Turkey open to pipeline offers from Cyprus, Israel, Iraq

ANKARA - Hürriyet Daily News

Energy Minister Taner Yıldız (C), Daily News Editor-in-Chief Murat Yetkin (L) and Ankara Bureau Chief Serkan Demirtaş are seen during an interview. DAILY NEWS photo, Selahattin SÖNMEZ

Energy-hungry Turkey is open to cooperation with its oil and gas-rich southern neighbors for the exploration and transportation of their hydrocarbon products to world markets via Turkey. It has particularly called out to Israel and Cyprus, which recently had problems over the legality of the licenses issued for petroleum exploration in the eastern Mediterranean. 

“Israeli officials, local officials in Greek Cyprus and representatives of the TRNC [Turkish Republic of the Northern Cyprus], they have all agreed on one reality: The natural gas to be produced from this region will get its utmost feasibility by a pipeline that will pass through Turkey. All relevant figures prove this idea,” Energy Minister Taner Yıldız told the Hürriyet Daily News in a comprehensive interview outlining the Turkish government’s energy policies regarding oil and gas reserves of its southern neighbors. 

Yıldız held substantial meetings with acting Secretary of Energy Daniel Poneman and U.S. President Barack Obama’s special envoy for energy issues Carlos Pascual last week in Washington. The meetings were crucially important as the two allies found themselves on opposite sides on a number of issues related to Baghdad-Ankara tension over the latter’s growing interest in making deals with the Kurdistan Regional Government and to the Turkey-Cyprus quarrel over the Greek Cypriot government’s ambitious moves for oil exploration in the disputed areas of the Mediterranean. 

Although Yıldız underlines that Turkey appears to be the best route for these countries to flow their products to world markets, he is doing his best to show that Turkey is not in a position to abuse its geographical advantage in its potential talks with its neighbors. 

“Turkey does not say ‘Well, you are obliged to pass through our territories, so let’s talk over this.’ It adopts a very realistic approach,” he said. “Instead,” Yıldız continued, “Turkey says it’s open to any sort of projects with the accomplishment of political stability in the region.” 

Opportunity is there: Cypriot reserves 

The political stability the energy minister referred to concerns the decades-old Cyprus problem which could not be solved despite numerous mediation efforts by the United Nations. There are floating ideas that recently discovered oil and gas reserves off the island could set an opportunity for Turkish and Greek Cypriots to resolve their differences and agree on a peace plan. 

“I agree that opportunity is there. But this should have legality,” Yıldız said, adding that the current status of the Greek Cypriot oil explorations in the Mediterranean was illegal as there was no deal among the countries who have coastlines on the definition of economic exclusive zones. 

“When will they become legal? As put by our prime minister, they won’t become legal until these reserves are shared by the entire island. Will works be legal when [reserves are] shared? Yes.” 

‘US confirms Turkey’s rightfulness’ 

The involvement of foreign energy companies from many western countries including the United States makes the situation a little more complicated as Turkey said it would not allow those companies operating on the island to do business in its territories. 

Yıldız said he made clear to his American counterparts the Turkish position regarding Greek Cyprus’s operations and underlined that “We have seen that not only our correctness but also our rightfulness is being confirmed [by the U.S.].” 

Iraqi model for Cyprus

For Yıldız, the position Turkey has adopted in Cyprus’s energy bid is not very different from his stance with regard to northern Iraqi reserves. 

“The reasonableness and consistency of what we are saying about Iraq [with regard its oil and gas reserves] should also be valid for Cyprus. Or vice versa. These two issues are mutually supportive,” he said. 

A growing political stalemate between Ankara and Baghdad under the leadership of Prime Minister Nouri al-Maliki had implications for Turkish companies operating in southern Iraq that pushed Turkey to seek more substantial energy deals with the KRG. 

“Signing a protocol and an agreement are different things. Agreements are inter-governmental,” Yıldız explained while clarifying a recent deal between a Turkish state company and the U.S. giant Exxon for exploring oil in northern Iraq. 

“The idea that state companies cannot make commercial contracts is wrong. They can make them,” he said. Pointing out that 39 companies from 19 different countries had already made similar deals and although central Iraqi government did not recognize them it started to receive 83 percent of revenues out of these projects as a result of their revenue sharing agreement with the KRG, Yıldız said that, “This means an indirect recognition of these commercial contracts.”

Ready to talk with Baghdad

Giving some clues as to how he introduced the situation in Iraq to his American counterparts, Yıldız preferred to use the concept of normalization in Iraq that would help to resolve all standing problems. 
“What’s the goal of Iraq? Increasing its current 2.7 million barrels per day oil production to 7 million.

This is very good. You have oil and gas and you want to use them for your needs. But you cannot. This is abnormal,” he said. The normal thing was to use them and to transport them to world markets, he stressed, adding Turkey was ready to contribute to them. “What’s wrong with that?” asked the minister. 

Washington’s concern was that Turkey’s interest in northern Iraq would cause the division of Iraq, according to Yıldız. “What we have told them is this: On the contrary, Iraq would be divided if we do not show this interest. Iraq would not get divided as long as it becomes normalized. It would be divided if it would become abnormal. We are creating formulas for the normalization of Iraq.”

For Yıldız, an Iraq which would increase its annual revenues up to $300 billion, three times more than current figures, and which would share it accordingly, would not face the risk of partition. 
Yıldız said turkey was ready to discuss these issues with Iraq whenever they requested. 

Turkey’s interest will not go

According to him, Washington well understood Turkey’s position. “They [Americans] have realized that there is nothing abnormal about the point we have arrived at [in the northern Iraq]. What we are discussing [with the U.S] now is legality [of Turkey’s deals] and not their rightness. What we are doing in Iraq is the right thing from the perspective of international relations and of neighborhood. I must confess that the problem of legality will be resolved only after the hydrocarbon law is passed in Iraq.”
Turkey’s interest in doing business in Iraq will not fade away he said, recalling that Turkey’s daily oil consumption was around 750,000 barrels, much higher than that of 22 European Union countries. “I am sorry but if Turkey goes 8,000 kilometers away, to Colombia, to explore oil it will not hesitate to go to 200 kilometer away,” he said. 

Israel: Political feasibility needed

When it comes to cooperating with Israel on its energy projects, Yıldız drew attention to the fact that first there was a need for political feasibility to talk about these projects’ technical feasibility. The minister recalled that there were signs of this political feasibility after Israel apologized to Turkey but he wanted to underline that these projects could never be presented as the reasons for this apology. “They may well be the consequences of this apology,” he stressed.