Iraq Plans "Severe Measures" over Kurdish Oil Exports

Iraq's oil minister on Monday condemned the export of pipeline crude from Iraqi Kurdistan and threatened the region and Turkey, its point of export, with severe measures.

"What happened in my view was the biggest mistake that has been made by the Kurds and the Turks...and the Iraqi government will take severe measures," Abdul Kareem Luaibi told a news briefing.

He repeated that Baghdad would sue the Turkish government and Turkish pipeline state owned operator Botas for facilitating the sale of crude from the Kurdish region without the central government's consent. The Iraqi government was in the process informing the United Nations about Ankara's role in the shipment, he added.

"We have no choice but to go to arbitration and they (Turkish government) have been informed," Luaibi said.

The semi-autonomous northern Kurdish region has not been exporting any crude through the Baghdad-controlled Iraq-Turkey pipeline since the end of 2012.

The oil minister said he expects production this year to average 3.7 million barrels per day without any output from the Kurdish region. Exports would average 3 million bpd in 2014, he added.

Baghdad has signed a series of deals to develop its giant southern oilfields with major oil companies - including BP which is leading the project at Rumaila, ExxonMobil is in charge of West Qurna 1, while Royal Dutch Shell (RYDAF) is operating Majnoon.

Luaibi said he expected finalising amendements to the exisiting contracts "within days" to lower the previously estimated output capacity from 9 million bpd to 8.4 million bpd after 2018 and extending the life of the deals beyond 20 years.

(By Rania El Gamal; Additional reporting by Peg Mackey, editing by William Hardy)