Turkey’s Tüpraş to buy crude from KRG sold by Baghdad

Turkey’s sole oil refiner Tüpraş will begin purchasing crude oil from northern Iraq shipped by pipeline and sold by the Iraqi state’s Oil Marketing Company (SOMO), Deputy General Manager Hasan Tan said on Nov. 21.

The oil will be transported to the Turkish Mediterranean port town of Ceyhan, Tan told reporters on the sidelines of an energy conference.

The announcement comes a week after the government of Iraq and the semi-autonomous region of Kurdistan reached a deal to settle a long-running dispute over oil-revenue sharing in which Kurds will give Baghdad half of its overall shipments in exchange for civil servants’ salaries.

Under the agreement reached last week, Kurdish authorities committed to pump 150,000 barrels per day of oil - around half their overall shipments - to Iraqi government export  tanks in the Turkish port of Ceyhan.

Baghdad agreed to pay $500 million towards Kurdish salaries.

Iraqi Finance Minister Hoshiyar Zebari said on Nov. 19 that the Kurdish Regional Government began pumping oil to State Oil Marketing Organization (SOMO) tanks at Ceyhan on Nov. 18 and the $500 million was transferred on Nov. 19.

“This payment will be followed by other payments,” Zebari told a news conference in Baghdad.
Baghdad cut the Kurds’ share of the budget to punish them for exporting oil without its consent. The region was plunged into financial crisis, but has continued pumping oil through its independent pipeline to Turkey, and exports recently increased to around 300,000 bpd.

Iraqi leaders are under pressure to bury differences in order to counter Islamic State militants who control substantial parts of Iraq and neighboring Syria.