Iraq had resumed oil exports from its northern fields to Turkey on 14 February, reopening the crucial pipeline that had been closed by sabotage since December. “We expect pumping to resume within a week,” the official said.
A Turkish shipping source said that the Ceyhan terminal on Turkey’s Mediterranean coast has been asked by Iraq to get ready. The Turkish official also said that the pipeline had been planned to resume operating to discourage further sabotage attacks. “Apparently, the plan failed,” he said.
The pipeline, which runs from the refinery at Baiji north into Turkey and to the port of Ceyhan, has been closed since December following repeated attacks by insurgents and saboteurs determined to disrupt Iraq’s reconstruction. When operational, the pipeline can pump a little over 1 million brl/d of oil, providing a crucial source of foreign currency earnings for the country. Saboteurs attacked oil and gas pipelines west of Kirkuk on 13 and 14 February.
Industry sources said that Iraq may revert to monthly sale tenders for Kirkuk crude to counter the disruption from sabotage. “Once the oil is at Ceyhan, Iraq will probably resort to selling Kirkuk by tender,” said an industry source, referring to the Turkish export outlet. “If pumping restarts at a rate of 300,000brl/d, we could see a tender in a few weeks.”
Iraq managed to line-up Kirkuk exports of about 12 million barrels from September to December, 2004, through a combination of term contract and spot market sales. But the Iraqi state oil marketer had difficulty fulfilling its contract obligations because of relentless attacks against the Iraq-Turkey pipeline. Industry sources estimate there are already 1.3 million barrels of oil stored near the giant Kirkuk fields that will be pumped once operations resume in the coming days.