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Iraq Cancels Latest Kirkuk Crude Sale Tender

Wednesday, July 19, 2006

LONDON - Reuters

Iraq has cancelled its latest Kirkuk crude sale tender as it has failed to pump enough oil through its vulnerable pipeline to Turkey to be able to make the sales, trade sources said on Monday.

The flow through the line to the Turkish terminal of Ceyhan was still on hold after Iraq halted exports on July 7, a shipping source said.

Only 600,000 to 700,000 barrels were in storage at Ceyhan, he added.

Industry sources said that the present halt was not due to sabotage, but had no further details on the stoppage.

The tender was the fourth issued since June 19 after Iraq appeared to have stabilized flows along the line. It offered up to six million barrels of crude for loading throughout July.

State-oil marketer SOMO sold 8.6 million barrels in total in the previous three tenders.

SOMO may have to put plans to issue long-term contracts to sell Kirkuk crude on hold due to pumping problems, industry sources said.

Iraq had planned to begin selling around 300,000 barrels per day (bpd) in term contracts from Aug. 1 through to the end of the year if it could keep the pipeline flowing.

The line has been mostly paralyzed by sabotage attacks since the U.S.-led invasion of Iraq in March 2003.

An Iraq official on Sunday said exports along the line should resume soon.

Iraq relies on its main southern terminal of Basra for most of its oil exports. The terminal ships about 1.5 million bpd.

The head of Iraq's North Oil Company, Adel Qazaz, was kidnapped in Baghdad on Sunday, an Oil Ministry official said.