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Addax set to start Kurdistan crude exports

Abu Dhabi, May 26, 2009

Oil and gas company Addax Petroleum expects to start crude oil exports from its facility in Iraq's largely autonomous Kurdistan region on Sunday, a senior company executive said.

The firm, listed in Toronto and London, expects to get access to an Iraq-Turkey oil export pipeline which it would then supply with trucks carrying crude from the Taq Taq field, Leslie Blair, managing director of Addax Petroleum-Middle East, told Reuters on the sidelines of an industry conference.

He said Iraq's Oil Minister Hussain Al-Shahristani had given his agreement.

"Sunday is the date we can access the pipeline...the minister has agreed and by Sunday we will be ready," Blair said on Monday.

The central government in Baghdad has long opposed the signing of contracts with foreign oil firms by the Kurdistan Regional Government (KRG) and withheld use of export pipelines.

The impasse has delayed for years the passing of crucial national oil and gas legislation, deterring foreign investment.

Earlier this month Baghdad said it would begin exporting oil from Kurdistan's Tawke and Taq Taq fields. But Iraq's oil ministry, out of principle, still opposes production sharing contracts that Kurds have clinched with firms like Addax and Norway's DNO International that are developing the fields.

Its refusal to recognise Kurdish deals, even as it backs Kurdish exports, brings uncertainty to the situation. Blair said the volume of the exports would be limited partly by the need to use trucks.

"We will be doing this by truck...that is why you can't go to a very large number by truck, because just the sheer logistics of moving hundreds of trucks is untenable the higher number you go."    

The Kurdish government has given Addax the green light to export 40,000 barrels per day, but the firm had the facilities in place to supply up to 60,000 bpd by truck.

"(The oil) will go to a pipeline connection which is close to the Kirkuk field, to be determined by the ministry, they will actually determine where we offload the oil."    

Developments in the energy standoff between the Kurdistan region and Baghdad are keenly watched, not least because Kurdish officials have heralded a new $8 billion plan from foreign energy firms that could supply natural gas from Kurdistan to Europe via the Nabucco pipeline.

This pipeline project is a key element in the European Union's plans to free itself from reliance for gas on Russia. But Shahristani has rejected the deal because it was done without participation from the oil ministry. - Reuters




Tags: Iraq | Addax | Kurdistan |

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