with Iraqi Prime Minister Nuri al-Maliki's handling of the crisis.

Washington has pressured companies and governments not to buy crude from the Kurdish Regional Government (KRG), but it has stopped short of banning U.S. firms from buying it outright.

The KRG has renewed its push for an independent state amid the latest violence roiling Iraq. Its relationship with Baghdad has deteriorated over what it sees as Maliki's role in stoking the crisis and the long-running dispute over oil sales.

On Thursday, Carlos Pascual, head of the U.S. State Department's Energy Bureau, told Reuters that there had been no change of policy in Washington toward Kurdish independent oil sales, but he said he hoped the central government and the region could reach an agreement in time.

Baghdad has threatened to sue anyone that buys Kurdish oil.

(Additional reporting by David Sheppard in London, editing by G Crosse)

http://www.reuters.com/article/2014/07/ ... ce=twitter
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sat Jul 26, 2014 10:38 pm

al-monitor

Independent Kurdistan far from done deal

The picture seemed bleak from the very beginning. The announcement of the Islamic State (IS) and Iraqi Kurdistan’s accelerated pace towards secession forewarned of dark days ahead for the region, known for its large oil reserves. The relationship between geopolitical developments and energy is correlated, for whenever the political and security situations worsen, oil prices rise as a result of real or perceived fears about supply disruptions.

But, the oil market has remained relatively stable since the world’s rude awakening early last month to teh Islamic State’s takeover of Iraq’s second largest city, Mosul; the organization’s subsequent advance on the ground; and its announcement of the establishment of the caliphate. As a result, the price of crude oil increased by 5% per barrel, compared with the 22% rise during the Libyan revolution.

Consequently, the oil market did not witness the price swings that occurred following pivotal events in the region, such as the 1973 Arab-Israeli war, which led to the first oil shock, when the price per barrel quadrupled, or the second such shock, following the Iranian Revolution, when the price per barrel surpassed the $40 mark for the first time in history. This prompted everyone to be less concerned with the actual price than with securing supplies, particularly considering that Iran, at the time, was the second-largest OPEC producer of oil and in the absence of alternative supply sources, such as Alaska, the North Sea and other producers.

This time around, the market reaction has been largely subdued, as it has grown accustomed to dealing with Middle East unrest. Three factors now allay concerns. First is the growth of domestic production of oil and gas in the United States, which consumes one of every four barrels of oil consumed worldwide. As a result, any reduction in supply ... to the largest consumer and importer of oil in the world would encounter a situation that has changed today due to the rise in domestic production.

Second, Saudi Arabia, and to a lesser extent Kuwait and the United Arab Emirates, still possess excess oil production capacities with which they can compensate for other producers’ supply shortages. In this regard, Saudi Arabia produces today a little less than 10 million barrels per day, which means that it possesses an excess production capacity of over 2.5 million barrels per day, despite the fact that some experts questions whether it is capable of producing 12.5 million barrels per day, and for how long. As such, levels of production volumes have never been tried. The third stability factor, at least for the time being, is connected to the developments in Iraq.

Kirkuk’s oil

Although the oil industry suffered from the embargo, as well as from a lack of security and political stability during the past decades, the latest developments have imposed a new reality on the ground.

First, Kurdish peshmerga forces took control of Kirkuk, following the Iraqi army’s withdrawal from the northern regions. Kirkuk’s oil industry dates back to 1927, when the Kirkuk field was discovered and became productive seven years later, with supplies reaching world markets through a pipeline that stretched to Haifa in Palestine, and Tripoli in Lebanon. The field’s production grew to approximately 900,000 barrels per day at the beginning of the last decade, but subsequently dwindled as a result of the poor management of reserves — with production currently hovering around the 260,000 barrel per day mark.

The Baghdad government tried to double the field’s production capacity, and signed, toward that end, an agreement in principle with British Petroleum, which was rejected by Erbil because it considered Kirkuk to be a disputed area, while noting that the latter’s reserves are estimated to top 8 billion barrels.

On the other hand, Iraqi Kurdistan’s total current oil production averages 200,000 barrels per day, and is expected to double to reach 400,000, if the pipeline that it built to Turkey comes online. Furthermore, Erbil is planning on increasing its production capacity to 1 million barrels next year, and to 2 million barrels within five years. But, all these plans depend on proper marketing, Turkey’s compliance and non-objection on the part of Washington.

In this regard, estimates indicate that Kurdistan possesses oil reserves amounting to 45 billion barrels, placing it 10th globally in terms of reserves, if it ever became an independent state. But, contrary to OPEC countries with large reserves, such as Saudi Arabia, Venezuela and Iran, Iraqi Kurdistan’s government allows foreign companies to operate on its land, with the list of these companies including energy giants such as France’s Total, and Exxon Mobil and Chevron from the United States, among others. In addition to huge reserves, these companies are tempted by favorable production-sharing agreements, and the fact that Iraqi oil in general, including oil in Kurdish areas, is easy to extract, with well-established oil field locations.

The political factor

Still, the political factor remains the main hurdle before any anticipated launch of the Kurdish oil industry, for Baghdad objects to the matter, as does Washington, which does not want to see Iraq partitioned. In this context, it is important to monitor whether Israel will contribute in pressuring Washington to change its position, under the pretext that the latest developments in Iraq have left the country in a de facto divided state.

In practical terms, attention will remain focused on the Turkish position, which is the weightiest. On the one hand, an increase in Kurdish oil exports will bolster the developing Turkish economy, with Turkey being the only gateway for Erbil to world markets. In addition, Ankara relies on foreign sources to supply it with 90% of its petroleum needs. But, the greatest concern for Turkey is that a Kurdish state [in Iraq] might tempt Turkish Kurds to follow in the footsteps of their Iraqi brethren. Noteworthy here is that Kurdish leader Massoud Barzani’s call for a referendum on the province’s independence was welcomed only by Israel — an Israeli enthusiasm that Washington and Ankara view with suspicion and which bolsters their conviction that the experience underway with Iraqi Kurds might repeat itself with the Kurds of Turkey.

On the other hand, what occurred in Mosul will lead to two additional repercussions: The Baghdad central government will be compelled to divert all its exports south through the Gulf, while Turkey, whose oil and gas needs are increasing, might not find any recourse but to cooperate with the Erbil government on the issue of oil, and abandon its reservations against allowing Kurdish oil exports to pass through its territories. Turkey objected to this plan out of fear of angering Baghdad, which considers any such exports to world markets illegal if they occurred without its approval.

Such a scenario actually took place when the first exported Kurdish oil shipment abroad remained stranded in world ports for more than a month, until it was bought by an Israeli importer. Since Kurdistan is landlocked, any state established there will have to rely on oil for its survival, as well as on Turkey, which is considered to be the gateway to the world for that landlocked state possessing no refining capabilities or traditional marketing avenues for its oil. To a large extent, this makes it hostage to the Turkish position. Furthermore, these problems will reduce the willingness of companies to invest in Kurdistan, for it is unclear how they might benefit and recuperate these investments in the absence of tried marketing avenues for Kurdistan’s oil.

Questions

Does Kurdistan intend to seize this “once in a lifetime opportunity,” even if by gradually creating a new fait accompli, or is it cognizant of the regional and international limitations against such a move? As a matter of fact, it is threatening to secede to secure more power to administer its own affairs and dispose of its oil wealth while remaining part of a unified Iraq.

But, with respect to the repercussions of the events in Iraq on the oil industry, the International Energy Agency expects OPEC to increase its production capacity by more than 2 million barrels per day, pushing said production to 37 million barrels per day within five years, with 60% of that increase expected to come from Iraq.

While the current turmoil might hinder Iraqi plans to increase production, southern fields seem secure due to their location in predominantly Shiite areas. Furthermore, both Baghdad and Erbil have the desire and the motivation to increase their oil production and reap financial rewards enabling them to maintain their political and military stances.

These factors limit the repercussions of Iraqi events on the oil market, at least for the foreseeable future, and according to information at hand.

http://www.al-monitor.com/pulse/busines ... stry-.html
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Mon Jul 28, 2014 7:36 pm

Rudaw

In Victory for Kurds, Tanker Cleared to Offload Kurdish Oil in US :ymparty:

ERBIL, Kurdistan Region - A tanker carrying crude oil from Iraqi Kurdistan has been permitted to unload its cargo near the Port of Galveston, in Texas, despite threats from Baghdad to sue anyone who buys Kurdish oil.

The docking of the ship in the US port marked not only the first arrival of Kurdish crude oil to the United States but an important victory for the Kurdistan Regional Government (KRG), which has faced challenges in finding buyers for its disputed crude oil.

Andy Kendrick, a Coast Guard petty officer, was quoted as saying the tanker was to pass inspection and then would be ready for offloading. He added that the US National Security Council, State and Homeland Security departments were informed of the arrival and status of the vessel.

Coast Guard officials went aboard the United Kalavrvta tanker on Sunday and verified the ship and crew's ability to safely offload the oil, Kendrick told the Reuters news agency.

Crude offloading was to begin as soon as the ship arranged a contract with a company that performs lightering, the process of offloading that can take between several hours to days, depending on the size of the cargo.

A State Department official, speaking on condition of anonymity on Sunday because of the sensitivity of the issue, said officials were well aware of the ship's location and cargo.

"This is a private commercial matter," the official said. "Our policy has not changed. Iraq's energy resources belong to all of the Iraqi people. As in many cases involving legal disputes, the United States informs the parties of the dispute and recommends they make their own decision with advice of counsel."

Iraq’s Oil Ministry has threatened to sue anyone who purchases oil from the Kurdistan Region after the KRG struck deals to sell crude oil via Turkey without first receiving Baghdad’s approval. The KRG has accused Baghdad of using bullying tactics to stop its oil sales and maintains that it will only keep the 17 percent share of the oil revenue sales, in line with the Iraqi constitution.

"The government of Iraq will reserve the right to sue any company, refinery or trader that buys the Iraqi crude that KRG is illegally offering," an official from Baghdad's state oil marketer SOMO told Reuters on Thursday.

"Our foreign legal team is watching closely the movement of the vessel and is ready to target any potential buyer regardless of their nationality."

The United States has warned against purchasing crude oil from Iraqi Kurdistan because of the potential legal implications from Baghdad. The United Leadership tanker carrying Kurdish crude appeared to be bound for the US in June but ended up in Morocco.

Marie Harf, deputy spokesperson for the State Department, told Rudaw that the State Department does not necessarily deem sales of crude oil from Iraqi Kurdistan illegal, but “there’s a legal dispute process here, an arbitration mechanism. There will be a legal ruling on it.”

Reuters reported that the ship is carrying approximately 1 million barrels of crude, at a value of about $100 million in the current market. The news agency reported that a crude tanker of Kurdish oil landed in Israel and was offloaded in late June, a claim the KRG denies.

Landing crude in the US is a feat for Iraqi Kurdistan, which is trying to establish its own oil trade and is in dire need of revenue since Baghdad cut the region’s funding in January.

http://rudaw.net/english/world/28072014
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