IRAQI SOMO-DELTA PETROLEUM BARTER DEAL UNDERWAY

UNCLAS ANKARA 004070

SIPDIS


SENSITIVE


DEPT FOR NEA/NGA, EB, EUR/SE


E.O. 12958: N/A
TAGS: ECON EPET PREL TU IZ
SUBJECT: IRAQI SOMO-DELTA PETROLEUM BARTER DEAL UNDERWAY

REF: REF A) ANKARA 3731 B) ANKARA 3537



1. (U) Baghdad minimize considered.



2. (SBU) Delta Petroleum and the MFA confirmed to us that the
GOT had given final approval for the pending SOMO-Delta
barter deal (reftels),under which SOMO will export fuel oil
to Turkey in return for Turkish benzine (gasoline) and LPG.
Delta Petroleum officials told us June 25 that 33 trucks
crossed the border into Iraq on June 21 without incident,
loaded Iraqi fuel oil at the Bayji oil refinery on June
24-25, and began the return to Turkey on June 25. (Note:
Delta has complained of local Kurdish groups charging an exit
tax from Iraq, which will be reported septel).



3. (SBU) The Delta official said he estimates that Iraqi
refineries running at full capacity would produce
approximately 90,000 tonnes of fuel oil per day. Since the
refineries were or likely soon would be running at about half
capacity, they would be producing about 45,000 tonnes of fuel
oil per day. The Delta official estimated that Turkey's
trucking industry had capacity to import (for export to third
countries) roughly 10,000 tonnes of Iraqi fuel oil per day;
the rest, he said, Iraq would have to export through the
south. The official noted that Delta was paying for the fuel
oil with Turkish LPG and gasoline, which the company had been
shipping to Iraq without incident for several weeks.
PEARSON