Turkey: Ankara and Iraqi Kurds Moving Ahead on Energy Ties?
Iraq has been the site of one of the great turnarounds in Turkish foreign policy. On the one hand, in the north, Ankara has gone from having dreadful relations with the Kurdistan Regional Government -- it was not that long ago that Turkish government officials refrained from even using the word "Kurdistan" -- to working closely on a host of political and economic issues with the Kurdish-led government there. On the other hand, Ankara's relations with Baghdad have taken a nosedive over the last few years, with the Turkish and Iraqi governments failing to see eye-to-eye on a score of issues.
These simultaneous changes are, of course, not isolated from each other. One of the issues driving a wedge between Turkey and Iraq is the question of Ankara's energy ties with the KRG and whether the Iraqi Kurds can bypass the central government in Baghdad and sign independent energy deals with the Turks. The issue may get even more complicated if a recent report by Bloomberg, which claims Ankara and the Iraqi Kurds have signed a secret deal to send northern Iraqi oil and gas to Turkey, is true. From Bloomberg's report:
Iraq’s Kurdish region has signed a landmark agreement with Turkey to supply it directly with oil and gas, two people familiar with the matter said.
The accord was signed last month when Turkey’s Prime Minister Recep Tayyip Erdogan met Iraqi Kurdish Prime Minister Nechirvan Barzani in Ankara, said the people, who asked not to be identified because the plans are private. Turkish Energy Minister Taner Yildiz, contacted via his press office, declined to comment, as did an Iraqi Kurdish official. The Oil Ministry in Baghdad didn’t immediately respond to a request for comment.
The Kurdish government will sell oil and gas directly to Turkey in a deal that so far has bypassed the Iraqi government in Baghdad, which has warned the Kurds not to sign separate energy accords. Turkey may also take the Kurdish government’s stake in concessions operated by Exxon Mobil Corp. on the enclave’s border with the rest of Iraq, one of the people said.
“Large-scale oil exports would change the economic position of Kurdistan,” said Robin Mills, head of consulting at Dubai-based Manaar Energy Consulting and Project Management. “If this deal goes through, it’s an aggressive move by Turkey that really means busting relations with Baghdad.”
Iraq’s deputy prime minister, Hussain al-Shahristani, said yesterday his government has told Turkey that it doesn’t allow oil agreements without central government approval, and that Turkey must respect Iraqi sovereignty.
Secret deal or no secret deal, a Reuters article from earlier this week makes it clear the Iraqi Kurds are gearing to transport energy resources through Turkey. From Reuters:
Iraqi Kurdistan will be ready to export its crude oil directly to world markets via Turkey within months after a new pipeline is completed, a move likely to deepen a row with Baghdad over the distribution of Iraq's hydrocarbon revenues.
The Kurdistan Regional Government (KRG) is on track to finish the pipeline in the third quarter, linking Genel Energy's Taq Taq oilfield with an existing Iraq-Turkey crude pipeline, four Turkey-based industry sources told Reuters.
Turkey has given the green light to the plan, under which oil from Taq Taq will enter the Kirkuk-Ceyhan pipeline at Fishkhabur pumping station near the Turkish border, from where it will flow directly to Turkey's southern port of Ceyhan for shipping to international markets, the sources said.
The move will help Kurdistan significantly increase its oil exports but could upset the Iraqi central government, which sees independent exports from the north as illegal and says growing trade between the KRG and Turkey threatens to split Iraq.
Although the United States has expressed concern to Turkey about going ahead with signing independent energy deals with the KRG and has also tried to ease the tensions between Ankara and Baghdad, statements made by Turkish Prime Minister Recep Tayyip Erdogan seem to indicate that his government is ready to move ahead with its northern Iraq dealmaking. It's just another reminder that energy politics remain a major driver of Ankara's foreign policy and will likely play an even bigger role in formulating policy as northern Iraq's energy resources get closer to being market ready.