KRG Works to Break Oil Export Deadlock

摘要

A self-imposed May 2 deadline for Iraq's semiautonomous northern region of Kurdistan to start directly marketing pipeline oil exports in defiance of the central government in Baghdad has come and gone without, as PIW went to press, any oil starting to move. But the Kurdistan Regional Government (KRG) and its ally Turkey are making intensive efforts to find a formula that will free the Kurdish oil industry from Baghdad's fetters, while minimizing potential consequences. For oil investors, Kurdistan offers that rarest of prizes — low-cost conventional oil with attractive terms. And while the ongoing political uncertainty means that the KRG looks set to miss its end-2015 production target of 1 million barrels per day, a swift resolution to the oil dispute should see the region emerge as a 1.5 million b/d-plus producer by 2020. Some 1.8 million bbl of KRG crude is in storage at the Turkish port of Ceyhan awaiting imminent approval for marketing, with total KRG oil exports running at 100,000 b/d, Turkish Oil Minister Taner Yildiz said last week. Something clearly has to be done with this crude, but this is a high-stakes game — politically, any misstep could push Baghdad into open conflict with Erbil and lead to a permanent cutoff of vital central government funding.