Turkey – KRG energy deal to go ahead with or without Baghdad’s consent

The Atlantic Council summit that gathers representatives of the energy community active in this part of the world took place last week in İstanbul, just as it did last year around this time. And just as the case was last year, it will be followed by the Kurdistan-Iraq oil and gas conference which will take place on Dec.2 in Erbil.

Last year, the Atlantic Council summit’s agenda was dominated by the anticipation that an agreement was about to be announced between the Kurdistan Regional Government (KRG) and the Turkish government on the purchase and transfer of Iraqi-Kurdish oil to Turkey. Some of the Americans present were clearly concerned about such a prospect taking place in the absence of Baghdad’s consent. The U.S.’s former envoy to Ankara, James Jeffrey, strongly criticized the increased cooperation between Turkey and the KRG, warning that there could be negative consequences to a deal in the absence of approval from Baghdad. It was interesting to hear a former US official express worry over steps taken by Turkey that could potentially divide Iraq.

A few days later, Turkey’s Energy Minister Taner Yıldız’s plane, which was taking the minister and his delegation to the conference in Erbil, had to adjust its flight path by making a detour due to an obstruction from the Iraqi central government.

Yıldız is again expected to attend this year’s conference in Erbil. If he has decided to go, this means he is confident there won’t be a similar reaction coming from Baghdad.

In fact the change in the mood made itself felt during this year’s Atlantic Council meeting which was attended by U.S. Secretary of Energy Ernest Moniz, who used a much softer rhetoric about a possible deal between Turkey and the KRG.

So what has changed?

The answer changes according to the respondents. “Our position has not changed,” a U.S. official told me. The U.S. has never been against a deal between the KRG and Turkey, however, it was against such a deal that did was sealed without gaining Baghdad’s approval, according to that official.

It is very difficult for the outgoing Iraqi parliament to strike a consensus over an oil and gas law, which would solve the dispute between the KRG and central governments. In the absence of such a law, Turkey, the KRG and the Iraqi central government are expected to come to an agreement on the issue of revenue sharing, with dialogue seeming to have intensified recently. The US official expressed optimism over the possibility of bridging differences in a short time.

Some other observers, however, believe that stakeholders are under pressure with developments on the ground to be persuaded that Turkey and KRG will go ahead in any case and that includes Washington and Baghdad.

“The construction of the pipeline that will carry KRG oil to Turkey is complete,” a highly informed source told me, recalling KRG head Massoud Barzani joining Turkey’s Prime Minister Recep Tayyip Erdoğan in his historic visit to Diyarbakır a few weeks ago.

 “If one of the messages Erdoğan wanted to give to Barzani by inviting him to Diyarbakır was that Turkey was not doing a deal with the (outlawed Kurdistan Workers’ Party) PKK at his expense, the other one was to show to Turkey’s Kurds that Barzani was on his side,” he said, adding “Would Barzani come to Diyarbakır if he was not sure that the energy deal will go ahead?”

Yet one should not forget Ankara’s efforts to mend ties with Baghdad, which resulted in the visit of Iraqi foreign minister Hoşyar Zebari to Ankara last month, followed by Yıldız’s meeting with his Iraqi counterpart, Hussein al-Shahristani, at a summit in South Korea.

“Ankara wanted to show that it did its best and tried to strike an understanding with Baghdad. But the oil will start flowing with or without it,” an energy expert told me, as Yıldız is expected to officially announce the agreement between Turkey and the KRG next week in Erbil.

One still hopes that Turkey remains genuine in its efforts to improve relations with Baghdad in general. As Egypt joined the list of countries with which Turkey is cross with, and this time for sure, it should continue efforts to get Iraq off of that list.