Turkey resolves energy crisis with Baghdad

Turkey has reached an agreement with Baghdad, following disputes over Ankara's plans to export oil from Iraqi Kurdistan.

al-monitor Turkey's Energy Minister Taner Yildiz speaks at the Iraq-Kurdistan Oil and Gas Conference, Erbil, Dec. 2, 2013. Photo by REUTERS/Azad Lashkari.

Topics covered

recep tayyip erdogan, pipeline, oil, nouri al-maliki, nechirvan barzani, massoud barzani, kurdistan regional government, iraqi kurdistan

Dec 4, 2013

Turkey’s energy diplomacy has borne results. The oil crisis was resolved when Baghdad was offered a measurement station and revenue payment guarantees. In this regard, a trilateral Baghdad-Ankara-Erbil mechanism will be set up.

Turkish Energy Minister Taner Yildiz told Baghdad officials to be at ease because the process was transparent. The Baghdad government then validated the agreements between Turkey and northern Iraq and sat at the table.

Worries eliminated

In the talks, Turkey took a clear stand about the measurement station, which will address Baghdad’s main concerns. Prime Minister Recep Tayyip Erdogan gave instructions to eliminate Baghdad’s biggest concern before starting oil exports from northern Iraq and asked for the completion of the measurement station at the border for oil and natural gas exports. Ankara emphasized that oil revenues would be shared according to the provisions of the Iraqi constitution. Baghdad was told that they would know the exact amount of oil exported. Ankara reiterated its decision to deposit oil revenues in a Turkish state bank and then share them under the supervision of an Iraqi government auditor.

"We are fully transparent"

Energy Minister Yildiz, who delivered vital messages to Baghdad, told Deputy Prime Minister Hussein Sharistani that Turkey was fully transparent in this process. Yildiz noted that the agreements reached with Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani during his Ankara visit were to the benefit of all concerned parties and that Ankara wanted to improve relations with Iraq. Yildiz said Prime Minister Erdogan was paying serious attention to his proposed visit to Iraq and that Ankara was looking forward to a visit by Iraqi Prime Minister Nouri al-Maliki as soon as possible.

Trilateral mechanism to be set up

Yildiz also had meetings with KRG President Massoud Barzani, Nechirvan Barzani and other officials. Yildiz said, with Barzani and Nechirvan, that they worked on a joint declaration to be issued. Reading from the text written in Arabic, English and Turkish, Yildiz said, "We wish to receive the consent of the Iraqi central government for commercial export of oil from the Iraqi Kurdistan Regional Government to Turkey and to launch a trilateral cooperation project that will serve all the parties. We can easily start the meetings on the mechanism at Erbil, Baghdad or Ankara."

We will not sit idle

Yildiz, replying to questions by the news site Rudaw, known to be close to Barzani, said Turkey did not want temporary relations with the Iraqi Kurdistan region and hoped to preserve relations with the same degree of warmth. Yildiz added, "To be blunt, Turkey does not intend to sit idle about energy resources so close to its territory. Iraq will benefit from the stability of Turkey, which should not be a surprise. The 15-year agreement foresees exports of at least 1.5 million barrels of oil daily through the Kirkuk-Yumurtalik pipeline."

7–8 million barrels

Yildiz underlined the importance of keeping the process moving without disruptions, with the full consent of the parties. “God willing, we will see the day when oil and natural gas exports will reach 7–8 million barrels. We see Iraq as an integrated whole that can’t be broken apart. The agreements we made with northern Iraq and the central government will contribute significantly to the normalization of Iraq."

Barzani: No reason for any fear

Nechirvan Barzani, the KRG prime minister, who attended the Kurdistan-Iraq Oil and Natural Gas conference at Erbil, said, "The energy agreements we reached with Turkey, signifying the beginning of a new Iraq. There is no reason for any fear. All our discussions and negotiations are carried out on legal premises."

Yildiz also met with the president of the KRG, Massoud Barzani, to discuss the recent developments in oil accords and relations between Iraq, the KRG and Turkey. Yildiz also met with KRG Minister of Natural Resources Ashti Avrami and Minister of Electricity Sheikh Abubakir Yassine.

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