Kurds Sell First Oil Internationally, despite Baghdad Warning

The semi-autonomous region of Kurdistan has sold the first crude oil cargo on the international market despite a warning from the central government in Baghdad, the Patriotic Union of Kurdistan, or PUK, party said on its website Saturday. 

The PUK, which is chaired by Iraqi President Jalal Talabani, who is currently receiving medical treatment in Germany, said that the sold cargo will be shipped by trucks from Taq Taq oil field operated by the Anglo-Turkish joint venture Genel Energy plc (GENL.LN) to the Turkish territory. 

A German-based company called Select Energy won the tender, it said. 

The website gave no details on the size of the sold shipment or the price, but people familiar with the matter in Kurdistan said that some 30,000 tons of crude oil were sold to Select Energy for delivery in April. 

The central government has warned Genel Energy and other companies that it would take legal action against firms which sell crude oil from the Kurdish region without the approval of the central government. 

Baghdad and the Kurds are at loggerheads over who should control the oil wealth in northern Iraq. The Kurdistan Regional Government has been shipping oil by trucks to Turkey in defiance of Baghdad. 

The KRG suspended since December crude oil exports of nearly 100,000 barrels a day via a Baghdad-controlled export pipeline to Turkey claiming then that the central government hadn't paid enough money for contracting companies in Kurdistan. 

Iraq's oil minister Abdul Kareem Luaiby last week blamed the KRG on the loss of nearly $2.4 billion for failing to export oil via the government pipeline in the first three months of 2013. 

In the country's 2013 budget the central government allocated only $650 million to pay these companies, while the Kurds proposed a sum of $3.5 billion. 

The Kurdish government further annoyed Baghdad when it started unilateral exports of more than 15,000 barrels a day of oil and natural gas condensate in trucks to Turkey at the beginning of January. It has pledged to increase these exports gradually and even plans to set up its own pipeline, bypassing the Baghdad-controlled export route.


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