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Iraq’s Kurds’ gambit on pipelines to
Turkey may not pan out
29.5.2012
By Joel Wing —
Ekurd.net |
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Kurdistan Regional Government Natural Resources
Minister Ashti Hawrami (R) speaks with Turkish
Energy Minister Taner Yildiz during a joint news
conference in Erbil, May 20,2012. Photo: Reuters
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Read more by the Author
May 29, 2012
In May 2012, the Kurdistan Regional Government
(KRG) announced that it had signed a deal with
Turkey to build one new pipeline in conjunction
with the Iraqi Oil Ministry, and that it wanted
to build two more independent of Baghdad. If
completed, those latter two would be a major
step towards Kurdish independence, because it
would free it from depending upon Baghdad for
money. The problem for the Kurds is that while
they are making much fanfare over the proposal,
Turkey is likely just using them to pressure
Prime Minister Nouri al-Maliki, which it is in
the middle of a dispute with. Turkey would like
Kurdish oil and gas to flow through it, but it
is not ready for an independent Kurdistan.
On May 20, 2012, Turkey signed a pipeline deal
with the Kurdistan Regional Government (KRG).
The pipeline is already in the works. The first
stage is supposed to be finished by October
2012, and carry oil from the Taq Taq field in
Erbil. The second part would connect to the
existing northern pipeline that is run by the
Oil Ministry, and be completed by August 2013.
It would have a capacity of 1 million barrels a
day. More importantly, Natural Resource Minister
Ashti Hawrami said that two more pipelines would
be built to Turkey, one for oil and the other
for natural gas, independent of Baghdad. The
point of the other two lines would be to allow
the Kurds to directly ship natural resources to
Turkey, bypassing the central government.
Minister Hawrami claimed that the KRG would take
17% of the profits from the two lines, which is
its percentage of the national budget, and
deliver the rest to Baghdad. Kurdistan has
always wanted its own pipelines to further
exploit its natural resources. Hawrami claimed
that the region could easily produce 300,000
barrels a day of petroleum, and reach 2 million
in a few years. Currently, Kurdistan is
exporting no oil, because it is in a payment
dispute with the central government. If
successful, this deal would be a major coup for
the KRG.
The Iraqi government is obviously upset with
this news. It warned Turkey over the deal, and
the Kurds. Officials have demanded that all
contracts go through Baghdad. It already
considers all the Kurdish oil deals illegal,
because they have not included the central
government. At the same time, Deputy Premier
Hussein Shahristani, who is in charge of the
country’s energy policy, threatened to cut
petrol supplies to Kurdistan in retaliation. He
held off on implementing that policy, only after
consulting with President Jalal Talabani.
Baghdad has been the greatest opponent of the
Kurds’ oil policies, so it was no surprise that
they have taken this stance. It wants one
national energy policy for the country, and sees
the Kurdish one as a threat. The dispute between
the two is taking on added importance, because
Erbil and Baghdad are in an argument over Prime
Minister Nouri al-Maliki’s administration. The
Kurdish agreement with Turkey then, is seen not
only as a challenge to the Oil Ministry, but the
premier as well.
Having its own pipelines would be a major step
towards Kurdish independence. Minister Hawrami
stated that if the KRG had its own oil
infrastructure, it would not be dependent upon
Baghdad for funds. The region already smuggles
oil and derivatives to Iran and Turkey, which
provides it with its own revenue, but it is a
small amount compared to the 17% of the national
budget it gets each year. That money provides
95% of the KRG’s needs each year. That fact is
something that the Iraqi government has held
over the Kurds. It’s also a major reason why the
Kurds have followed their own oil policy,www.ekurd.net
because they eventually want their own
sovereignty. It has signed oil contracts since
2002, even before the fall of Saddam Hussein,
and passed its own oil legislation in 2007. It
has also aimed at getting Turkish companies to
enter its market to try to get their political
support. In total, it has more than 40 petroleum
contracts today. At the same time, it depends
upon Baghdad to export, because it controls the
infrastructure. It has come to two agreements to
export petroleum, but both times they broke down
over paying the energy companies. The problem
for the Kurds is that with oil production taking
off in the south, the Iraqi government does not
need Kurdish petroleum exports as much. That
poses a dilemma for the Kurds, because they can
protest and end its shipments all it wants, but
it won’t have much affect upon policy. If it
ever got its own pipelines, it would be free
from all these restrictions, and be a major step
towards it becoming its own country.
The success or failure of the Kurdish oil
strategy really depends upon Turkey. Turkey
needs oil shipments, and would like to be a
major transportation hub of energy from the
Middle East and Asia to Europe, which is in the
Kurds’ favor. At the same time, it does not want
Kurdish independence. It has its own Kurdish
problem, and a Kurdish state would not help with
that. Unfortunately, the pipeline deal appears
to be a political ploy by Ankara. It is
currently in opposition to Premier Maliki’s rule
in Iraq. It has called him sectarian, is siding
with his rival Iraqi National Movement, and is
hosting Vice President Tariq Hashemi who is
facing terrorism charges at home. The Kurdish
pipeline deal seems like part of this effort to
pressure the premier. Until Ankara changes its
position on Kurdish independence it is highly
unlikely that the KRG will ever get its way on
building its own oil infrastructure, and
cuttings its ties with the federal government.
SOURCES
Arraf, Jane, “Iraq’s unity tested by rising
tensions over oil-rich Kurdish region,”
Christian Science Monitor, 5/4/12
Associated Press, “Iraq warns northern Kurdish
region that its oil deals with Turkey must have
Baghdad approval,” 5/21/12
Brosk, Raman, “Any attempt to deduct Kurdistan’s
budget is “collective” punishment, says Kurdish
Blocs Coalition,” AK News, 5/3/12
- “Shahrestani suspends order to stop petrol
export to Kurdistan,” AK News, 5/22/12
Hadi, Hemn, “KRGs oil production could easily
reach 300,000 barrels per day, says minister,”
AK News, 5/14/12
Hassan, Rebin, “KRG will produce two million
barrels of oil per day by 2013, says minister,”
AK News, 5/20/12
International Crisis Group, “Iraq And The Kurds:
The High-Stakes Hydrocarbons Gambit,” 4/19/12
Middle East Financial Network, “Turkey Aims to
Contain Iraq, Iran,” 5/20/12
Rasheed, Ahmed, “UPDATE 2-Iraqi Kurdistan to
push ahead with oil export plan,” Reuters,
5/20/12
Tree, Oliver, “Iraq Warns Turkey To Halt
Kurdistan Pipeline Deal,” International Business
Times, 5/22/12
Van Heuvelen, Ben, “KRG claims right to
independent crude exports,” Iraq Oil Report,
5/10/12
Joel Wing, with an MA in International Relations,
Joel Wing has been researching and writing about
Iraq since 2002. His acclaimed blog, Musings on
Iraq, is currently listed by the New York Times and
the World Politics Review. In addition, Mr. Wing’s
work has been cited by the Center for Strategic and
International Studies, the Guardian and the
Washington Independent. You may visit his Blog
Musings On Iraq at musingsoniraq.blogspot.com
Copyright © 2012 ekurd.net
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