Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Nov. 24 -- Oil shipments along the Kirkuk-Ceyhan pipeline are set to resume later this week following a Nov. 21 bomb attack on the line near Midyat in the Mardin province in southeast Turkey.
"Repairs have begun on the part of the line affected by the explosion," said a Turkish energy ministry official. "It still doesn't work, and oil flow has been stopped since the day of the explosion."
The official said, "It's difficult to give a date for flow to start but we're aiming for a week," adding that oil was still flowing through a line that runs parallel to the affected link.
The Kurdistan Workers Party (PKK) rebel group claimed responsibility for the bomb attack, which triggered a large fire that stopped flow of 400,000 b/d of Iraqi crude along the line.
Turkish authorities confirmed that the blast appeared to be caused by sabotage, although they said an investigation was ongoing.
The Iraqi Oil Ministry said exports from the pipeline would be unaffected as there were about 6 million bbl of Kirkuk crude already in storage facilities in Ceyhan.
KRG wants export rights
The attack near Midyat, 80 km from the Turkey-Iraq border, was the second on the Turkish section of the pipeline this month, following a bombing Nov. 5, which shut down the line and forced Turkish pipeline operator BOTAS to undertake repairs (OGJ Online, Nov. 7, 2008).
According to analyst BMI, the PKK attacks are likely to continue unless there is a wider agreement allowing the Kurdish Regional Government (KRG) in northern Iraq to export via the pipeline.
In that connection, Iraq's oil minister and officials from the largely autonomous Kurdistan region agreed on Nov. 24 to link two Kurdish oil fields to the main northern export pipeline to the Turkish port of Ceyhan.
"Concerning this issue, we have agreed to prepare and link the pipeline (from both fields) to the Iraqi strategic pipeline," said Iraqi oil minister Hussain Al Shahristani, referring to the Shiwashuk and Tawke oil fields.
Baghdad nixes KRG deals
Still, the minister hedged slightly, saying, "Regarding the exporting process, there are still some unresolved points, which will be discussed…in coming days."
DNO produces oil from Tawke field, but the Norwegian firm has not been granted a license to export it due to what the central Iraqi government sees as an illegal contract it signed with the KRG.
Shahristani met with officials in the Kurdish city of Arbil for talks aimed at resolving the disputes over contracts KRG signed with international oil companies (IOCs) on its own initiative.
Altogether, the Kurds signed nearly 20 production-sharing contracts with IOCs after drafting their own oil and gas law in August 2007.
Baghdad insists that such contracts, which lack the imprimatur of the central government, are illegal. But it has been slow to approve a national oil law that the Kurds say would grant them more autonomy regarding agreements with IOCs.
Meanwhile, Iraqi oil exports increased in October to an average of 1.7 million b/d, up from 1.64 million b/d in September.
October exports included 1.38 million b/d through Basra, up from 1.32 million b/d in September, while exports of Kirkuk crude decreased to an average of 319,000 b/d, down from 322,000 b/d in September.
Contact Eric Watkins at [email protected].
