UPDATE 2-Blast halts Iraq-Turkey oil pipeline flow

Thu Apr 22, 2010 12:21pm BST

* Iraqi oil official confirms halts due to attack

* A week to fix damage, resume exports

* Election heightens tensions

(Adds quotes, details)

By Jamal al-Badrani

MOSUL, Iraq, April 22 (Reuters) - An explosion in Iraq's northern province of Nineveh damaged the Iraq-Turkey oil pipeline and it may take as much as a week to restart exports, Iraqi officials said on Thursday.

Police blamed a bomb planted by suspected Sunni Islamist insurgents fighting to undermine the Shi'ite majority propelled into power after the 2003 fall of Sunni dictator Saddam Hussein.

While overall violence in Iraq has fallen sharply, sectarian tensions were stoked last month after an election that produced no outright winner.

"We are sure now that it was sabotage not a technical failure... The time frame to fix the pipeline and resume pumping oil is about a week," an official at state-run North Oil Co told Reuters on condition of anonymity. "The pipeline was attacked."

Nineveh, on the frontline of a potentially explosive dispute over oil, land and power between Kurds in their semi-autonomous northern enclave and Iraq's majority Arabs, remains a stronghold of insurgent activity, including al Qaeda.

The pipeline from the Kirkuk oilfields to the Turkish port of Ceyhan, which carries around a quarter of Iraq's exports, was last attacked in December. Technical problems halted the flow of oil in January for several hours.

Iraq's oil infrastructure is dilapidated after decades of war, sanctions and underinvestment and the U.S. military has in the past said it found no evidence of sabotage, only of metal fatigue, after explosions Iraqi officials blamed on bomb blasts.

COMPLETE STOPPAGE

Iraqi oil in storage at Ceyhan was about 650,000 barrels, a Turkey-based source said on condition of anonymity. Another shipping source put stores at 300,000 barrels.

One shipping source in Ceyhan said the flow of oil stopped completely at 0400 (0100 GMT) on Thursday, adding that there was one vessel waiting to load 1 million barrels of Iraqi crude.

"There have been technical problems at pump stations on the Turkish side of the pipeline. The flow has been intermittent for a while... I've no idea when it will start again," the source said.

The blast, which occurred south of Mosul in al-Hadhar district, 280 km (175 miles) north of Baghdad, made a hole in the pipeline, a police source told Reuters.

The pipeline has a capacity of 1.6 million barrels per day and typically pumps 500,000 bpd.

Iraq's oil exports fell in March to 1.79 million bpd from 2.083 million bpd the month before, including an average of 1.380 million bpd from the southern oil hub of Basra and 410,000 bpd from the northern oilfields around Kirkuk.

Iraq's oil infrastructure has come under attack frequently since 2003, hampering Iraqi efforts to boost lacklustre oil production and exports above pre-invasion levels. The attacks have eased considerably, however, as the sectarian bloodshed receded, in particular in the Shi'ite south where most of Iraq's crude is produced.

Iraq is now on the verge of a major expansion of its oil industry after signing 10 deals with international oil firms to develop some of its biggest oilfields, and boost its capacity to Saudi levels of 12 million bpd from 2.5 million bpd now. (Additional reporting by Mustafa Mahmoud in Kirkuk, Suadad al-Salhy in Baghdad, Ayla Jean Yackley in Istanbul and Simon Webb in Dubai; Writing by Rania El Gamal and Mike Christie; Editing by Keiron Henderson)