Oil exports from Kurdistan may be halted for a few more days even though Kurdish representatives are scheduled to meet with Baghdad officials again the following week to discuss the possibility of restarting crude shipments from Kurdistan via a pipeline to the Turkish Mediterranean port of Ceyhan.
According to Giovanni Staunovo, a commodity analyst, the head of foreign media relations for the Kurdish government expressed the hope of the Kurdistan Regional Government that talks scheduled for next week could lead to the restart of Kurdistan’s oil exports.
Kurdistan’s crude oil exports, which were being sent through an Iraqi-Turkish pipeline to Ceyhan before being transported on tankers to foreign markets, were stopped by the Iraqi central government late last week.
In a disagreement over crude flows from Kurdistan, the International Chamber of Commerce last week decided in favor of Iraq against Turkey. Iraq had claimed that without permission from the Iraqi federal government, Turkey shouldn’t permit Kurdish oil exports through the Iraq-Turkey pipeline and Ceyhan.
In recent days, negotiations between Kurdish and Iraqi central government representatives failed.
Although a breakthrough in negotiations may occur next week, oil companies operating in the semi-autonomous region of Kurdistan have already begun to shut down oil fields due to limited storage space. They had also been ordered to temporarily stop supplying oil through the Iraq-Turkey Pipeline to the port of Ceyhan.
The Norwegian-based DNO ASA firm, which pumps a quarter of Kurdistan’s crude oil exports, announced on Wednesday that it had begun a planned shutdown of its oil fields in response to the suspension of oil exports.
Bijan Mossavar-Rahmani, executive chairman of DNO, said: “It is unfortunate that it has come to this given the likely impact of a continuing supply disruption on oil prices and at a precarious time in global financial markets.”
The facilities of Gulf Keystone Petroleum, a company with a London stock exchange listing and another operator in Kurdistan, “have storage capacity that allow continued production at a curtailed rate over the coming days after which the Company will suspend production,” the company stated on Monday.
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