Kurds start oil exports from northern Iraq

The Kurds hope to start pumping up to 60,000bpd from Tawke oil field

Iraq's self-ruled Kurdish region has started exporting crude oil to foreign markets for the first time.

Companies chosen by the Kurdistan Regional Government will pump up to 90,000-100,000 barrels per day from two northern oilfields to Turkey.

The Baghdad government has allowed its pipeline to be used, in a deal that could begin resolving internal disputes over Iraq's substantial oil wealth.

The revenue will be shared between Baghdad, the Kurds and oil companies.

Kurdish President Massoud Barzani called a "giant step" at a lavish ceremony in Irbil.

"We are proud of this success, and this achievement will serve the interests of all Iraqis, especially the Kurds," he said.

The ceremony was also attended by the President of Iraq, Jalal Talabani, who is also from Iraq's Kurdish minority.

Oil will be transported by lorry from the Taq Taq field to Irbil at a rate of 40,000 barrels per day (bpd) and then pumped along to Iraq-Turkey pipeline to the Turkish port of Ceyhan.

Initial exports will also include 50,000-60,000 bpd will be pumped from the Tawke field in Dohuk.

Frosty relations

Kurdish government adviser Khalid Salih said it was hoped 250,000 bpd could be exported by the middle of 2010.

"The Kurdistan region wants to be a leading example in the new Iraq ... to contribute to Iraq's increased oil production. Today, we are proud to be part of this," Mr Salih said.

Correspondents say, apart from Mr Talabani, no representatives of Iraq's Shia Arab-led central government were apparent at the ceremony, underscoring the frosty relations between Baghdad and the Kurdistan Regional Government.

The disagreements over oil contracts are part of a wider dispute over land, power and the country's massive oil reserves, which US officials see as the greatest threat to Iraq's long term stability.

Iraq has the world's third-largest oil reserves, but only produces up to 2.4m bpd - which is below the level before the US-led invasion in 2003.