Turkey says wants to draw Baghdad into Kurdish oil deal

Reuters       Humeyra Pamuk

Turkey said on Monday it stood by a bilateral oil deal with Iraq's Kurdistan region that bypassed central government but wanted to win Baghdad's support by drawing it into the arrangement.

Reuters reported that Turkey and Iraqi Kurdistan signed a multi-billion-dollar energy package last week, infuriating a central Baghdad government which claims sole authority over Iraqi oil exports and is wary of any moves that could extend political autonomy to the region.

Turkish Energy Minister Taner Yildiz met Iraq's deputy prime minister for energy, Hussain al-Shahristani, in Baghdad on Sunday to try to mend ties with a federal government which says independent Kurdish oil exports would be illegal. The affair has soured relations between Ankara and Baghdad.

"We stand by the agreement we did with northern Iraq but we hope this can be carried out through a three-way mechanism," Yildiz told a conference in Arbil, the capital city of the Kurdistan region (KRG). "As Turkey, we are trying to move this forward in a careful and courteous way."

"We also would like to have the consent of the Central Government of Iraq for the commercial export of oil from the KRG to Turkey and start a trilateral cooperation scheme that will be beneficial to all."

The Kurdish north of Iraq has enjoyed autonomy since the 1990-1991 Gulf War when a U.S.-led coalition drove Iraqi occupying troops out of Kuwait.

Iraq’s Kurdish region pursues ties with Turkey — for energy revenue and independence

The Washington Post   Ben Van Heuvelen

As the rest of Iraq descends into a crisis of deepening violence, the autonomous enclave of Kurdistan is enlisting the help of an unlikely ally, Turkey, to reach for a long-delayed dream of independence.

In many ways, Iraqi Kurdistan already acts like a sovereign state. Kurdish authorities provide all public services, command their own army and control their own borders — including their heavily guarded southern border with ­Arab-majority provinces of Iraq. In Irbil, the Kurdish capital, most government buildings fly the Kurdish flag — not the flag of Iraq — and many members of the younger generation never learned Arabic and speak only Kurdish.

Until now, however, the Kurds have remained tightly tied to Baghdad because they depend on the Iraqi treasury for the vast majority of their regional budget.

That could soon change.

Putting aside years of hostility, Turkish and Kurdish leaders are quietly implementing an energy partnership agreement, signed earlier this year, that promises to provide the Kurdistan region with an independent stream of oil revenue.

The first major step in the plan is a pipeline that runs directly to Turkey, beyond Baghdad’s reach, and that will begin operating by the end of the year, according to the Kurdistan region’s minister of natural resources, Ashti Hawrami.

“It is our duty as Iraqis to pursue export routes for oil and gas, to secure our future,” Hawrami said.

Iraq vows to work with BP on controversial oil field

AFP

Iraq said Wednesday it would proceed with work alongside British energy giant BP on a controversial northern oilfield, in a move likely to spark anger in the country's Kurdish region.

The development of the Kirkuk oilfield, which lies amid a swathe of disputed territory in north Iraq, is at the heart of a row over land, oil revenues and the powers of the central government that has been raging for years between Baghdad and the autonomous Kurdistan region.

Iraqi Oil Minister Abdelkarim al-Luaybi, Kirkuk provincial Governor Najm al-Din Omar Karim and BP chief executive Bob Dudley visited the field after holding talks in the province's eponymous capital.

"The contract with the British company will be executed by treating the decline in oil production at Kirkuk oilfield, which has reached 230,000 barrels (per day), and the company will work on surveying the fields and sites of Kirkuk oilfield throughout the contract period," Luaybi told AFP.

Current output represents a significant drop off from the field's peak, and Iraqi officials hope to increase production to 500,000 barrels per day in three years.
 

Turkey, Iraqi Kurdistan clinch major energy pipeline deals

REUTERS        Hümeyra PAMUK & Orhan COSKUN

Iraqi Kurdistan has finalized a comprehensive package of deals with Turkey to build multi-billion dollar oil and gas pipelines to ship the autonomous region's rich hydrocarbon reserves to world markets, sources involved in talks said on Wednesday.

The deals, which could have important geo-political consequences for the Middle East, could see Kurdistan export some 2 million barrels per day (bpd) of oil to world markets and at least 10 billion cubic meters per year of gas to Turkey.

Such a relationship would have been unthinkable just a few years ago, when Ankara enjoyed strong ties with Iraq's central Baghdad government and was deep in a decades-long fight with Kurdish militants on its own soil.

But Turkey imports almost all of its energy needs and growing demand means it faces a ballooning deficit, making the resources over its southeastern border hard to ignore.

During a visit to Istanbul last week by Kurdistan Regional Government (KRG) prime minister Nechirvan Barzani, both sides agreed on the fundamentals of the deals and mapped out technical details for a second oil pipeline and a gas route from Iraq's north to Turkey, sources involved in the talks said.

Kurdish crude sales to rise as exports reach second Turkish port

Reuters          Julia Payne and Peg Mackey


* Taq Taq crude exports to reach about 60,000 bpd by end June
* Kurdistan to start deliveries to second terminal in Turkey
* Crude in steady stream to Northern Europe


Iraqi Kurdistan's crude oil sales to world markets, deemed illegal by Baghdad, are set to rise by nearly 50 percent next month as trucks start deliveries to a second export terminal in Turkey, industry sources in the region said on Wednesday.

Crude exports from the Taq Taq oilfield in the autonomous northern region to Turkey's Mersin port started at a trickle in early January and have risen to just over 40,000 barrels per day (bpd).

They are expected to hit around 60,000 bpd by the end of June as trucks unload at the neighbouring Dortyol terminal in southern Turkey.

Oil lies at the heart of a feud between the central government and Kurdistan. Baghdad says it alone has the right to control exports and sign deals, while the Kurds say their right to do so is enshrined in Iraq's federal constitution.

In retaliation, Iraq's State Oil Marketing Organisation (SOMO) sent letters warning customers not to touch any oil that had not been marketed by SOMO and the ministry intends to sue producers, namely Anglo-Turkish firm Genel Energy.

Turkey eyes oil, gas deals with Iraqi Kurdistan

Reuters


Turkey is looking to sign commercial contracts this year with Russian and U.S. companies operating in northern Iraq for joint oil and gas exploration, Turkey's Energy Minister Taner Yildiz told Reuters.

Turkish Prime Minister Tayyip Erdogan last week discussed U.S. concerns about Turkey's deepening energy ties with Iraqi Kurdistan during meetings in Washington with President Barack Obama.


Minutes before his departure for Washington, Erdogan announced that a Turkish company already had a contract in place with U.S. energy company Exxon Mobil but declined to provide details until after the visit.
Yildiz, who was in Erdogan's delegation, said the discussions with Obama and his team were very positive and fruitful.

"We are likely to be involved with Russian and American companies in northern Iraq for different projects like oil and gas exploration. And this year, state-owned and private companies could sign commercial contracts with northern Iraq," he said in an interview.

He declined to name companies.

Exxon was the first to sign up for exploration deals with the Kurdistan Regional Government (KRG). Others including Chevron, Total and Russia's Gazprom Neft have followed.

Turkey agrees energy deal with Kurdish north Iraq

Daniel Dombey        Financial Times

Turkey has defied both Washington and Baghdad by agreeing an energy deal with the north of Iraq that the US warns could further fracture the Middle Eastern state, but which Ankara sees as central to its own future.

Several Turkish officials confirm Ankara struck a secretive framework agreement earlier this year with the autonomous Kurdish Regional Government of Northern Iraq for Turkish state energy companies to take stakes in the region’s oil and gasfields. They add the deal is still so sensitive that it is unlikely to be acknowledged publicly until after a visit by prime minister Recep Tayyip Erdogan to Washington this week, a trip that takes place against a backdrop of increased tension in Iraq itself.

The agreement, together with Turkey’s political opening towards its own Kurdish population, is set to bolster Ankara’s influence in the energy-rich north of Iraq and could help it generate sufficient energy supplies to meet its ambitious growth targets. Mr Erdogan has previously described the deal as a “win win”.

Kurdish officials welcome closer relations. “Let’s be honest: Turkey is our door to the world,” said one, pointing to the KRG’s problematic ties with other neighbours. “Look at the [strained] situation with Iran, Syria, the rest of Iraq . . . Turkey is a big power in the region and, if it follows good policies like at the moment, why not be an ally?”

But the central Iraqi government in Baghdad says that without its permission the energy agreement violates the Iraqi constitution. A direct pipeline link to Turkey under the deal would give the KRG, which already has its own military force, much greater economic independence than before. At present, the only export pipelines available to the region are federally controlled and the KRG has halted exports through them because of a budget dispute with Baghdad.

Iraqi Kurdistan offers improving business environment; tensions with Baghdad remain – country risk report

Maplecroft    Country Risk Report for Iraq

Maplecroft’s Country Risk Report for Iraq focuses on the primary risks to oil and gas companies operating in Iraqi Kurdistan. The report includes in-depth analysis of current political dynamics, including tensions between Erbil and Baghdad, security concerns, legal and regulatory challenges, the human rights and labour rights situation and environmental issues.

Iraq is facing a year of political uncertainty and potential instability. In Iraqi Kurdistan, the relationship between the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP) is souring. Meanwhile, an increasingly hostile and intractable confrontation between Erbil and Baghdad over contested territory and Kurdish issuance of oil contracts remains a source of concern for investors. Tensions peaked in November 2012 when both the KRG and federal authorities sent thousands of troops to a disputed border in the Diyala governorate. A de-escalation of the military stand-off has yielded progress but political statements regarding the incident remain vitriolic.

Oil and gas companies have good reason to be interested in Iraqi Kurdistan. Long-term indications suggest that crude production from the north of the country will constitute a rapidly growing share of overall national output, rising from 6.6% in 2012 to 33% by 2020. However, considerable challenges remain, not least the inability of Erbil and Baghdad to agree on the terms of exploration contracts.

Iraqi Kurds woo more oil majors in contest with Baghdad

Julia Payne & Simon Falush       Reuters

Iraqi Kurdistan said it is negotiating with two or three major international companies to operate oilfields and expects to announce the outcome in about a month, in a move likely to further heighten tensions with Baghdad.

The remarks by Natural Resources Minister Ashti Hawrami on Tuesday highlight the autonomous region's resolve to push ahead with development of its oil resources independently of the Baghdad-based central government.

Kurdistan has upset the central government by signing deals directly with oil majors such as Chevron Corp and Exxon Mobil, providing lucrative production-sharing contracts and better operating conditions than in the south of the country.

Last week Hawrami said Kurdistan, which is in the north of Iraq and has run its own administration and armed forces since 1991, had awarded Chevron a stake in the Qara Dagh oil block.

"We are negotiating with two to three other significant companies. They will hopefully be announced in a month or so," Hawrami told reporters on the sidelines of a conference in London.

He also said Exxon Mobil's contentious deal to operate in the autonomous region was on track.

Kurdish oil trade with Turkey rising, more to come

REUTERS - Iraq    by Pec Mackey


Kurdistan is taking its first steps towards gaining independence from Baghdad in the sale of its oil and gas with a convoy of trucks taking the condensate liquid fuel bi-products of a remote gas field directly into Turkey.

At least 15 trucks a day are loading up with high quality condensate at Khor Mor's gas plant and then trundling down a bumpy road to start the two-day journey to Mersin on the Turkish Mediterranean.
In return, Turkey is trucking back small quantities of diesel fuel and kerosene to use in the autonomous region's power plants.

"It's a very simple but symbolic start to direct oil trade between the Kurdistan Regional Government (KRG) and Turkey - and there will be more to come," said an official familiar with the barter-type operation between private companies.

"Neither side is thinking about stopping."

But Baghdad wants them to. It believes Iraq's central government has the sole right to export oil and gas produced throughout Iraq and says deliveries by truck from Kurdistan across the border into Turkey are illegal.

Ankara is meanwhile encouraging the swap, which kicked off with five tankers in July. And Turkish Energy Minister Taner Yildiz says the volume could gradually build up to 200 trucks a day - roughly 40,000 barrels per day (bpd).