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Wed 10 Dec 2008 05:01 PM

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Iraq to resume South Korea oil exports

Iraqi oil ministry source says oil exports to SK Energy will restart on January 1 following one-year hiatus.

Iraq will restart oil exports to South Korea's SK Energy on January 1 following a year's hiatus after SK withdrew from a contract with Iraq's Kurdish region, an Iraqi oil ministry source said on Wednesday.

"We've done the deal," the source told newswire Reuters by telephone. "They withdrew from their contract and exports restart on January 1."

Iraq will export 65,000 barrels per day (bpd) to South Korea's largest refiner, the source said. That was down from the 90,000 bpd Baghdad exported to SK before the contract was suspended on January 1, 2008.

SK angered Iraq's central government by signing a deal with Iraq's Kurdish Regional Government as a member of a consortium to develop the Bazian oilfield in the largely autonomous northern region.

Baghdad says the deals with the Kurdish authorities are illegal and lack central government approval. It has refused to allow the companies involved to compete for new contracts elsewhere in Iraq.

Iraq's oil ministry said last week it had reached an initial agreement to lift the company from its black list after SK said it was willing to withdraw from the consortium holding the contract with the Kurdish region.

SK said in November it would not join a $2.1 billion deal to develop eight Kurdistan oil blocks spearheaded by the Korea National Oil Corp (KNOC) and signed in September.

Iraq also suspended exports of around 10,000 bpd to Austrian oil refiner OMV earlier this year after OMV signed production sharing agreements with the Kurdish region. (Reuters)

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