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

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
African Media Tries to Educate Public About Ebolai
X
George Putic
August 20, 2014 8:57 PM
While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls For Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.