Iraq expels TPAO from energy deal

ISTANBUL / BAGHDAD

A worker adjusts a pipe at the Nassiriya oilfield in Nassiriya, Iraq. The Iraqi government is having problems with the international companies active in southern oilfields.

Iraq has expelled Turkey’s state-run TPAO from an exploration deal in the south of the country, an oil ministry official said yesterday, in the latest sign of worsening ties between the two countries. This came only one week after a crucial deal between Ankara and Baghdad on oil exploration in southern Iraq.

The exploration deal was for a tract of land in the oil-rich Basra province and had been awarded in May to Kuwait Energy, TPAO and Dragon Oil of the United Arab Emirates, Agence France Presse reported yesterday.

“For reasons to do with non-technical issues and outside the responsibility of my office and me personally, the Turkish company TPAO was excluded from the consortium,” said Abdul Mehdi al-Amidi, head of the oil ministry’s contracting and licensing department. Amidi did not comment on why TPAO was expelled, but the decision comes amid icy ties between Iraq and Turkey.

The Iraqi Prime Minister is opposing use of its airspace by the Turkish military in its fight against the outlawed Kurdistan Workers Party (PKK) and the KRG’s direct oil exports to Turkey. In addition, Baghdad protested against an August visit by Turkish Foreign Minister Ahmet Davutoğlu to Kirkuk, a disputed city in northern Iraq, without the central government being informed in advance.

Iraq has also publicly urged Turkey to hand over fugitive Vice President Tareq al-Hashemi, who has been sentenced to death in Baghdad on charges of running a death squad.

“This decision is final, there is no approval to sign the contract for Block 9,” he said, referring to the exploration block in southern Iraq. “The decision (to expel TPAO) is from the cabinet.” Amidi said the contract included provisions allowing companies’ shares to be sold to others and raised the possibility that Kuwait Energy would take over TPAO’s stake, increasing its share to 70 percent in the consortium, with Dragon Oil retaining the remaining 30 percent.

The three-member consortium originally won the oil exploration contract for the block in a May 30-31 public auction in which they agreed to be paid a service fee of $6.24 per barrel equivalent extracted.

Turkey sees no problem

Turkey will continue with its Iraqi projects, Energy Minister Taner Yıldız said while responding to journalists during a wind energy meeting in Istanbul yesterday. “We meet the decision with respect,” Reuters quoted him as saying.

“We will continue supporting normalization in Iraq’s north, south, east and west. If they have any demand from us, I would like to mention once again that we will not remain deaf to that.”

Yıldız said Turkey has joint projects in Iraq with Russia, South Korea and Kuwait. “This was one of those projects. We will continue with our way.”

Turkey and Iraq signed a $350 million contract with Iraq on Nov. 1 for 40 drills in the south.

Amidi’s statement came as Iraqi officials signed a deal yesterday with Russia’s Lukoil and Japan’s Inpex to explore a 5,500-square-kilometer tract of land believed to contain oil in southern Iraq.