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Baghdad, Arbil close to a deal over oil dispute - Genel

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By: Humeyra Pamuk

Reuters | Thursday, 6 Feb 2014 | 7:18 AM ET


* Progress made between Arbil, Baghdad over oil row

* Issues narrowed down to three, Genel Energy says

* Companies operating in Kurdistan owed 50 mln bbls worth of oil money


ISTANBUL, Feb 6 (Reuters) - Iraqi Kurdistan and the central government in Baghdad are close to resolving a long-standing dispute over the sharing of oil revenues, said the president of Genel Energy, which operates in the region.


The Kurdistan Regional Government (KRG) and Turkey signed in November a package of energy deals providing for exports of the semi-autonomous regions' rich hydrocarbon reserves abroad without having to get clearance from the central government.


An infuriated Baghdad, concerned about what it saw as a move towards the region's independence, threatened to sue the companies that lift Kurdish oil via the KRG pipeline.


While fiery statements between Arbil and Baghdad escalated, the talks between the two sides have also continued. Mehmet Sepil, the president of Anglo-Turkish firm Genel Energy who has knowledge of the talks, said he saw a deal approaching.


"We have never been this close to a deal," he told Reuters in an interview. "The issues that caused an impasse have been identified. There's been quite a bit of progress made."


The central government insists it has the sole right to export Iraqi resources, including those from the northern Kurdish region, which gained de facto autonomy after U.S.-led forces defeated Saddam Hussein in 1991.


The KRG says its right to exploit and export reserves under its soil is enshrined in Iraq's federal constitution, which was drawn up following the U.S.-led invasion in 2003. The region has passed its own hydrocarbons legislation.


Failure to reach an agreement could deter international oil companies from lifting Kurdish crude. Genel, one of the first companies to export oil from Kurdistan, stands to benefit from a resolution of the dispute.


Hussain al-Shahristani, Iraq's deputy prime minister for energy often known by his feisty statements, said on Feb. 1 that 'some progress' had been made in talks and that a solution could be found soon.


One official from the central government said, however, that the Kurds were still insisting on handling exports through its own marketing company and that Baghdad strongly objected. He did not see that a breakthrough in the talks was imminent.




Sepil said that according to the latest update he has on the talks, the hurdles have been narrowed down. "There are three issues now that need to be tackled."


He said those sticking points were whether the oil sales will be carried out by Baghdad's oil market company or Arbil's; the choice of bank account in which the revenues will be deposited; and the oil payments owed to companies operating in Kurdistan.


Baghdad has agreed to pay 17 percent of total revenues to the Kurds, Sepil said, based on the Iraqi constitution. Each side will then pay their own contractors, which would eliminate the discussion on the legality of the Kurdish contracts.


Previously, Baghdad paid contractors for its southern fields first from the common revenues and then allocated the Kurds' share. The region then had to pay its own contractors, which meant in the end that its share of the total only was around 10 percent.


The Kurds have set up the Kurdistan Oil Marketing Company (KOMO), which they insist should be authorized to carry out oil sales. They say they welcome officials from the central government's State Oil Marketing Corporation (SOMO) to inspect the process.


Sepil said a possible structure that would include representatives of both companies is now being discussed and that a joint operation between the two might be possible.


"The trickier issue is the bank account. Baghdad wants the revenues to be deposited in the Development Fund of Iraq (DFI) instead of a Turkish state bank," Sepil said.


DFI was created in 2003 under a resolution from the United Nations Security Council to receives revenues from Iraqi oil and gas sales, which are used in part for the its reconstruction efforts.


Last but not least, the outstanding oil payments to companies operating in Iraqi Kurdistan are a major issue that needs to be ironed out, Sepil said.


Companies operating in Kurdistan have stopped exporting through the federal pipeline after not being able to receive their full contracted entitlement from Baghdad. The Kurds did not have sufficient revenue out of their share to make up for the difference.


"The total amount owed to the companies from past exports is around 50 million barrels worth of oil money," Sepil said. "We don't want to keep exporting into a black hole. We are listed companies, we have shareholders. We can't just forget about this money," he said.


While the talks have continued between Arbil and Baghdad, the Kurds have started to ship oil independently via the new KRG pipeline into Turkey's Mediterranean port of Ceyhan, which links with the Kirkuk-Ceyhan pipeline at the border.


This oil has not yet been sold while the dispute with Baghdad has been unresolved, but companies expect to get their contracted share of those eventual revenues.


So far close to 500,000 barrels of crude oil have already been stored at Ceyhan, Sepil said, or one fifth of a total of 2.5 million barrels of storage that Turkey's state pipeline operator BOTAS has allocated for Kurdish oil.


The KRG had announced that it would open a tender to sell its oil at the end of January but that has not materialised.


"Surely that 500,000 barrels could be tendered. Much smaller amounts are being trucked, why not sell that parcel? But I think now is the time to wait for the diplomacy to bear fruit," Sepil said.


(With reporting by Ahmed Rasheed in Baghdad; Editing by Daren Butler and Jane Baird)

© 2014

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one more..

'Ganl Energy': Baghdad and Erbil from approaching agreement on the dispute over Kurdistan oil
FEBRUARY 6, 2014

Istanbul (Reuters) - Mohammad For, Prime Inc. 'Ganl Energy' British Turkish operating in the Kurdistan region of Iraq, the region and the central government in Baghdad are close to resolving a dispute long-term on the sharing of oil revenues. 
was the KRG and Turkey have signed a series of agreements on energy November allows the export of oil and gas from the region's semi-autonomous abroad without the permission of the central government. 
threatened to Baghdad to sue companies that pump oil Kurdistan through the pipeline that duration Government of the Territory, as you feel the Iraqi authorities are concerned about what it considers Khtohfa the direction of independence for the region. 
Despite the escalating war of words between Erbil and Baghdad also continued talks between the two sides.Said Mohamed For familiar with the talks, an agreement that he sees on the horizon. 
said in an interview 'We did not at any time before the close of this limit is the conclusion of an agreement ... was to identify the issues that caused the crisis.Progress has been significant progress'. 
insists the central government as the sole owner of the right to export Iraqi resources, including the resources of the Kurdistan region in the north of the country. 
in contrast, says the Kurdistan Regional Government that the right to exploit and export reserves the territory stipulated in the constitution of the Federal drawn up after invasion led by the United States to the country in 2003. He acknowledged the territory legislation of its own on oil and gas. 
was 'Ganl Energy' and one of the first companies that export oil from Kurdistan will benefit from resolving the dispute between Baghdad and the region. 
said Hussein al-Shahristani, Iraqi Deputy Prime Minister for Energy, on the first of February that it has been made ​​' Some progress' in the talks, and the solution can be found soon. 
Nevertheless, said an official in the central government that the Kurds still insist on dealing with exports through the marketing company for the region, which is strongly rejected by Baghdad. Official did not expect an imminent breakthrough in the talks. 
, but for Muhammad said that differences shrunk according to the latest developments briefed them about the talks. He said 'there are three issues that now need to be resolved'. 
stated that these thorny issues is whether the Iraqi Oil Marketing Company (SOMO) or those of the region that will deal with the sales and the selection of the bank account the deposit of the revenue, as well as payments of oil owed ​​to the companies operating in Kurdistan. 
said for that Baghdad had agreed to pay 17 percent of the total revenue of the Kurds under the Iraqi constitution. After that each party will pay the outstanding payments to companies that contract with them, which would end the debate 'about the legality of the Kurdish contracts. 
Previously, Baghdad pay dues of companies operating in the fields of South First Joint Revenue, then graduated share Kurds. After that the region had to pay dues of companies that contract with them, which means the arrival of its share of total revenue to about ten percent only. 
foundations and Kurds Marketing Organization of Petroleum in Kurdistan (Como) that insist on the need to mandate the implementation of the oil sales. The Kurds say they would welcome the arrival of any officials of the Oil Marketing Company (SOMO) of the central government to monitor the process. 
said for that there is a debate is underway regarding the establishment of an entity comprised of representatives of the two companies, and is likely to be a joint work between the two sides. 
added 'case harder is the account banking. Baghdad is you want to deposit revenues in the Development Fund for Iraq, rather than deposited in the Bank of Turkish government. ' 
and established the Development Fund for Iraq in 2003 by a resolution of the UN Security Council to receive sales revenue of Iraqi oil and gas, which is used in part to the efforts of re 'reconstruction' of the country. 
noted for that the payments owed ​​to the existing oil companies operating in the Kurdistan region is a major problem to be solved. He said 'The total amount owed ​​to the companies for exports prior to the equivalent value of about 50 million barrels'.

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now this is how we know we are close to HCL.  Genel coming out with a release speaks volumes.  if this were the typical "in the coming days" article from a mp, i wouldn't have spent 2 seconds on the article.  when Rothchild speaks, he gets my attention.  


i think good news will be coming out soon.  and this "soon" is a real "soon" :)

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Bump this up with one more...

Iraq, Kurdistan region close to ending oil dispute
[14:18] 14/Feb/07 


PNA - Iraq’s federal government and Kurdistan Region are close to reaching an agreement to end their dispute over Erbil’s crude exports, says Genel Energy which operates in the region. 


Mehmet Sepil, the Anglo-Turkish Genel Energy company’s president, who was familiar with the negotiations between Baghdad and Erbil, told Reuters that he saw an agreement over the sharing of oil revenues approaching.

“We have never been this close to a deal,” said Sepil, adding, “The issues that caused an impasse have been identified. There’s been quite a bit of progress made.”

Kurdistan Regional Government (KRG) and Turkey have recently signed a multi-billion-dollar energy package. Under the deal, Kurdistan’s oil can reach Turkey and the global markets via the Mediterranean Sea.

Despite the firey statements exchanged between Baghdad and Erbil over the Kudistan region’s crude exports in the past months, talks between the two sides have continued.

On February 1, Iraq’s Deputy Prime Minister for Energy Affairs Hussain al-Shahristani said some progress had been made in Baghdad-Erbil negotiations, adding a solution could be found soon.

Shahristani also said in January that his country “considers the export of oil through its international borders without government approval as a violation.”

Iraq’s Prime Minister Nouri al-Maliki has described Erbil’s crude exports to Turkey as a “constitutional violation” which the Arab country would “never allow, not for the Kurdistan region, nor for the Turkish government.”

Edited by yota691
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Add this...seems this could be some of the finishing touches...

Iraqi Parliament speaker in bid for ‘joint Iraq decision’ on oil exports to Turkey




Iraqi Parliament Speaker Osama al-Nujaifi shakes hands with Turkish Foreign Minister Ahmet Davutoğlu in Ankara, Feb 5. AA photo

Iraqi Parliament Speaker Osama al-Nujaifi has underlined the importance of reaching a joint decision by the federal government in Baghdad and the Iraqi Kurdistan Regional Government (KRG) on the controversial issue of planned pipe oil exports to Turkey.

Al-Nujaifi described the aim of his visit as being to normalize bilateral relations between the two neighbors, adding that “he had succeeded in bringing the views of the two countries closer to each other.”

“The agreements on the issue of oil are as yet at their first stages. The absence of a final resolution on this issue and having no agreement made in Iraq will embarrass approval of the general budget in Parliament,” he was quoted as saying in an interview with Anadolu Agency posted late on Feb. 5, noting that approval of the general budget had already been much delayed.

“We need fast steps to be taken on this issue,” said al-Nujaifi, who earlier in the day held separate talks with both Turkish Prime Minister Recep Tayyip Erdoğan and Foreign Minister Ahmet Davutoğlu.

“I guess the views of the parties are very close to each other. The oil agreement has not yet been finalized but there are predictions about this. I’m trying to help too. It will be right to have a decision made by Iraq. I believe that an ‘Iraq decision’ arising from an agreement between Iraqi Kurdistan and Baghdad will be appropriate. Turkish officials also conveyed that they will not impede if an agreement between the KRG and Baghdad is struck, and said they would support it,” al-Nujaifi said.

Meanwhile, Davutoğlu initiated a telephone conversation with his Iraqi counterpart, Hoshyar Zebari, in order to extend condolences to him on the latest terror attacks in the neighboring country, diplomatic sources told Anadolu late on Feb. 5.

As of Feb. 2, the Kurdistan Alliance in the Iraqi Parliament confirmed that progress had been made in the talks between the federal government and KRG regarding the export of Kurdish oil.

Last month, Iraqi Prime Minister Nouri al-Maliki threatened to cut central government funding for the KRG if the Kurds pursued a drive to pipe oil exports to Turkey without Baghdad’s approval.

In the following days, al-Nujaifi had to suspend a parliamentary session due to the lack of quorum after the withdrawal of Kurdistan Alliance before the presentation of the budget law.


Read more:‘joint-iraq-decision’-on-oil-exports-to-turkey/#ixzz2sdzvkPZo

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I don't know about the rest of you that have been staring at this lovely website for YEARS, but this thread has just made my week!  Some of my other investments are waivering, but the IQD is begining to look fun again!  GO RV...SOON!@!

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