With oil now flowing from Iraqi Kurdistan to Turkey after the two sides signed a groundbreaking agreement late last year, Baghdad is mounting an international legal challenge to the deal.
In a deepening row over control of Iraq’s energy, Baghdad has announced it is employing an international law firm to block the sale of oil piped from semi-autonomous Iraqi Kurdistan to Turkey. Last year, Ankara signed a wide-ranging energy agreement with the Iraqi Kurdistan Regional Government, or KRG, and last December, oil from the region started flowing through a newly-constructed pipeline to the Turkish Mediterranean port of Ceyhan.
But Iraq's central government insisted only it had the right to sign agreements on exporting energy. Dr. Emre Iseri, an energy politics expert at Izmir’s Yasar University, said the legal challenge posed a threat to the agreement.
"It’s a problem. You are talking about international law, it's about legitimacy. If you act against international law, that means your maneuvering space is limited," he said.
Ankara has steadfastly defended its deal with the Iraqi Kurds, saying it complies with Iraq’s constitution. The Turkish government has been working hard to bring Baghdad into the deal.
But Sinan Ulgen, a visiting scholar at Carnegie Europe in Brussels, said Baghdad's decision to mount an international legal challenge underlined its concerns about the oil agreement.
"That would change the balance between the KRG and Baghdad. Baghdad also fears that other regions in Iraq will follow the same example -- like Basra. Therefore they don’t want to set a precedent that in time would weaken the central control over the rest of Iraq’s territory," said Ulgen.
According to Iseri, the Iraqi government was not alone in having concerns over the energy deal. He said Baghdad’s decision to mount a legal challenge was made in the knowledge that it had strong international support.
"More or less, the U.S. and Iranian positions are similar in the Iraqi case. The United States would like to see a unified Iraq, and also from the perspective of Iran, that would not like see a disintegrated Iraq ... And also Russia would not like to see alternative oil and natural gas sources in the market," said Iseri.
For Ankara, the energy deal with Iraqi Kurdistan has been an economic priority. With little energy reserves of its own, the Turkish government saw the deal as diversifying the country's energy sources as well as expanding trade, said Ulgen.
"The Turkish government will decide to push [forward] with the deal because it’s a deal of critical importance to Turkey, given Turkey’s quest for more energy resources and also the concessions that were granted to Turkish companies in the region. So there is lot of political capital attached to this deal as well," he said.
The Iraqi Kurdish region is already estimated to be Turkey’s second largest trading partner. Ultimately, international lawyers and judges could decide the fate of Ankara's energy deal with Iraqi Kurdistan. Observers said Ankara was likely to respect any legal ruling, but will be hoping that during the protracted legal process, a three-way deal between Erbil, Baghdad and itself can ultimately hammered out.