New Turkish oil venture signals growing clout of Kurdistan
As the Middle Eastern socio-political landscape has unraveled in recent years, it has transformed the one-time frosty relations between the Iraqi Kurds and Turkey into one of the most important alliances in the region.
The Arab Spring and the rapidly changing power makeup of the Middle East may have played a key part, but money and the power of economy have echoed louder. Trade between the Kurdistan Region and Turkey is reaching unprecedented heights, none more so than in the field of energy.
The booming economy of Kurdistan is underpinned by its status as the last great oil frontier. Kurdistan has billion of barrels of oil reserves and remarkably with the majority of the oil not even discovered.
With the oil rush in Kurdistan, Turkey, with an ever-growing thirst for oil to fuel its heated economy, does not want to remain idle while global players capitalise on immense opportunities on its door step.
The growing energy ties between Ankara and Erbil, has not only resulted in strategic and historic contracts between the two governments setting the stage for a rapid rise in trade, but it has slowly led to intertwined destinies of the Turks and Kurds. This drive has led to great unease in Washington, who ironically, only few years ago were frantically trying to reconcile both parties.
The win-win partnership on an economic scale is in tune with the need to redraw strategic alliances and political balance of power in the Middle East. Turkey needs the stable, secular and Western-leaning Kurdistan, in the midst of a Syrian civil war that threatens Turkey at every turn, Shiite domination in Baghdad rekindling animosity and insurgency amongst Sunnis and not forgetting Iran with its nuclear ambitions and its hands deep in regional struggles.
While Syria took center stage in the diplomatic flurries of recent days, leading to the visit of Turkish Prime Minister Recep Tayyip Erdogan to Washington, the announcement by Erdogan as he left on the plane for Washington of a partnership between the state run Turkish Petroleum (TPAO) and US giants Exxon-Mobil to jointly explore for oil in Kurdistan, has significant long-term ramifications.
Not only does Kurdistan and Turkey have the basis for direct exports with the implementation of new oil pipelines, but this places Turkey directly at the grass-roots of the Kurdish oil drive.
According to Erdogan “there's nothing more normal, more natural than Turkey… to take a step that is based on mutual benefit." In recent months Ankara has strongly defended their agreements with the Kurdistan Regional Government (KRG) and has also in turn backed the Kurdish rights under the current Iraqi constitution.
The Kurdish oil boom is long the source of Baghdad ire, which views control of oil exports and unresolved nature disputed of territories, as the last placenta by which they can reign in and influence Kurdistan. With contracts with some of the biggest oil companies in the world and strategic agreements with Turkey, Baghdad’s unease has gone into overdrive.
In reality, the oil majors and Turkey know fully well the risks. The ire of Baghdad is considered secondary to their lucrative opportunities and the strategic and political benefits that such moves harness.
These parties are essentially choosing Kurdistan over Baghdad and such measures only makes the KRG more confident in its economic growth, its regional standing and in its stand-off with Baghdad.
Baghdad may have been playing hardball over payments to foreign oil companies, constitutional interpretations and national budget as well as over disputed territories, but with its hands full in the fresh Sunni uprising, maintaining a shaky national coalition and national elections around the corner, it needs the Kurds and Nouri al-Maliki’s government may have to rethink its policies on Kurdistan.
Kurdistan’s message is simple, it will drive on with its national programme and lofty goals, with or without Baghdad.
This picture shows an oil company in Erbil.