ANKARA: Turkey and Iraqi Kurdistan signed a multi-billion-dollar energy package this week that will help transform the semi-autonomous region into an oil and gas powerhouse but infuriate a central Baghdad government wary of increasing Kurdish autonomy.
The move follows months of negotiations and was cited by sources close to the deal yesterday after being kept secret for two days, apparently because of its sensitivity. Baghdad says any independent Kurdish oil exports are illegal and that it has the sole authority to manage Iraqi oil.
For energy-hungry Turkey, dependent on imports for almost all of its needs, exploiting Iraqi Kurdistan’s rich hydrocarbon resources will help diversify its energy supplies and reduce the country’s ballooning $60bn energy bill.
Ankara’s relations with the Kurds of northern Iraq were long encumbered by Turkey’s battle with Kurdish separatists on its own soil. But in recent years trade and political relations have flourished, both sides benefiting from commerce across the frontier.
The energy deal came in the early hours of a frosty Wednesday morning in Ankara, and was signed during a three-hour meeting between Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani and Turkish Prime Minister Tayyip Erdogan.
“This is the most comprehensive energy deal in Turkey’s history,” a source close to the matter said. “But due to political sensitivities, both sides are taking their time to announce it.”
Neither the Turkish prime minister’s office nor the energy ministry confirmed the signatures following Wednesday’s meeting. On Friday, the energy ministry declined to comment.
Officials in the office of Iraq’s deputy prime minister for energy, Hussain Al Shahristani, were not immediately available for comment. Sources say neither the Turks nor the Kurds wanted to celebrate openly while efforts to get the Iraqi central government on board continue, even though Baghdad can do nothing to stop the process.
Baghdad has long claimed the sole authority to manage Iraqi oil and says Kurdish efforts towards oil independence could lead to the break-up of Iraq. Turkey’s courtship of Kurds has also raised concern in Washington.
But Turkey has repeatedly said it respects Iraq’s sensitivities over territorial integrity and that increasing oil revenues will help the whole of Iraq.
Oil exports from the Kurdish region via an Iraq-Turkey pipeline had dried up due to a row over the sharing of oil revenues. The deal between Turkey and the Kurds also offers a solution to the payment problems.
Crude flow in the KRG’s new pipeline is to start soon, and will link with the 40-inch-wide existing Kirkuk-Ceyhan pipeline to be exported to world markets.
As part of the deal, state-backed Turkish Energy Company (TEC), which Ankara set up to work in northern Iraq, has signed a contract to operate in 13 exploration blocks. In about half of those, it is teaming up with US oil giant ExxonMobil.
reuters
