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Iraq trades batch of Kirkuk oil to 3 MNCs

LONDON — Iraq has sold a rare batch of Kirkuk crude to three multinationals as Baghdad’s running battle with saboteurs prevents steady flows of oil through its vital northern pipeline.

Iraq yesterday awarded a sell tender for up to three million barrels of Kirkuk from the Turkish port of Ceyhan to UK major BP, Spain’s Cepsa and France’s Total, an official from state oil marketer SOMO said.

“We’re working under severe circumstances,” he said. “The Iraq-Turkey pipeline is under constant attack by terrorists.”

The northern pipeline had a pre-war capacity of 800,000 barrels per day (bpd), but has been plagued by sabotage ever since the US-led invasion in 2003, depriving the country of much needed revenue.

SOMO has been forced to hold infrequent sell tenders only after sufficient oil has been pumped from its giant Kirkuk oilfields to the Mediterranean terminal of Ceyhan.

The previous sale in June marked the first tender for a year and boosted overall exports to 1.6 million bpd. Exports this month are expected to come in slightly below that level, but it is hoped that some Kirkuk will load before the end of August.

The latest Kirkuk tender saw BP putting in the best bid, followed by Cepsa, then Total, the Iraqi oil official said. Trading sources said the winning bids were around Dated Brent minus $7.00.

BP and Cepsa were both scheduled to lift one million barrels of Kirkuk. Total’s volume is 600,000 barrels, but the company has the option to lift up to one million barrels.

Shipping sources said about 3.6 million barrels of Kirkuk oil were in tank at Ceyhan. Turkish Tupras is due to take 600,000 barrels of that volume early next week as part of its term contract allotment.