Iraq agrees to link Kurdish oilfields to export pipeline

Arbil: Iraq's oil minister and officials from its largely autonomous Kurdistan region agreed on Monday to link two Kurdish oilfields to the main northern export pipeline into the Turkish port of Ceyhan, the minister said.

"We have agreed to prepare and link the pipeline to the Iraqi strategic pipeline, but regarding the exporting process there are still some unresolved points which will be discussed...in coming days," Oil Minister Hussain Al Shahristani said.

He had been asked by reporters in the Kurdish capital Arbil when the Oil Ministry would grant an export licence for Kurdistan's Tawke oilfield, on which Norwegian firm DNO has the concession, and for its Shiwashuk field.

DNO shares surged on the news and last traded up 18 per cent.

Disputes between Baghdad and the Kurdistan Regional Government (KRG) have held up development of oilfields for export in Kurdistan. DNO pumps oil from Tawke but has not managed to gain a licence to export it.

Analysts said the news was an unexpected breakthrough.

"It's a big step as far as the KRG is concerned," said Mohammad Ali Zainy of the Centre for Global Energy Studies in London.

"It's a surprise given that he (Al Shahristani) was adamant these contracts were illegal.... We don't know what's going on behind the scenes."

Al Shahristani was in Arbil for talks with Kurdish officials aimed at resolving the disputes over contracts the KRG signed with foreign oil firms on its own initiative. Baghdad has said such contracts are illegal, without central government consent.