UPDATE: Gunmen Blow Up Iraq's North Export Pipeline -Official
Hassan Hafidh, Dow Jones Newswires
The attack took place in the section of the pipeline connecting the oil-rich city of Kirkuk to the Baiji, home to Iraq's largest oil refinery. Iraq usually pumps Kirkuk crude oil to the refinery, 250 kilometers north of Baghdad, which takes what it needs before it pumps the rest to Ceyhan.
The official said the pipeline blast was "catastrophic" as it caused huge quantities of crude oil to spill into the Tigris River.
It isn't known yet how long it will take the Iraqi authorities to repair the damaged pipeline.
A Middle East shipping agent based in Ceyhan, through which Iraq exports its Kirkuk crude to Europe, confirmed the flow of oil via the export pipeline was on hold Wednesday.
The agent expected damage to the pipeline to delay or cancel a tender announced last week by the country's crude oil marketing arm, SOMO, to sell 5 million barrels.
The storage facilities at Ceyhan now contain 6.7 million barrels, but Iraq had already sold 4.68 million barrels out of that amount at another tender announced earlier. The remaining barrels won't be enough for a sale, the shipper said.
Two vessels were waiting to load 1.7 million barrels from Kirkuk crude in the storage facilities at Ceyhan Wednesday, he said. One belongs to Spanish refiner Cepsa and the other to U.S. oil major ExxonMobil Corp. (XOM), he added.
SOMO awarded last week the 4.68 million barrels of Kirkuk crude oil in a tender to four companies. The crude must be lifted from Ceyhan before Sept. 24.
"How can we continue with the new tender if the pipeline is stopped?," a source at SOMO said.
The latest incident hits Iraq's Oil Minister Hussein al-Shahristani's bid to resume sustainable exports from Iraq's northern oil fields after adopting new security measures to guard the export pipeline.
Persistent acts of sabotage to that pipeline have shut down Iraq's northern oil exports for most of the time barring a few days since the U.S.-led invasion.
-By Hassan Hafidh, Dow Jones Newswires; + 962 777 612 111; hassan.hafidh@ dowjones.com