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Kurdistan’s oil exports could be suspended for several more days as officials from Kurdistan are set to return to Baghdad next week for a new round of talks on the resumption of crude exports from Kurdistan via a pipeline to the Turkish Mediterranean port of Ceyhan.
The Kurdistan Regional Government hopes that talks next week could result in the resumption of Kurdistan’s oil exports, commodity analyst Giovanni Staunovo says, quoting the head of foreign media affairs for the Kurdish government.
Kurdistan’s crude oil exports – around 400,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets – were halted late last week by the federal government of Iraq.
Last week, the International Chamber of Commerce ruled in favor of Iraq against Turkey in a dispute over crude flows from Kurdistan. Iraq had argued that Turkey shouldn’t allow Kurdish oil exports via the Iraq-Turkey pipeline and Ceyhan without approval from the federal government of Iraq.
Talks between officials from Kurdistan and from the Iraq federal government have failed in recent days.
Next week could see a breakthrough in talks, but oil companies operating in the semi-autonomous region of Kurdistan have already started to shut down oil fields as storage capacity is limited while they had been instructed to temporarily cease deliveries to the Iraq-Turkey Pipeline destined for the port of Ceyhan.
The company pumping a quarter of Kurdistan’s crude oil exports, Norway-based DNO ASA, said on Wednesday that it had started an orderly shutdown of its oil fields following the suspension of oil exports.
“It is unfortunate it has come to this given the likely impact of a continuing supply disruption on oil prices and at a fragile time in global financial markets,” DNO’s Executive Chairman Bijan Mossavar-Rahmani said.
Another operator in Kurdistan, London-listed Gulf Keystone Petroleum, said on Monday that its facilities “have storage capacity that allow continued production at a curtailed rate over the coming days after which the Company will suspend production.”
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com