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UPDATE 1-Iraq starts exporting Kurdish oil - officials

Published 02/03/2011, 04:04 AM
Updated 02/03/2011, 04:08 AM

* Exports seen rising to 50,000 bpd in days

* Oil shipments were halted over legality of contracts

(Adds byline, comments from officials, background)

By Shamal Aqrawi

ARBIL, Iraq, Feb 3 (Reuters) - Iraq started exporting crude on Thursday from the Kurdish region's Tawke oilfield, a major step toward resolving fierce disputes between the war-torn country's majority Arabs and minority Kurds, officials said.

Shipments from the Tawke oilfield operated by Norway's DNO International and Turkey's Genel Enerji began at 10,500 barrels per day and were expected to reach 50,000 bpd in two to three days, officials at Iraq's North Oil Company said.

Exports from the semi-autonomous Kurdish region briefly flowed in 2009, but were halted when the Iraqi government in Baghdad refused to pay the companies involved. Baghdad views oil contracts signed by the Kurds with foreign firms as illegal.

The impasse over oil is part of a broader dispute over land, power and the distribution of the country's natural wealth that U.S. military officials fear could one day spark a war in Iraq.

"This morning we registered 10,500 bpd of Kurdish exports from the Tawke field," said one North Oil Company official, who asked not to be identified because he was not authorised to speak about the matter.

"This is the first shipment of crude officially registered for the Kurdish authorities," the official said.

A senior North Oil Company, who also asked not to be identified, said exports from Tawke to the Turkish port of Ceyhan were expected to rise to 50,000 barrels per day in the next two to three days.

Shares of DNO rose 3 percent after the company said it had started test production for exports from Tawke.

Once exports fully resume, shipments from Tawke and a second field, Taq Taq, operated by Chinese company Sinopec and Genel Enerji, should reach 100,000 bpd. For a FACTBOX on companies involved in the region, click on.

Exports from the region were stopped over the dispute between Iraqi Kurdistan and the Arab-led government in Baghdad over the legality of contracts awarded by the Kurds to foreign companies.

Earlier this year, the two sides said they had reached a deal. Under the agreement, first proposed by Baghdad last year, the Iraqi government will pay the companies for their exploration and development costs but not cover their profits. (Additional reporting by Ahmed Rasheed in Baghdad and by Oslo Newsroom; Writing by Michael Christie and Patrick Markey; Editing by James Jukwey)

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