The Iraqi Supreme Court’s Feb. 15 ruling that proclaimed Iraqi Kurdistan’s oil and gas law unconstitutional has cast a shadow on Turkish President Recep Tayyip Erdogan’s hopes to buy gas from the autonomous region, coming atop an arbitration case over Ankara’s oil trade with the Iraqi Kurds that bypasses Baghdad. Counting on his political and economic leverage, Erdogan might ignore the court ruling, just as he has maintained the oil trade, ignoring the prospect of Baghdad winning the arbitration case. Yet the gas project faces financial and technical snags that Erdogan could hardly ignore.
Turkey’s access to Kurdistan’s energy resources dates back to the days when the United States prepared to invade Iraq and the Iraqi Kurds sought out energy investors, convinced that Saddam Hussein’s rule would be over soon. During a trip to Ankara in March 2002, Jalal Talabani, the late Iraqi Kurdish leader who at the time headed the Patriotic Union of Kurdistan, met with Mehmet Sepil, the owner of Turkish construction company Epik. Sepil, whose experience was limited to construction projects at US and NATO bases, was caught off guard when Talabani offered him the development of the Taq Taq oil field, predicting big profits for early investors. Sepil partnered with Mehmet Emin Karamehmet, the owner of Turkey’s Cukurova Holding, to set up Genel Energy, which soon commenced operations at Taq Taq under a production-sharing contract.