Rosneft becomes first oil major to pre-finance Kurdish crude

LONDON

, Feb 21 (

Reuters

) - Russian state oil firm Rosneft has become the first major oil firm to pre-finance crude exports from Iraq's

Kurdistan

, joining trading houses in the race for crude from the semi-autonomous region. "We look forward to developing new markets for Kurdish crude oil," a statement by Rosneft quotes chief executive

Igor Sechin

as saying. The contract is due for 2017-2019, Rosneft said. Sechin said Rosneft would be taking Kurdish barrels to the company's growing refining system. In Europe, Rosneft owns a large refinery system in Germany. Rosneft also said it was looking to cooperate with Kurdistan in upstream and logistics. Kurdistan's natural resources minister

Ashti Hawrami

said the deal was opening up new possibilities for cooperation between Rosneft and Kurdistan. Kurdistan has started independent crude exports from the central government in

Baghdad

in the past three years as it argued it was not getting its share of Iraq's budget revenues and needed money to fund its war against Islamic State. But as oil prices crashed, the region had to borrow as much as $3 billion from trading houses such as Vitol, Petraco, Glencore and

Trafigura

as well as neighbouring

Turkey

, repayable by future crude sales. Baghdad has first pledged to sue buyers of Kurdish oil as it insisted the central government was the only legal exporter of barrels both from southern and northern Iraq. But Baghdad has lately softened its stance on the companies and traders working in Kurdistan with the barrels being sold in both Europe and Asia. (Reporting by Dmitry Zhdannikov; editing by

Katya Golubkova

)
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