Iraq Presses Kurdistan Producers to Hand Crude to SOMO Under Export Deal

Iraq says international oil companies operating in Kurdistan remain obligated to deliver crude to SOMO under a September export deal, raising fresh questions about control of pipeline flows and export authority.

(Reuters) — Iraq’s state oil marketer SOMO said on Dec. 21 international producers in Kurdistan were still obliged to send it their crude under a September export agreement, after Norway's DNO said it would not take part in the agreement.

SOMO said its statement was in response to a Reuters report in September which quoted DNO as saying it would sell directly to the Kurdish region and had no immediate plans to ship through the Iraq-Turkey pipeline.

The September deal between Iraq's oil ministry, Kurdistan's ministry of natural resources and producing companies stipulated that SOMO will export crude from Kurdish oil fields through the Turkey pipeline.

At the time, DNO - the largest international oil producer active in Kurdistan - welcomed the deal but did not sign it, saying it wanted more clarity on how outstanding debts would be paid.

It said it would continue to sell directly to the semi-autonomous region of Kurdistan.

SOMO said on Dec. 21 the Kurdistan ministry of natural resources had reaffirmed its commitment to the deal "under which all international companies engaged in extraction and production in the region's fields are required to deliver the quantities of crude oil they produce in the region to SOMO, except for the quantities allocated for local consumption in the region."