All is not well in northern Iraq’s oilfields

Iraq’s Kurdish region has grown closer to Turkey and begun exporting oil to world markets, angering Baghdad.

Flared gas burns at the Kirkuk oil field
The rich oil fields surrounding Kirkuk are disputed by Baghdad and the Kurdistan Regional Government [AFP]

In northern Iraq, ethnic Kurdish security forces called peshmerga patrol the poorly defined border of the country’s Kurdish region, with clear orders to keep Iraqi army troops out.

“Everyone here is on alert,” Al Jazeera’s Omar al-Saleh reported from near the internal border on January 17. With both sides fully armed, he said, “any mistake could lead to a violent conflict”.

Iraqi Prime Minister Nouri al-Maliki claims the right to freely move soldiers anywhere in the country, but the country’s semi-autonomous Kurdistan Regional Government (KRG) says this is unconstitutional.

As in so many other conflicts around the world, the presence of oil is raising the stakes and the tensions. Iraq’s ethnic Kurdish region is so oil-rich that in some places, the stuff literally oozes out of the ground.

The KRG is using this oil to flex its political muscle and its growing independence from Baghdad: Earlier this month, a truck laden with crude oil from Iraq’s Kurdish region delivered its wares to the Turkish port of Mersin, on the Mediterranean Sea – marking the first time that the KRG has exported oil directly to world markets.

Going around Baghdad

“Big Oil loves Iraqi Kurdistan – compared to Baghdad,” energy expert and journalist Pepe Escobar told Al Jazeera. The region’s oil bounty and a friendly investment climate have induced major oil companies such as ExxonMobil and Chevron to circumvent Baghdad, inking deals instead with the KRG, which is based in Erbil, about 300km north of Baghdad.

 Disputed region flares tensions in Iraq


Iraq’s embattled central government, already harried by a mass Sunni-led protest movement in the country’s west and centre, is now facing down the KRG’s waxing ambitions as well.

According to Assem Jihad, a spokesman for Iraq’s ministry of oil, exports without Baghdad’s permission are “not legal and not constitutional”.

“The ministry considers any oil exported without the knowledge of the government and the ministry of oil to be smuggled,” he told Al Jazeera. Nor, said Jihad, does the ministry recognise contracts signed without the federal government’s agreement.

For its part, the KRG doesn’t recognise contracts signed without its permission, either: On January 18, it promptly rejected Baghdad’s preliminary plans for British oil giant BP to help develop an oilfield near Kirkuk, a city disputed by the KRG and the central government.

Turkey’s Kurd connection

But as the KRG’s relations with Baghdad fray, it is growing closer to neighbouring Turkey. The Turkish government has fought a low-intensity Kurdish insurgency for decades, and has sometimes launched raids into northern Iraq’s Kurdish areas.

As a result, Turkey and Iraq’s Kurds haven’t always been on close terms: Turkey has historically been “very concerned about the growth of autonomy on the part of the Iraqi Kurds”, worrying that this could encourage its own Kurdish population to seek greater autonomy, said Bulent Aliriza, the director of the Center for Strategic and International Studies’ Turkey Project.

In recent years, though, Turkey has made what Aliriza describes as a “180-degree change” from its previous policy, during which time business between Turkey and Iraq – especially its Kurdish region – has blossomed. According to the Wall Street Journal, the countries did $8.3bn worth of business together in 2011, and many of the companies operating in Iraq’s Kurdish region are Turkish-owned.

Kifah Karim, a Kurdish writer and journalist from Mosul, claims more Turkish politicians are becoming aware that measures such as cross-border raids into Iraqi Kurdistan are “irrational”, in light of the “thousands of business contracts forged with Kurdish companies in the region”.

“There are hundreds of big Turkish companies working in the region,” he told Al Jazeera, “securing billions of dollars for the Turkish government coffers”.

The next step in the relationship could be a new oil pipeline, a plan jointly announced by Turkey and the KRG last year. A pipeline already links Iraq’s Kurdish region with Turkey, but it’s controlled by Baghdad. Last month, the KRG stopped exporting oil through this line after a payment dispute with the central government.

Necdet Pamir, the former deputy general manager of the Turkish Petroleum Corporation and an instructor at Bilkent University in Ankara, argues that the planned pipeline is a bad idea. Whether or not one likes the Iraqi government, he said, Turkey should respect Baghdad’s prerogative.

And a new pipeline built without the cooperation of Baghdad, he believes, would be foolish given the prevailing circumstances. “If there is instability in a region, you cannot construct a pipeline … [and] even if you build it, it won’t operate,” he explained – noting the aftermath of the US invasion of Iraq in 2003, in which he said Turkey lost huge amounts of transit fees when oil ceased to flow through the Iraq-Turkey pipeline.

Baghdad’s not happy

“We don’t support oil exports from any part of Iraq without the appropriate approval of the Iraqi government.”

– Victoria Nuland, US state department spokesperson

Iraq’s central government is not thrilled by the KRG’s growing autonomy, and sees Turkey as an enabler.

Escobar describes the situation between Turkey and Iraq today as an “undeclared war”. Exacerbating the tension, he told Al Jazeera, are the countries’ differing stances on the Syrian civil war, with Turkey staunchly opposing Syrian leader Bashar Al-Assad, and Iraq supporting him.

Turkey has also sheltered Tareq al-Hashimi, Iraq’s former vice-president, against whom an Iraqi court issued a death sentence on charges of leading death squads.

Meanwhile, the United States is also wary of the KRG’s ambitions. “We don’t support oil exports from any part of Iraq without the appropriate approval of the Iraqi government,” stated US state department spokesperson Victoria Nuland last month.

Washington supports Iraq’s central government, and worries that if the KRG pushes too hard, the Iraqi state could be at greater risk of breaking up. Pamir said the US administration also realises that if it aligns itself with the KRG, then Maliki “will be more and more close to the Iranian regime”, which the US is loath to see happen.

But Turkey and the KRG might proceed with building a new pipeline anyways, with or without the blessing of the US, according to Aliriza. “That’s something that the Turkish government is seriously considering.”

Moderating influence?

Although northern Iraq’s energy riches are appealing to Turkish business, some say Turkey may have another motive for drawing closer to Iraq’s Kurds.

“There’s the hope that [KRG President] Massoud Barzani would … perhaps help to solve the Kurdish problem within Turkey by exercising a moderate influence” on Kurds living there, said Aliriza.

There are already indications that this strategy is bearing fruition. The recent announcement that negotiations between Turkey and the leader of the separatist Kurdistan Workers’ Party (PKK) would take place in Erbil, the KRG’s capital – and not in, say, Oslo, where previous talks were held.

This, said Aliriza, “is evidence Turkey is hoping that Mr Barzani would use that influence favourably, positively. It remains to be seen how susceptible the Turkish Kurds would be to the advice of Iraqi Kurds,” he cautioned. “But nonetheless, it is an important factor in the equation.”

Follow Sam Bollier on Twitter: @SamBollier

Source: Al Jazeera