Kirkuk oil exports unclear, but promising

KIRKUK, Iraq, Jan. 7 (UPI) -- There are mixed reports on Iraq's resumption of oil exports to Turkey, which were shut down last week because of full storage tanks, not security impediments.

The Iraq State Oil Marketing Organization predicts 400,000 barrels per day of exports starting this month, as Iraq starts setting prices for its Kirkuk oil with more consistent exports through the pipeline to Ceyhan, Turkey.

The export shutdown last week was "due to the fact that Ceyhan's oil reservoirs are totally full with Iraqi crude oil," a source from the North Oil Co. told the Voices of Iraq news agency.

The source added Iraq exports through the twin pipelines north was between 150,000 to 200,000 bpd, below the 300,000 that others have estimated.

Iraq Directory, however, reports the pipeline has restarted at about 72,000 bpd, after the storage tanks capped at 6.8 million barrels.

Regardless, the stoppage appears to be more like growing pains than typical of past disruptions. The pipelines from Kirkuk to Baiji as well as to Ceyhan have been mostly offline since 2003 because of insurgent attacks.

Repairs and a new security plan instituted about six months ago appear to be working, with total oil production up from an average of 2 million bpd to about 2.4 million, largely due to increased northern activity.

The Middle East Economic Survey reports a "security unit" guarding the line was fired and a new pipeline from Kirkuk to al-Fatah started.

SOMO also has begun setting prices for oil sales in the Ceyhan port, MEES reports: European buyers will pay $3.75 below the Brent price and U.S. customers $6.00 below the West Texas Intermediate price, for January. There are also discounts for those who load the oil between Jan. 1 and 17.

Shell, BP, Total, Tupras of Turkey, Cepsa of Spain and Repsol-YPF have signed on as term buyers of Kirkuk oil.

Meanwhile, SOMO plans to award a tender, or tenders, for 6 million barrels.