Kurdistan Region Announces Plans for Second Oil Pipeline to Turkey


by HEVIDAR AHMED RUDAW – 22.5.2013 – ERBIL, Kurdistan Region – Iraq’s Kurdistan Region intends to build a second pipeline for oil exports to Turkey, following Ankara’s agreement with US oil giant ExxonMobil for joint oil exploration in the autonomous enclave, an oil official in Erbil said.

Ali Balo, oil advisor in the autonomous Kurdistan Regional Government (KRG), said that the pipeline would daily export 500,000 barrels of heavy crude – requiring special buyers – from oil fields in the districts of Akre, Shekhan and Bardarash.

He said that would be in addition to another oil pipeline into Turkey, with a daily capacity of 400,000 barrels, that has been nearly completed. “That project is scheduled to finish soon. It has less than 20 kilometers to reach Turkey,” said Balo, who works at the KRG’s Ministry of Natural Resources.

The breakthrough announced by Balo follows a visit to the United States by Turkish Prime Minister Recep Tayyip Erdogan, and his announcement of joint exploration deals in the Kurdistan Region with ExxonMobil. “The KRG has decided to install the second pipeline into Turkey that is capable of exporting 500,000 barrels of crude oil per day,” following Erdogan’s US visit, Balo confirmed. “The giant petroleum company ExxonMobil and the Turkish government have reached an agreement on oil production in the Kurdistan Region,” he added.

“Erdogan’s statement was not a surprise as Turkey has been working on this matter for the past two years,” Balo told Rudaw. “Turkey has ambitions to become one of the world’s economic powers, and that ambition demands a large amount of energy,” Balo added. “Erdogan himself adopted the policy to work with the Kurdistan Region to export oil through his country.”

The announcement of the second pipeline, and that ExxonMobil has decided to work with Turkey on oil exploration in the landlocked Kurdistan Region, is a setback for Baghdad.

The Shiite central government has long maintained that all oil deals in the autonomous enclave should go through Baghdad, and that any direct agreements with the KRG are illegal.  But the KRG insists that the constitution allows independent oil exports, and accuses Baghdad of not paying the operating costs for oil companies working in the region.

Until now, Washington has leaned toward Baghdad’s argument, discouraging the KRG from direct oil deals on grounds that more economic independence would encourage the Kurds in their ambitions to declare an independent homeland, leading to Iraq’s division. Balo argued that Erdogan’s statement regarding Turkey’s oil deals with the KRG is the message to Baghdad that the deals are legal and transparent.  He said that the goal behind the agreement between Turkey and ExxonMobil was to bring the US on board. “Four months ago, a delegation from the Turkish government went to Washington to convince the White House officials to support the KRG exporting oil through Turkey,” Balo said.

“ExxonMobil is a giant American oil company which has economic benefits for the US. That is why, after the Turkish delegation’s visit to the White House, Turkey and ExxonMobil signed an agreement allowing the American oil companies to have a share in the oil deals,” Balo explained.

ExxonMobil first signed oil deals with the KRG in November 2012, which encouraged other large concerns, such as Chevron and Russia’s Gazprom to follow suit. Balo said that Turkey would not receive discounted oil   “Turkey has to pay the same amount as the other recipient countries. It still benefits from the deals as Kurdistan is a close source of energy for the country,” he added. The Kurdistan region’s oil reserves are estimated at around 45 billion barrels, but Balo said that was expected to rise to 70 billion barrels. More than 50 oil companies have signed oil deals with the Kurdistan Region. Balo expressed doubt that Erbil and Baghdad would resolve their energy dispute anytime soon. “An agreement on the issues, including oil issues, between Baghdad and Erbil was signed last month. Soon after, Baghdad officials said what was signed was not an agreement, but a decision to create committees to resolve the issues,”  Balo said.

He said that if Baghdad continues to ignore resolving the issues, then KRG has no choice but to continue exporting oil without seeking Baghdad’s consent.Balo said that Baghdad was failing to honor agreements to provide refined fuel to the Kurdistan Region, complaining that the government was not even providing half the seven million liters of gas needed per day. The Kurdistan Region’s oil refineries currently produce only 1.3 million liters of gas per day, but that is expected to rise to nearly four million liters a day in the near future, he said.