A file photograph dated 21 March 2011 shows Iraqi soldiers guarding the second refinery for crude oil in Baiji refinery north of Baghdad. Damage to the facility, which was producing around 170,000 bpd before it was closed due to the violence, could take more than a year to repair, according to the Kurdistan Regional Government’s Natural Resources Minister Ashti Hawrami.

Reuters/Istanbul

Oil output in Iraq’s Kirkuk has slumped to 30,000 bpd since June, 90% down on earlier this year, and a federal pipeline to the Turkish port of Ceyhan may be out of action for over a year due to sabotage, Kirkuk’s governor said yesterday.

Islamic State (IS) fighters have seized swathes of territory in lightning offensives in the arid but oil-rich north of the country, and have repeatedly attacked oil installations.

In February this year Iraqi oil production hit record highs of 2.8mn bpd nationwide, with an estimated 300,000 bpd coming from the northern province of Kirkuk.

“There have been no exports since March and the only production in Kirkuk has been the 30,000 bpd to a small refinery and enough gas to get our electrical grid going since June 8,” Najmaldin Karim, Kirkuk’s governor told reporters at an industry conference in Istanbul.

“I don’t think there will be exports from Kirkuk to the Ceyhan pipeline any time soon. It has been sabotaged continuously and to get it all back would take at least a year or more,” he added.

The federal pipeline from Kirkuk to Ceyhan has a capacity of 1.6mn bpd but has for years been operating at around a third of that, and recently even less, a Turkish official said.

Damage to the pipeline is a further blow to the beleaguered authorities in Baghdad, but will not affect the Kurdistan Regional Government (KRG), which began exporting oil in May via its own pipeline, which links to the federal Iraqi pipeline at Turkey’s border, and has not been sabotaged.

Kurdistan’s oil production is expected to rise to 400,000 bpd in 2014 from 250,000 bpd, according to Tony Hayward, chief executive of Anglo-Turkish Genel Energy, the region’s largest producer.

Baghdad has repeatedly expressed its anger at the KRG’s agreement to export oil independently through Turkey and has launched a series of legal cases to try to halt its sale.

But the Iraqi authorities have been largely powerless to stop the flow of oil through Ceyhan, which has now exceeded 10mn barrels since May, according to Turkish Energy Minister Taner Yildiz. Some $188mn had been paid into Turkish Halkbank by the Kurdish authorities, Yildiz said yesterday in the Turkish capital, Ankara.

Karim also suggested Kirkuk’s oil could be channelled through the KRG pipeline, if both sides agree. “We Kirkuk citizens, we want the oil production to continue and we can help to bring the two sides (Baghdad and Arbil) together,” he said. During recent fighting, the IS has repeatedly tried to seize and hold Baiji Refinery, the largest in Kirkuk.

Damage to the facility, which was producing around 170,000 bpd before it was closed due to the violence, could take more than a year to repair, according to the Kurdistan Regional Government’s (KRG) Natural Resources Minister Ashti Hawrami, who was speaking at the same conference.

Greek shipping firm sued for ‘illegal’ Kurdish oil exports

Iraq has filed a case against Greek shipping company Marine Management Services (MMS) for its role in the “illegal” export of crude from the autonomous Kurdistan region, the oil ministry in Baghdad said in a statement on yesterday.

The lawsuit is the latest move by Baghdad to deter customers and thwart independent exports of crude from Kurdistan. The federal government claims sole authority to manage sales of all the oil in Iraq.

The statement said MMS operated five vessels that had transported crude oil on behalf of the Kurdistan Regional Government (KRG) from a Turkish port.

“MMS is liable for damages of at least $318mn, and possibly significantly more, as a result of its willing and active participation in the KRG’s illegal crude oil export scheme,” the statement read.

Neither Kurdish officials nor the Athens-based shipping company were immediately available for comment.

The oil ministry said MMS had declared false destinations for its tankers, turned off its ships’ tracking systems to avoid detection and undertaken “dangerous” nighttime ship-to-ship transfers of crude oil on the high seas.

One of MMS’s tankers, the United Kalavrvta, has been anchored off the coast of Texas since July laden with $100mn worth of crude, with Baghdad threatening to sue anyone who buys the oil and asking a US court to seize the vessel’s contents. A Texas court has said it lacks jurisdiction because the tanker is so far offshore.