No decision reached in building 2nd pipeline from Arbil
Talks between Turkish Prime Minister Recep Tayyip Erdogan and Iraqi Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani didn't end on Wednesday with concrete results on the construction of a new oil pipeline from Kirkuk Today`s Zaman reported.
Sources close to the Prime Ministry said there are still problems with some technical details that need to be solved, particularly concerning the share of revenues gained from the oil trade.
The meeting was also attended by Turkish Minister of Energy and Natural Resources Taner Yildiz, Minister of Development Cevdet Yilmaz, KRG Deputy Prime Minister Imad Ahmad and KRG Natural Resources Minister Ashti Hawrami.
A preliminary deal over the construction of this pipeline was reached several months ago, but sources close to the deal say the Turkish side is waiting for the visit of Iraqi Prime Minister Nouri al-Maliki before concluding it. The visit is expected to take place in December.
Erdogan and Barzani's meeting lasted nearly three hours on Wednesday. There was no press conference afterward, but according to Prime Ministry sources the two statesmen exchanged views on regional problems as well as on ways to improve bilateral relations between Turkey and the autonomous Kurdish administration. The two also talked about the opening of two new border gates.
The same sources said the Turkish prime minister reiterated his oft-spoken desire to maintain and improve relations with all segments of Iraq's fragmented society for the sake of contributing to the country's stability and prosperity.
Turkey has recently attempted to thaw its frosty relations with the Baghdad government through a series of diplomatic attempts. The initial step was taken after al-Maliki delivered a message that his government "wants to improve relations with Turkey again," which was followed by a visit from the head of Turkish Parliament's Foreign Affairs Commission, Volkan Bozkir.
Iraqi Foreign Minister Hoshyar Zebari was in Turkey last month and held talks with President Abdullah Gul, Erdogan and Foreign Minister Ahmet Davutoglu. "It is high time to close this page and open a new one," he said after these talks. "Although there are differences of opinion on some issues, there aren't any problems that cannot be solved between us," Zebari said in a joint press conference with Davutoglu.
Recently, the Turkish foreign minister visited Baghdad, returning with warm messages after his talks with top-ranking Iraqi state officials. Parliament Speaker Cemil Cicek's visit on Nov. 25-26 also was an effort to contribute to the amelioration of mutual ties between the two neighbors.
Although both sides seems to be making strides to calm down tension and reinstitute the long-derailed relations between Ankara and Baghdad, there are still some ambiguities that need to be cleared. The central administration is at odds with the northern Kurdish autonomy over the exploitation and exportation of the region's rich oil and gas resources. Ankara is trying to keep a foot in both camps. KRG President Massoud Barzani was in Turkey a couple of weeks ago, addressing the masses in Turkey's Kurdish-populated Diyarbakir with Erdogan and calling for regional peace. Turkey is planning to host al-Maliki in Turkey soon and convene the High-Level Strategic Council between the two countries' cabinets for the second time.
Sources noted that Erdogan wants to return a visit to al-Maliki after the council meeting and even extend it to include Kirkuk.
Oil flow may start next month
After landing at Ankara's Esenboga airport on Tuesday evening, Barzani told reporters that oil exports to Turkey from northern Iraq may start as early as December this year, but he avoided divulging any further details. A KRG-sponsored oil pipeline, which is almost complete, will link up to an existing Iraq-Turkey pipeline. The new oil pipeline is expected to have an initial capacity of 400,000 barrels per day (bpd). The amount will rise to 1 million bpd per day in 2015 and 2 million bpd in 2019, in line with the increases in the production capacity. The Kirkuk fields, which are under Baghdad's control, are sending around 400,000 bpd through the existing Kirkuk-Ceyhan pipeline, far less than its capacity for 1.6 million bpd.
Turkey's endeavors to strengthen relations with Arbil are perceived as efforts to diversify its energy resources, but its rapprochement with Iraqi Kurds has infuriated Baghdad, which sees the KRG control over hydrocarbon resources as unconstitutional and doubts that its control over the oil and gas fields may pave the way for an independent Kurdish state. Iraq's constitution indicates that oil export revenues belong to the central government and the autonomous Kurdish region is entitled to 17 percent of that total.
Iraqi Kurdistan is cooperating with firms including ExxonMobil, Chevron and Total to develop its energy industry. Turkey is also on the field with its state-backed Turkish Energy Company (TEC) in partnership with Exxon.
But as Kurdish output grows, with several new fields coming online this year and next, a second pipeline will be needed.
"The second pipeline will be mainly for the heavy oil that will come from the northern fields. Taq Taq and Tawke crude is very high quality and blending the two grades would depreciate the value of both crudes," the source close to the deal said.
Turkish state pipeline company Botaş will be instrumental in building the second pipeline, a government source said. A private Turkish company is also interested in the project.
The new pipeline will have a capacity of at least 1 million bpd of crude oil, KRG Minister Hawrami said in İstanbul last week. The exports will be metered independently, he said, inviting all parties -- including Baghdad -- to send auditors to observe the process.
Revenues will be paid into KRG accounts, a source familiar with the plans said. Hawrami repeated that the KRG is ready to send 83 percent of its oil income to Baghdad after deducting the autonomous region's share. But Baghdad views such plans as illegal.