Ankara confirms critical N. Iraq oil accord

Turkey's state-run Turkish Petroleum Corporation (TPAO) is partnering with the Kurdistan Regional Government (KRG) and Exxon Mobil to carry out oil exploration in northern Iraq, Erdoğan said

Ankara confirms critical N. Iraq oil accord

World Bulletin/News Desk

Minutes before his departure for the US on Tuesday, Turkish Prime Minister Recep Tayyip Erdoğan confirmed that a long-speculated energy deal in Iraq's Kurdish-led north was true, an announcement that riled Baghdad while placing further pressure on Washington.

Turkey's state-run Turkish Petroleum Corporation (TPAO) is partnering with the Kurdistan Regional Government (KRG) and Exxon Mobil to carry out oil exploration in northern Iraq, Erdoğan said on Tuesday, taking Turkey's cooperation with Iraqi Kurds on energy one step further.

"Our oil company already has an agreement with Exxon Mobil in place. ... This is a step with the KRG on exploration work," Erdoğan told reporters at Ankara airport before heading to the United States for an official visit.

He is due to meet US President Barack Obama on Thursday. Erdoğan added that details would be clearer after his US visit.

Erdoğan's acknowledgement of the deal is meaningful in terms of timing, observers said, arguing the prime minister might have hoped the critical deal may be overlooked amidst the busy political agenda. During his decade-old prime ministry, Erdoğan has become well-known for timely announcements on visits abroad.

The oil deal will likely be overshadowed by the crisis in Syria, which is expected to dominate the talks -- and media reports -- between Erdoğan and Obama. In addition to Syria, Erdoğan will also seek Obama's support for further energy deals that Turkish companies are hoping to strike in northern Iraq.

Erdoğan's statements follow earlier speculation in media that the Kurdish region has signed a ‘landmark agreement' with Turkey to supply it directly with oil and gas. Sources earlier said Erdoğan inked the deal during a meeting with the Iraqi Kurdish Prime Minister Nechirvan Barzani in Ankara in March.

Referring to TPAO's partner ExxonMobil as “the most controversial of all international oil investors in Northern Iraq,” London-based IHS energy analyst Sıddık Bakır says: “It remains to be seen what Baghdad's opposition to this announcement will look like. Also, it remains to be seen what reaction the Turkish prime minister will receive during his visit to the US, which was previously critical of Turkey's energy-fueled relations with the Kurdish administration.”

Faisal Abdullah, spokesman for Hussein al-Shahristani, Iraq's deputy prime minister for energy was quoted as saying, “The deal is illegal and is not in line with the Iraqi constitution" late on Tuesday.

Recalling that the Iraqi government has repeatedly asked ExxonMobil to either cancel its deal with Kurdistan or leave its operations at the giant West Qurna-1 oilfield in southern Iraq where the US company holds a 60 percent stake, Bakır said ExxonMobil sought to retain both areas and hadn't left West Qurna-1 despite its announcement last year to sell its stake.

Oil is at the heart of the fight between the Arab-led central government in Baghdad and the ethnic Kurdish-run northern enclave as they dispute control over oilfields and territory and the sharing of crude oil revenues.

Exxon, a global oil company based in Texas, was the first to sign up for exploration deals with the KRG. Others including Chevron, Total and Russia's Gazprom Neft have followed.

Until now, resource-hungry Turkey has been a customer and a transportation outlet for oil exports from the Kurdish region. With this agreement, the Turks would play an active role in exploiting Iraqi Kurdistan's rich hydrocarbon resources.

Baghdad says it alone has the authority to control exports from Iraq and that deals between oil companies and the KRG are illegal. Leaders of the autonomous Kurdish region say their right to control oil resources is enshrined in Iraq's federal constitution, drawn up following the US-led invasion of 2003.

Turkish industry sources said the likely partner is Turkish Petroleum International Company (TPIC), an arm of state-run TPAO. A spokesman for the company could not immediately be reached for comment.

Washington, wary of the divisions between Baghdad and the Kurdish region, has urged passage of a long-delayed national oil law to resolve the standoff, which has intensified since the last US troops left in December 2011. "We will develop our steps after this visit," Erdoğan said, referring to the plans for northern Iraq, without specifying what the agreement would involve. The Turkish company will take equity stakes in a partnership with Exxon and KRG and would become part of the production-sharing agreement, an Ankara-based energy source said.

Another energy official in Ankara said any contracts would be in the form of commercial agreements signed between companies, not an agreement between governments.

Last Mod: 16 Mayıs 2013, 10:07
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