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Iraq Says Will Export Oil From Kurdish Fields

An oil refinery in Sulaimaniya, in semi-autonomous Kurdistan
BAGHDAD/SULAIMANIYA, Iraq (Reuters) -- The Iraqi Oil Ministry will begin exporting oil from fields in semi-autonomous Kurdistan, an official said on May 10, heralding a breakthrough in a bitter feud over control of Iraq's oil wealth.

Oil Ministry spokesman Asim Jihad told Reuters that once fields in the northern Kurdish region are connected to the national export pipelines, "the Iraqi Oil Ministry will start exporting crude extracted from some oil fields in Kurdistan."

"These quantities will increase Iraqi export capacity, and all revenues will go to state coffers. The ministry supports any steps to increase Iraqi output and export levels," he said, but declined to comment on when the exports would begin.

Jihad's comments came after the Kurdish natural resources minister said he had received a green light from Baghdad to begin the first official exports from Kurdish fields.

"Today I received an email message from the Iraqi Oil Ministry sending us their approval for the Kurdish government to export oil through the Iraqi pipelines to Ceyhan,” in Turkey, Ashti Hawrami told Reuters by telephone from outside Iraq.

On May 8, the Kurdish government had announced that oil exports from its Tawke field would begin on June 1, saying they would start at an initial rate of 60,000 barrels per day (bpd).

It also said that 40,000 bpd of exports from another field, Taq Taq, would begin, travelling by truck and through an Iraq-Turkey export pipeline.

But there was no immediate confirmation from the Shi'ite-Arab led government in Baghdad, which has long called contracts Kurds have signed with foreign oil firms illegal. On May 8, Jihad denied that permission had been granted for the Kurdish exports.

The oil feud is part of a larger dispute between minority Kurds and majority Arabs over resources, land, and power that has held up national energy legislation and cast a shadow over a country struggling to emerge from six years of bloodshed.

Oil Minister Hussain al-Shahristani is facing increasing pressure to increase sluggish oil output, now around 2.3 million-2.4 million bpd, and turn around an industry in dire need of major investment after decades of sanctions, neglect, and war.

Jihad said on May 10 that there was a joint technical team, including Kurdish and Arab officials, that would conclude preparations for the launch of Kurdish oil exports.

Until now Baghdad's refusal to open the national pipeline to Kurdish oil exports has meant oil from Kurdistan, largely independent since 1991, has gone only to supply a small Kurdish market. Small amounts have been smuggled abroad.

Kurdish officials, who estimate reserves of at least 40 billion-45 billion barrels in the area now recognized as Kurdistan, have meanwhile struck deals with firms including Toronto-listed Addax Petroleum and Norway's DNO International, which is developing Tawke.