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12:06, 21 November 2014 Friday

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Turkey a guarantor for energy peace in Iraq
Turkey a guarantor for energy peace in Iraq

Turkey stands as a guarantor for energy peace between Baghdad and Erbil, head of an international energy company says

Turkey is a guarantor for energy peace between Baghdad and Erbil, according to the CEO of an international energy company operating in Iraq. 

A dispute between Baghdad and Erbil over the sale of oil turned into an international legal wrangle as the Iraqi government brought a lawsuit against the Kurdish Regional Government, KRG, in foreign courts. However, the central government and the KRG signed a temporary agreement to settle the oil dispute last week, clearing the way for a permanent settlement to be enacted in a joint hydrocarbon law.

"Turkey is a natural guarantor for energy peace between Baghdad and Erbil," Mehmet Sepil, CEO of Genel Energy-- one of the biggest international energy companies operating in Iraq-- told The Anadolu Agency.  

He said the oil produced in Northern Iraq can only come through Turkey whether it is Kurdish oil or oil from the central government in Baghdad, hence Turkey will guarantee peace.

"Turkey said that the oil is being sold for the good of the whole Iraq and now this situation is being realized. If the oil was not sold, the recent agreement between Baghdad and northern Iraq would never have been signed," Sepil said. 

He emphasized the importance of the meeting between the Iraqi Oil Minister Adil Abdel Mahdi and Kurdish Regional Government Oil Minister Ashti Hawrami at the Atlantic Council Energy and Economy Summit in Istanbul on Thursday.  

“They set together at an international organization for the first time. I think that the recent agreement signed prior to Istanbul was a beginning for them although they still have serious problems to be handled. However, now I think it is more than a beginning," he stated, adding that both of the leaders identify the same problems.

 “Solution is to avoid centralized governance” 

According to Sepil, Iraqi oil regardless of whether it is controlled by the central Iraqi government in Baghdad or by the KRG in Erbil can only be piped to Turkey through the Kurdish region because ISIL controls all other pipelines in the country.

He warned, however, that a permanent and comprehensive solution between Baghdad and Erbil will take a long time. He stressed "if Baghdad plans to avoid the centralized governance of the entire country, which is indeed the solution, a great opportunity will arise for permanent peace."

According to Sepil, the company has been increasing its oil production steadily since 2007. Genel Energy produces 130,000 barrels oil per day in the Tak Tak field while the amount produced in the Tawke field is 110,000 barrels per day.

"Our target for next year is to increase the total production of the two fields to 350,000 barrels per day. We expect a significant rise in our production," Sepil said.  

He added that the oil from Northern Iraq is sought in international markets and that demand is high with the total amount of oil in the pipelines having been sold so far.

Ceyhan pipeline's capacity to be enhanced

"The KRG aims at reaching one billion barrels of oil piped to Turkey through the Kirkuk-Ceyhan oil pipeline," Sepil underlined, and added, "The capacity of the pipeline can easily be increased to 750,000 barrels per day." 

The current daily capacity of the pipeline is 300,000 barrels of oil. 

Genel Energy is the first Turkish company to be traded on the London Stock exchange. The company merged with English Vallares company in 2011 and took the name of "Genel Energy Plc." 

The Tak Tak and Tawke fields in which Genel Energy has been operating are estimated to have reserves of 1.8 billion barrels of oil in total. The company owns a 44 percent stake in the Tak Tak field and 25 percent in the Tawke field. 

Genel Energy has recently purchased 36 percent of Austria's OMV energy company shares worth $150 billion.

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