Kurdistan is taking its first steps towards gaining independence from Baghdad in the sale of its oil and gas with a convoy of trucks taking the condensate liquid fuel bi-products of a remote gas field directly into Turkey.

At least 15 trucks a day are loading up with high quality condensate at Khor Mor's gas plant and then trundling down a bumpy road to start the two-day journey to Mersin on the Turkish Mediterranean.

In return, Turkey is trucking back quantities of diesel fuel and kerosene to use in the autonomous region's power plants.

"It's a very simple but symbolic start to direct oil trade between the Kurdistan Regional Government (KRG) and Turkey - and there will be more to come," said an official familiar with the barter-type operation between private companies.

"Neither side is thinking about stopping."

But Baghdad wants them to. It believes Iraq's central government has the sole right to export oil and gas produced throughout Iraq and says deliveries by truck from Kurdistan across the border into Turkey are illegal.

Ankara is meanwhile encouraging the swap, which kicked off with five tankers in July. And Turkish Energy Minister Taner Yildiz says the volume could gradually build up to 200 trucks a day - roughly 40,000 barrels per day (bpd).

Industry sources say the KRG is now supplying only Khor Mor condensate, but crude oil from other fields will also be exported.

"Turkey believes that Kurdistan's export of oil and gas does not run contrary to Iraq's constitution," said the official, who asked not to be named. "And Turkey is a logical exit route for the KRG," he added.


The KRG halted exports in April in a dispute over payments from Baghdad to companies working in the region. It restarted them in August, but warned it would cut shipments by mid-September if there was no progress on payments.