Kurdish oil may seriously harm Ankara’s ties with Baghdad

July 08, 2012, Sunday/ 12:26:00

Turkey will soon start to get crude oil directly from northern Iraq’s Kurdistan Regional Government (KRG), a step that is sure to put Turkey on bad terms with the Iraqi central government, which accuses the KRG of seeking to become an independent state.

“Such a step would harm Turkey’s relations with the Iraqi central government,” said Serhat Erkmen, a consultant to Ankara-based think tank Center for Middle Eastern Strategic Studies (ORSAM). “Should Turkey, bypassing Baghdad, build an energy pipeline in cooperation with Arbil, this would surely cause Turkey’s relations to sour further with the [Nouri al-] Maliki government,” he told Sunday’s Zaman.

At the Caspian Gas Forum in İstanbul, the Kurdish region’s Natural Resources Minister Ashti Hawrami announced, “Even if there’s no consensus with Baghdad, we will continue to sell natural gas and oil to Turkey.” And at an energy conference held in Arbil in May, Turkish Energy Minister Taner Yıldız announced that Turkey would re-launch the practice of getting oil by trucks from the Kurdish region.

The central government and the Kurdish authorities disagree on the interpretation of the Iraqi constitution. Article 112 states, “The federal government, with the producing governorates and regional governments, shall undertake the management of oil and gas extracted from present fields.” It’s the term “present” in the article on which the KRG bases its claim that it can independently conclude oil and gas agreements with foreign firms, maintaining that the article makes reference to oil fields operated before the constitution was adopted.

According to Deniz Bölükbaşı, former deputy from the Nationalist Movement Party (MHP) and a former ambassador, the Kurdish authority does not have the right to independently act regarding the oil in Iraqi territory. “The Kurds can issue licenses for oil exploration in the Kurdish region, but it’s the central government that has the authority to deal with any oil discovered,” he told Sunday’s Zaman, also noting that it was the Kurds who insisted that the term “present” be inserted in Article 111 so that the article would have a vague meaning.

“If the present oil fields are to be subject to this article, does it make any sense that prospective oil fields be subject to a different legal framework?” he asked. Getting oil and gas directly from the Kurdish region may seriously harm Turkey’s relations with Iraq, Bölükbaşı also cautioned, noting that this is an issue of sovereignty between the Iraqi central government and the KRG.

But Ercüment Aksoy, chairman of the Turkish-Iraqi Business Council at the Foreign Economic Relations Board (DEİK), is a little more optimistic. He strongly believes Turkey concluded the agreement with the KRG after getting the consent of the central government in Iraq. “Turkey’s vision of Iraq is still Bagdad-centered,” he told Sunday’s Zaman.

A deep mistrust exists between the KRG and Maliki’s central government, which accuses the autonomous Kurdish region of signing oil contracts, bypassing the central government with international companies, and thereby violating the constitution. Exxon Mobile is the latest of those companies with which the KRG has concluded more than 40 oil and gas contracts up until today. And on June 3, KRG Prime Minister Nechirvan Barzani said, in a written statement, that they would conclude similar contracts with several other international firms in the near future.

On the other hand, in April the KRG stopped sending oil for export through the national Iraqi pipeline, saying Baghdad hadn’t fully repaid operating costs to producing companies, and that it doesn’t pay the KRG the full 17 percent share from oil revenues, as prescribed by the constitution.

In May, Ali al-Moussawi, press consultant to Iraqi Prime Minister Nouri al-Maliki, warned the KRG that the Kurds need to get Baghdad’s approval when finalizing an agreement with Turkey. This followed an announcement at the energy conference in Arbil that the Kurdish government had reached an agreement with Ankara that enables them, bypassing the Iraqi central government, to export oil to international markets through Turkey.

In spite of Baghdad’s reaction to the agreement, Turkey and the autonomous Kurdish region seem determined to go ahead with the project. Kurdish officials hope a new pipeline that will carry the region’s crude oil to Turkey will be in service by August of next year, which is a move defying Baghdad over the control of the country’s oil sales. But there is also a gas pipeline -- Iraq has none at the moment -- on the agenda. “Iraq will contribute significantly in meeting Turkey’s natural gas demand,” Yıldız said at the energy conference in Arbil, adding, however, that Turkey supports Iraq’s territorial integrity. And Hawrami said at the gas forum in İstanbul that the Kurdish authority was planning to sell 10 billion cubic meters of natural gas to Turkey and then Europe in the long term. The sale is expected to begin within two years.

Turkey is moving on risky ground because Iraq, with Turkey’s exports having reached $8 billion, is a major export market for Turkey. The Turkish Petroleum Corporation (TPAO) recently obtained, as part of a consortium, a contract to explore oil in the south of Iraq. And in cooperation with Japan, Turkey is preparing to bid on large infrastructure and construction projects in Iraq.

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