Tehran, Baghdad Negotiating Date for Kirkuk Crude Exports

The head of Iraq’s state oil marketer SOMO is currently holding talks in Iran to determine a start date for oil exports from Iraq’s Kirkuk oilfields, Iraqi Oil Minister Jabar al-Luaibi said on Wednesday.

An oil official told Reuters last week that some Kirkuk crude would be shipped “in the near future” by trucks to Iran’s Kermanshah refinery, at a rate of 30,000 barrels per day, Reuters reported.

The statements come shortly after Luaibi and his Iranian counterpart Bijan Namdar Zanganeh discussed plans to swap Kirkuk crude in a meeting of OPEC countries in Vienna, Austria, last month.

Plans call for transporting crude oil from Kirkuk in the north of Iraq to a refinery in the western Iranian province of Kermanshah with equal amounts to be shipped to customers from the Persian Gulf terminals.

According to Zanganeh, the first phase of the swap deal will involve trucking crude from Kirkuk field, followed by the construction of a pipeline in the second phase.

Trucking is intended to start at 15,000 barrels per day and cap at 30,000 bpd, but Luaibi said it could increase to 60,000 bpd. The pipeline, which will stretch for about 200 kilometers, is planned to be financed by both governments and become operational in two years.

Iraq has been in talks with Iran for a year over building an export pipeline and the trucking deal could either be an easy win to monetize that stranded crude or a stopgap measure before the pipeline is built.