Iraq warns Kurdistan against striking oil
deal with Turkey
By Palash R. Ghosh - The International Business
May 21, 2012
Kurdistan Regional Government Natural Resources
Minister Ashti Hawrami (R) speaks with Turkish
Energy Minister Taner Yildiz during a joint news
conference in Erbil, Kurdistan region of Iraq on May
20,2012. Photo: Reuters
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BAGHDAD,— The central government of Iraq
warned the Kurdish-ruled semi-autonomous Kurdistan
region of northern Iraq that it must obtain
Baghdad’s approval for any oil export deals signed
On Sunday, Iraqi Kurdistan unveiled an agreement to
sell oil through Turkey into the international
markets, thereby leaving Baghdad completely out of
the loop. The Kurdish oil minister Ashti Hawrami
said Iraqi Kurdistan will construct a huge 1 million
barrel per day pipeline over the next 12 months
through which oil and gas will be carried through
"We envisage the building of a new pipeline taking
Kurdistan’s oil, particularly the heavier component
part to Cihan," Hawrami said at a conference with
Taner Yildez, the Turkish energy minister.
Baghdad believes such an arrangement contravenes
Iraqi laws, while Kurds assert they can sign any
contract regarding their natural resources according
to the terms of the constitution.
Since 2003, the Kurds have entered into dozens of
gas and oil deals, all of which have been classified
as “illegal” by the authorities in Baghdad, who have
also blacklisted the companies involved, including
Exxon Mobil Corp. (NYSE: XOM), from doing business
in Iraq’s southern oilfields.
"We have no problem with any deals, but they have to
be according to the Iraqi constitution and laws that
govern relations between Baghdad and the Kurdish
region," said Ali al-Moussawi,www.ekurd.net
an adviser to Iraqi Prime Minister Nouri al-Maliki.
Earlier this, the Kurds and the central Iraqi
government entered into a deal under which Kurdistan
would transport its oil to Baghdad, which would then
sell it on the international market (with each side
taking half of the revenue). However, in April, the
Kurds cancelled this agreement, citing a payment
dispute with Baghdad.
But Hawrami insisted that there is no distinction
between Kurdish oil and Iraq oil.
"When we say oil from Kurdistan, it’s Iraqi oil,"
"There is no difference between Iraqi oil or Basra
oil from Kurdistan."
A pact between Iraqi Kurdistan and Turkey was
"If you look at Turkey, which is the second-fastest
growing country in the world, its gas needs which
increase significantly every year and then the price
of oil, I think people realize that Turkey is
looking to Iraq -- particularly the Kurdish regional
government -- very carefully because of economics,
not because of politics," Mehmet Sepil, chairman of
Turkey’s Genel Energy, told al-Jazeera.
Iraq is now Turkey’s second biggest trade partner,
although most of that trade is with the Kurdish
According to the Kurdish government, there are about
143 billion barrels of proven oil reserves in the
south of Iraq, while the northern (Kurdish)
semi-autonomous region has about 45 billion
Meanwhile, any deals with Turkey will likely worsen
already tense relations between Ankara and Baghdad.
Maliki of Baghdad was also outraged recently when
Turkey’s Prime Minister Recep Tayyip Erdogan hosted
Tariq al-Hashemi, the Iraqi vice president who had
been issued an arrest warrant by Baghdad for
allegedly forming death squads. Hashemi has since
escaped to Iraqi Kurdistan for refuge.
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