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| Iraq |
| Iraq halts oil shipments to South Korea |
| 2008-01-30 |
| This article gives some insight in the on-going dance between Irbil and Baghdad. Iraq has provisionally suspended crude oil exports to Korea’s top refiner, SK Energy Company, to protest an exploration deal between Korean companies, including SK, and the Kurdish regional government. SK Energy confirmed that it has not received any crude shipments from Iraq this month after Iraq’s state-run oil company, SOMO, did not renew its contract to export up to 90,000 barrels per day to the Korean firm on Jan. 1. The contract had been renewed every six months since July, 2004. Last month, Iraq warned Korea that it would suspend crude oil exports if Korean companies continued with the exploration project in the Bazian oil field in Kurdish-controlled northern Iraq. Baghdad argues that the deal, signed with the semi-autonomous Kurdish government, is illegal. “We don’t think this is an end of the contract with SOMO,” an SK Energy official said on the condition of anonymity. “We are in negotiations. “And we also have no plan to withdraw from the exploration project,” the official added. “SK Energy is the only firm that imports crude from SOMO and at the same time is participating in the exploration project. We are making efforts to maintain both deals.” The Korean consortium, which also includes the state-run Korea National Oil Corporation, GS Holdings Corporation and UI Energy, signed an agreement in November to take a 38 percent stake in the Bazian field, which is estimated to hold 500 million barrels of crude oil. Iraq’s move results from the friction between the central government and the Kurdish authorities over control of new mining areas. Iraq accounted for about 5 percent of Korea’s total crude imports last year, according to Ministry of Commerce, Industry and Energy data. The ministry also confirmed the suspension of the oil shipments to SK Energy yesterday but had no comment. Iraq also represented 5 percent of SK Energy’s crude imports, as the company imported 20.3 million barrels of crude from the country last year. The Korean company said it can source imports from elsewhere, including the Singapore oil spot market. |
| Posted by:mrp |