News / Economy

Turkey Plays Big in Kurdistan's Energy Game

FILE - Kurdish president Massud Barzani (r) and Iraqi President Jalal Talabani open a ceremonial valve during an event to celebrate the start of oil exports from the autonomous region of Kurdistan, in the northern Kurdish city of Irbil, Iraq, June 1, 2009
FILE - Kurdish president Massud Barzani (r) and Iraqi President Jalal Talabani open a ceremonial valve during an event to celebrate the start of oil exports from the autonomous region of Kurdistan, in the northern Kurdish city of Irbil, Iraq, June 1, 2009
Reuters
Turkey has quietly built up a large presence in Kurdistan's oil and gas industry, teaming up with U.S. major Exxon Mobil, as Ankara bets on Iraq's semi-autonomous republic to help wean it off costly Russian and Iranian energy imports.
 
A state-backed Turkish firm was also set up in the second quarter of 2013 to explore for oil and gas in Kurdistan, according to three sources familiar with the company.
 
The strategy will anger Baghdad, which claims sole authority to manage Iraqi oil, and runs counter to calls from Washington for Ankara to avoid backing projects that will help the Kurds gain further autonomy.
 
With a ballooning energy deficit that leaves the Turkish economy vulnerable to external shocks and a booming demand for power that is set to keep growing over the next decade, Turkey has been working to cut the costs of its oil and gas imports.
 
Kurdistan's huge energy potential has been hard to ignore, and Turkey's courtship of Iraq's Kurds, a strategy driven by Prime Minister Tayyip Erdogan, is beginning to pay off.
 
“When you have such an energy deficit and you have such a big potential on your border, you can't let Baghdad or anything else get in the way,” said one of the sources familiar with the new state-backed company, a Turkish industry figure close to the deals in Kurdistan. “You have to find a formula and make sure this oil flows through your country.”
 
The Arab-led central government in Baghdad, at odds with the Kurdish-run enclave over control of oilfields and revenue sharing, has repeatedly expressed its discontent.
 
It has warned that independent Kurdish efforts to export its oil could ultimately lead to the break-up of Iraq.
 
But neither calls from Baghdad nor Washington have been enough to deter the Turks, the Kurds or the oil companies. Exxon, Chevron and Total have already signed exploration deals with Kurdistan.
 
Semi-state oil firm TPIC and state pipeline operator Botas have stakes in the new state-backed company, which has entered a dozen exploration blocks in Kurdistan, including several fields where Exxon is already present.
 
It is also negotiating a gas purchasing deal with Kurdistan, said the sources familiar with the company. Exxon Mobil declined to comment for this story.
 
Turkey's ambition to play a bigger role in Iraqi Kurdistan's energy prospects comes at a time when it is also negotiating a fragile peace process with Kurdish militants on its own soil to end a three-decade-long bloody dispute.
 
Divided mostly between Iran, Turkey, Iraq and Syria, the Kurdish people are often described as the largest ethnic group without a state of their own.
 
Link-up in Turkey
 
Turkey's involvement also stretches to a new KRG pipeline that is almost complete and will allow the Kurds to export their crude from the Taq Taq oilfields straight over the border to Turkey without having to wrangle with Baghdad over payments.
 
The pipeline will link with the existing Kirkuk-Ceyhan pipeline on Turkish soil, rather than in Iraq, thus bypassing Baghdad, according to the latest plans.
 
Last year, Kurdistan stopped exporting 200,000 barrels per day (bpd) of crude through Iraq's federal pipelines due to a revenue-sharing dispute and instead started trucking smaller amounts of oil to Turkey.
 
The semi-autonomous region has ambitious plans to raise exports to more than one million bpd by the end of 2015 or over one percent of global supplies.
 
The sources say the pipeline is almost complete and will start pumping around 200,000 bpd at the end of the year. Turkey consumes around 700,000 barrels of oil daily.
 
Gas game
 
OPEC member Iraq's oil may have long been the focus of attention, but for Turkey, gas could have an even greater appeal.
 
Turkey is set to overtake Britain as Europe's third biggest power consumer in a decade. It buys natural gas from Russia, Iran and Azerbaijan and liquefied gas from Nigeria and Algeria  for use mainly in power generation.
 
“For Turkey, securing natural gas from fields in northern Iraq, where Turkey will also be a partner, is of utmost importance. There has been big progress on this issue,” said one of the three sources, a Turkish official close to the talks.
 
Two of them said the state-backed Turkish company was looking to finalize gas purchasing deals with KRG in the coming months.
 
KRG Energy Minister Ashti Hawrami said this year Kurdistan was planning to export the first gas to Turkey by 2016.
 
About a dozen Turkish private companies have applied to Turkey's energy watchdog EPDK to obtain a license to import gas from Iraq. Turkey's daily gas demand stood at 125 million cubic meters in late 2012 and is likely to rise to nearly 220 million during the harsh winter months, energy ministry officials say.
 
“It is actually a gas game. The main reason why Turkey is taking this political risk in Iraq is because of the appealing gas resources,” said the industry source.

You May Like

In China, Mixed Signals on Ebola Controls

How authorities are monitoring at-risk individuals remains unclear, including whether there are quarantines for Chinese health workers returning from West Africa More

Video Women Voters Anxious Ahead of US Elections

Analysts say if women are focused on national security, it could be bad news for Democrats More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Women Voters Anxious Ahead of US Electionsi
X
October 31, 2014 4:10 AM
Public opinion polls show American voters are deeply dissatisfied with their government and anxious about threats from abroad. This is especially true for a key voting group both Republicans and Democrats are trying hard to win over: women. Analysts say if women are focused on national security, it could be bad news for Democrats, with majority control of the Senate at stake. VOA’s Cindy Saine looks at the crucial role women voters will play in deciding the elections.
Video

Video Women Voters Anxious Ahead of US Elections

Public opinion polls show American voters are deeply dissatisfied with their government and anxious about threats from abroad. This is especially true for a key voting group both Republicans and Democrats are trying hard to win over: women. Analysts say if women are focused on national security, it could be bad news for Democrats, with majority control of the Senate at stake. VOA’s Cindy Saine looks at the crucial role women voters will play in deciding the elections.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.