Iraq says restart of northern exports waiting on Turkey

Iraq's oil minister Hayan Abdulghani said today that his country is waiting for a green light from Turkey to resume exports of northern Iraqi crude through the Mediterranean port of Ceyhan, but hinted that it could come following the conclusion of Turkey's presidential elections.

"We are waiting for their [Turkey] response," Abdulghani told the Qatar Economic Forum in Doha today. Turkey had previously told Iraq it was evaluating whether the pipeline was damaged as a result of the devastating earthquakes in February.

Abdulghani said both sides have engaged in negotiations since the international arbitration ruling in March that said Turkey had breached a 1973 pipeline agreement by allowing KRG oil to be exported without Baghdad's consent between 2014 and 2018.

"We have signed four contracts [with international oil companies in Kurdistan Iraq] allowing us to export oil from that part of Iraq and we have informed our counterparts in Turkey," the minister said. As part of the deal between Baghdad and Erbil, state marketer Somo will be marketing crude from the northern Kurdish region which will also be subject to Baghdad's official formula prices. "There will be an Iraqi delegation sent to Turkey in order to make sure that oil exports can be possible," Abdulghani added.

Asked by Argus on the sidelines of the forum whether he expects crude exports to restart after Turkey wraps up its presidential elections, Abdulghani said "yes, I hope so". The second round of Turkey's presidential election takes place on 28 May as neither incumbent Recep Tayyip Erdogan nor opposition rival Kemal Kilicdaroglu passed the 50pc threshold needed to win the vote.

A source with knowledge of the matter acknowledged to Argus that the restart of exports has become more of a political than a logistical issue.

By Bachar Halabi