Signed, tested, flow­ing and ready for world mar­kets – Kurds will sell oil via new pipe­line with or without Bagh­dad

The Kurdish Globe - - NEWS - By Bash­dar Pusho Is­maeel

The new pipe­line link­ing crude oil from Kur­dis­tan to the Turk­ish port of Cey­han is signed, tested, flow­ing and ready to be pre­sented to world mar­kets. The only hitch ap­pears to be elu­sive thumbs-up from Bagh­dad to of­fi­cially dis­patch and sell the oil.

How­ever, hav­ing come so far from nu­mer­ous con­tracts signed be­tween Er­bil and Ankara, mil­lions in­vested in the plan­ning and con­struc­tion and testing of the pipe­line, the oil gath­er­ing pace at thou­sands of bar­rels is not de­signed to sit in Turk­ish silo’s in­def­i­nitely wait­ing for Bagh­dad. It’s there to be sold and let there be no doubt, it will ul­ti­mately be sold with or without the con­sent of Bagh­dad.

Over the past few years, thou­sands of bar­rels were sold to Turkey, Iran and lo­cal mar­kets via trucks and the oil pipe­line doesn’t change the end out­come, only the method of trans­porta­tion.

Turkey has been care­ful not to alien­ate Iraq, who has per­sis­tently voiced their dis­con­tent at in­creas­ingly closer ties Ankara has with the Kurds and with the Kurds grow­ing in­de­pen­dence, and has tried to re­as­sure the Iraqi au­thor­i­ties in re­cent months.

Turk­ish En­ergy Min­is­ter, Taner Yildiz, stated last week that they would wait for ap­proval from Bagh­dad prior to ship­ping the crude and ex­pressed hope that a deal can be reached this month.

But is Turkey re­ally about to rip-up the con­tracts, aban­don the pipe­lines and its high stakes and in­ter­ests be­cause Bagh­dad deems grow­ing in­de­pen­dence of the Kurds against their in­ter­ests? In re­al­ity, Turkey is al­ready neck-deep in Kur­dis­tan and is not about to back­track. It ben­e­fits tremen­dously from easy ac­ces­si­ble Kur­dish oil and gas, from bil­lions of dol­lars of trade and hav­ing the Kurds as strate­gic part­ners at a time of great re­gional tur­moil.

Turkey or any other ma­jor power can­not over­look a re­gion that has at least 45 bil­lion bar­rels of oil and tril­lions of cu­bic feet of gas. Ac­cord­ing to some es­ti­mates, Kur­dis­tan Re­gion would rank 10th amongst coun­tries with most oil re­serves. Iron­i­cally, this doesn’t take into ac­count the Kirkuk prov­ince that the Kurds have long sought.

The flows to the pipe­line are set to start at 300,000 bpd and rise to 400,000 bpd. The am­bi­tious Kur­dish govern­ment is tar­get­ing 1 mil­lion bpd by 2015 and 2 mil­lion by 2019.

Ev­ery year, the Kurds seem­ingly fight a bat­tle to se­cure share of the Iraqi fed­eral bud­get, and strik­ingly for Kur­dis­tan, it could soon re­ceive more via the pipe­line than the share of the rev­enues it strug­gles to re­ceive from Bagh­dad. Ul­ti­mately Bagh­dad seeks to gain sig­nif­i­cantly from Kur­dish oil as rev­enue would be re­ceived cen­trally and then split ac­cord­ing to pre­vi­ous rev­enue shar­ing agree­ments - a fact that stub­born Iraqi pride over­looks.

All this means is that the Kurds will soon cut the um­bil­i­cal cord that keeps it re­liant on Bagh­dad. It put the boot firmly on the feet of the Kurds. How­ever, any side-step­ping of Bagh­dad in oil rev­enues would in­crease hos­til­i­ties and serves to en­sure that Bagh­dad digs their heels in over ar­ti­cle 140 and Kirkuk and other fes­ter­ing dis­putes.

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