Iraq has locked in five million barrels per month of Kirkuk oil supply contracts and aims to sell another five million in monthly spot sales as sabotage creates uncertainty over northern crude supplies, a top Iraqi oil official said on Sunday.
Iraq's State Oil Marketing Organisation is working first to ensure it has enough oil at the Turkish export outlet of Ceyhan to honour Kirkuk term commitments through the end of the year, SOMO marketing chief Kadhim Razouki told reporters on the sidelines of an IBC energy conference.
France's Total and Spain's Cepsa and Repsol have each signed up to lift one million barrels per month of Kirkuk, while Turkish refiner Tupras has secured a contract for two million barrels per month, he said.
Northern crude exports have been erratic since the US-led invasion last year due to repeated sabotage along the route which runs to Ceyhan storage - capable of holding 8.5 million barrels. Iraq is now exporting 250,000 barrels per day (bpd) of oil to Turkey.
If saboteurs do not disrupt pumping from Iraq's Kirkuk oilfields to Ceyhan tanks, SOMO will have the flexibility to sell up to five million barrels of Kirkuk per month.
"We have to play it carefully," said Razouki. "If pumping continues and things are running well, then we can sell some Kirkuk on a spot basis."
Along with a resumption of Kirkuk exports, SOMO is setting a monthly official selling price (OSP) for its northern oil as it does for its southern Basra Light crude sales.
"This will also help facilitate spot sales," said Razouki. "We can agree a sale in five minutes once we've got the OSP in place."
SOMO has set an OSP for October Kirkuk to Europe at Dated Brent -$6.70 versus -$5.75 for the second and third decades of September.
Iraq so far has managed to sell spot Kirkuk to UK major BP, Portugal's Petrogal and Swiss-based trader Vitol's North Atlantic refining unit, said Razouki.
The SOMO official said sales of Basra Light crude oil from the Gulf, less prone to disruption, have been running near capacity at 80,000 barrels per hour, or 1.9 million barrels per day (bpd).
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