10/12/2012 RUDAW By HEVIDAR AHMED – ERBIL, Kurdistan Region – Genel Energy, a Turkish oil company that has been searching and drilling for oil in the Kurdistan Region for the past nine years and has invested $2 billion in the region’s energy sector, says it is undeterred by Baghdad’s dispute with Erbil over foreign firms investing in the Kurdish energy sector.
Mehmet Sipal, the owner of the company, says that his company is optimistic about Kurdistan’s future. “If we had concerns we wouldn’t have invested that much money in Kurdistan’s oil sector,” Sipal told Rudaw. According to Sipal, who says his company is a Turkish-British firm with its main office registered and based in London, the Kurdistan Region has proven to be an important source of energy for Turkey’s growing economy.
“Turkey is progressing rapidly and it will need a lot of oil,” he says. “And it is proven that the Kurdistan Region has a lot of oil.” Sipal believes that Kurdistan has a decent oil policy, and that the region is now on the world energy map. “This has proven that the Kurdistan Region’s oil policy is successful,” he says.
Genel Energy’s area of operation has been mainly in the Taqtaq area, near Koya.
“My company was the first oil firm to invest in the Kurdistan Region’s oil sector.” Sipal says. “We have not spoken with Baghdad since we came to Kurdistan, because our contract is with the Kurdistan Regional Government (KRG) and we only follow their rules.” The Iraqi government considers most of Kurdistan’s oil contracts illegal, and Iraq’s oil ministry has threatened to blacklist any foreign oil company that deals with Erbil. But the Kurds stress that they are practicing their constitutional rights, which allow any province or region in the country to develop its oil sector independently. Sipal says that disputes between Erbil and Baghdad have not deterred his company from making further investment in the autonomous region.
“During the past six months, we have purchased $1 billion worth of other oil companies’ shares in Kurdistan,” he says. “If we were concerned, we wouldn’t be spending that much money,” Sipal adds.
According to an agreement between Baghdad and the KRG, the central government has to reimburse oil companies the cost of searching for oil in the Kurdistan Region. But for years Baghdad refused to compensate these companies, causing serious disputes with Erbil. However, two months ago the KRG ministry of natural resources and Iraq’s oil ministry signed an understanding whereby Baghdad agreed to release money it owed to foreign oil companies operating in Kurdistan. “This week, my company received its share, which was $320 million,” Sipal told Rudaw. Currently, the Kurdistan Region exports 200,000 barrels of oil per day, and according to Sipal two-thirds of it is extracted by his company, as well as a Chinese and Norwegian company.