More good news for Kurdistan focussed investors as oil exports begin via Turkey. This really is a massive milestone as both countries are far from being best of buddies. That said, in light of the US administration’s efforts to sanction Iran and halt all exports of Iranian oil, the exports to Turkey should ensure that no trucks enter Iran which appears to have been the case in the past.
The US super major Exxon moved into Kurdistan in sept 2011 bolstering the regions outlook and political strength. Additional IOC’s / super majors are expected to follow suit.
Kurdistan ‘begins oil exports to Turkey’
Kurdistan has begun trucking exports of crude oil across the border to Turkey, the Telegraph understands, in a politically controversial move likely to boost oil companies in the semi-autonomous Iraqi region.
By Emily Gosden, 9:00PM BST 05 Jul 2012
Kurdistan is locked in a long-running dispute with Baghdad over who should control the region’s vast oil reserves.
In April the semi-autonomous region halted exports through infrastructure controlled by the central Iraqi government – accusing Baghdad of not paying the foreign oil companies working in the region.
These include London-listed Genel Energy, the company run by former BP chief executive Tony Hayward. Genel and other producers such as Norway’s DNO are reliant on the domestic market, limiting both demand and price.
Other companies active in the region include Gulf Keystone Petroleum, which has made significant discoveries and plans to ramp up production from current low levels.
In May, Kurdistan and Turkey agreed they would press ahead with building an export pipeline which could be operational next year, bypassing Iraq’s control.
But two sources told the Telegraph that trucks had begun transporting crude oil from Kurdistan over the border to Turkey on Thursday.
Malcolm Graham-Wood, oil analyst at VSA Capital, said the move would be significant as it would show “serious commitment” between Kurdistan and Turkey.
“We didn’t expect this to happen so soon,” he said. “The opening of the border massively increases the scope for Kurdistan to sell crude.”