Kurdish Oil Exports OK with Baghdad's Agreement

Iraq is keen to see oil shipped via pipeline from the northern Kurdish region but any exports must be approved by Baghdad, Deputy Prime Minister for energy Hussain al-Shahristani said, after flows on the pipeline started on Friday.

The Iraqi central government is sticking to the idea of central control of all oil exports, after Turkey and the Kurdish Regional Government (KRG) signed a multi-billion-dollar energy package in November.

In a recent meeting with Turkish officials, "we agreed it is in everybody's interest to allow exports of crude oil from any part of Iraq, including the KRG region, to the world, but this has to be done with the approval of the Iraqi government," al-Shahristani told reporters when asked about the newly completed pipeline.

Turkey's energy deals with the Kurdish north of Iraq effectively bypass the central government in Baghdad, which says independent Kurdish oil exports would be illegal.

Turkey is keen to move the process forward through a three-way mechanism including Baghdad, but the central government has for years resisted moves towards direct exports.

Exports without the agreement of Baghdad would be "a violation of Iraqi sovereignty and .. obviously the Iraqi government will have to take necessary action to protect its wealth," al-Shahristani said.

Test flows on the pipeline started on Friday, but no exports have yet been scheduled, energy sources close to the matter said.