Kurds to stop oil exports in month unless Baghdad pays

Under Iraq's budget, the KRG is to supply 175,000 bpd of crude for export, but the KRG halted the trade in early April, saying Baghdad owed it a backlog of payments.

The central government is required to route 50 percent of the KRG's export earnings to Kurdistan to cover producing companies' previous costs. Baghdad issued two payments in 2011, totaling $514 million; the KRG said it is owed $1.5 billion.

Crude produced in Kurdistan is fed into Iraq's Kirkuk export stream and sold onto world markets via the Turkish Mediterranean port of Ceyhan. The KRG export halt had cut Kirkuk shipments by a quarter to below 300,000 bpd.

Iraq is boosting oil sales from its southern ports following an increase in export capacity earlier this year. Adding another 100,000 bpd to northern exports would bring Iraq's overall shipments to around 2.6 million bpd, a postwar record.

Iraq's oil dispute with Kurdistan has escalated after Baghdad threatened to cancel a contract with France's Total for signing Kurdish deals and a unit of Russia's Gazprom also entered the autonomous area.

Total and Gazprom followed U.S. majors Exxon and Chevron in signing oil accords with Kurdistan.

(Editing by Anthony Barker)

[Credit: Reuters/Thaier al-Sudani] Kurdistan Regional Government Natural Resources Minister Ashti Hawrami speaks during a joint news conference with Turkish Energy Minister Taner Yildiz in Arbil, about 350 km (217 miles) north of Baghdad, May 20,2012.

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and the sideshow:

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Lesseee.
The Kurds don’t kick in the oil.
Baghdad doesn’t pay, but want to force the Kurds to keep providing oil.
The Kurds decide to secede.
Baghdad takes umbrage and sends troops.
The Turks, who don’t want an independent Kurdistan in any form, anywhere, pile on...
The Iranians share a border, too, so who knows what they’d do...

Pass the popcorn.

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