Turkey’s energy minister gushes over KRG oil exports
The export from Kurdish-controlled oil fields in Iraq has exceeded an average of 600,000 barrels per day (bpd), Turkey’s Minister of Energy and Natural Resources Taner Yildiz recently told a select group of journalists from the Kurdistan region.
Yildiz said last week that 66 million barrels of crude oil from the Kurdistan region have been exported through Turkey’s Ceyhan port on the Mediterranean Sea over the last 15 months. He predicts daily export to soon reach one million bdp.
“For the moment, the Kurdistan Regional Government [ KRG] sells its oil independently and does not deliver the revenues to Baghdad because Iraq does not pay Erbil due to its own financial problems,” Yildiz said, referring to the ongoing Erbil-Baghdad budget dispute.
Former Iraqi Prime Minister Nouri al-Maliki withheld the KRG’s budget for much of 2014 and a new oil deal between Erbil and Iraq’s new Prime Minister Haidar al-Abadi, inked in principle last December, could not fully thaw relations between the two administrations.
Erbil has accused Baghdad of not living up to the December agreement that would give KRG a monthly payment of $1 billion. The Iraqi government has said declining oil prices, coupled with the KRG’s failure to fully honor the agreement, have made the deal untenable.
The current price of a barrel of crude oil is hovering below $50, reduced drastically from previous years.
“It is in the best interest of the Kurdistan region that Erbil and Baghdad are in agreement, because without stability you can never make use of natural resources,” Yildiz said.
Relations between Ankara and Baghdad have improved after years of diplomatic tensions. In the past, Turkey had accused Iraq’s Shiite government of sectarianism and supporting the Shiite government of Syria’s Bashar al-Assad, which Ankara views as a regional foe.
Yildiz was bullish on improved ties with Baghdad, saying Turkey had plans for a long-term partnership in Iraq’s energy sector.
The Turkish minister said Ankara will be part of a $41 billion oil and gas project in Iraq which he said is advantageous for both countries.
“Turkey supports all the components of Iraq and wants to cooperate with them to use the country’s natural resources equally in the best interest of all of Iraq,” he said.
Yildiz rejected any deal that would have negative impacts on Ankara’s relations with KRG in terms of oil agreements.
Apart from a 50-year-old oil deal with Ankara, the Kurdistan region will from 2017 be a major exporter of natural gas to Turkey. The minister said the gas deal will be beneficial for both sides.
Yildiz said Baghdad's energy laws and regulations allow for gas from other parts of Iraq to be sold in order to provide for people’s necessities and the region’s electricity.
“Because of the proximity, I think we can buy KRG gas at a lower price, but not half the price as some people have suggested,” he said.
Commenting on claims that Turkey deals with a political party, namely Kurdistan Democratic Party (KDP), rather than KRG in relation to their oil deals with Iraqi Kurdistan Region, Yildiz stated “We work in this sector transparently and have nothing to hide. Our dealings about Iraqi Kurdistan oil are directly with the KRG, rather than with a political party.”
Another focus of the meeting was the recent PKK-linked sabotage attack on the Kirkuk-Ceyhan oil pipeline. The PKK said it was carried out by a splinter group without consulting the party's leadership.
“What PKK is doing is enormously detrimental to the Kurds,” said Yildiz, pointing to the KRG’s claim that the sabotage cost the KRG some $250 million in losses.
Yildiz also denied claims that Turkey is benefiting from the sale of oil from areas controlled by the Islamic State, or ISIS.
“Daesh [ISIS] is a terrorist group for us and we have no contact with them. These [allegations] are all propaganda without evidence. Once someone came to me and told me they have evidence, I told him to bring it. I have now been waiting for 15 months and he still hasn't brought it.”
“Turkey earned $52 billion from energy production last year alone. Why would Turkey deal with a terrorist group?”