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Royal Dutch Shell Plc .com: Iraq Offers to Sell Kirkuk Oil Through Term Contracts

July 2, 2006 2:16 a.m.

AMMAN — Iraq is offering to sell 300,000-350,000 barrels a day of Kirkuk crude oil through term contracts as of beginning of August, head of the State Oil Marketing Organization, or SOMO, Falah Alamri said Saturday.

“We are going to put an advertisement either today or tomorrow for international companies to sell them Kirkuk crude through term contracts,” Mr. Alamri told Dow Jones Newswires by telephone from Baghdad.

“We will be able to supply 300,000 barrels a day to 350,000 barrels a day of Kirkuk crude as term contracts from the beginning of August until the end of the year,” he said.

Exports of Kirkuk crude resumed this week after a suspension of nearly a year as persistent acts of sabotage to the pipeline to Turkey’s Ceyhan port prevented that from happening.

SOMO has so far sold 7.6 million barrels since pumping of Kirkuk crude resumed last week.

It announced Friday that it awarded some 3.6 million barrels in a second tender to Repsol, Royal Dutch Shell and Vitol’s North Atlantic. It has also sold 4 million barrels to Turkey’s Tupras and to U.S. giant Exxon Mobil, 2 million barrels each, from Ceyhan in the first tender of Kirkuk Crude.

The marketing arm also announced Friday a new tender to sell 6 million barrels of Kirkuk crude for lifting by July 18.

Mr. Alamri said that SOMO would continue to sell Kirkuk crude through auctions for the rest of July.

He said production from northern oil fields is currently standing at a little more than 500,000 barrels a day. It was around 250,000 barrels a day in May.

Iraq couldn’t resume sustainable exports from northern oil fields for the past two years due to continuous acts of sabotage to oil facilities in the north. Before the U.S.-led war on Iraq in March 2003, Iraq used to export around 800,000 barrels a day from northern oil fields.

Iraq is exporting the bulk of its crude from southern oil fields which stand at around 1.5 million barrels a day.

Mr. Alamri said improvement in protecting the export pipelines in the north has led to current oil exports from the north. He said the government in cooperation with coalition forces has taken serious steps this time to protect the pipeline. “We are desperate to maintain production and exports from the north,” he concluded.

Write to Dow Jones Newswires editors at

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