Turkey’s dramatic shift toward Iraqi Kurdistan: Politics before peace pipelines

 In the summer of 2003, NATO’s two largest militaries nearly came to blows in northern Iraq. On July 4 in the city of Sulaymaniyah, soldiers of the U.S.’ 173rd Airborne Brigade apprehended, handcuffed and placed hoods on the heads of a group of Turkish special forces troops who were operating out of uniform. Turkey’s government and society were outraged, claiming their U.S. ally had humiliated them by treating some of their most elite soldiers as terrorists. U.S. military leaders felt fully justified in arresting soldiers whom they believed were preparing to assassinate an Iraqi Kurdish official. An intense downward spiral in U.S.-Turkey relations followed in 2004 with the publication of the xenophobic novel “Metal Storm,” which depicts a Turkish nuclear strike on Washington in response to a U.S. military attack to divide Turkey between Greece and Armenia.

This diplomatic debacle between two stalwart NATO allies reflected deep divisions in their approaches to northern Iraq. For the United States, the Kurdish area was Iraq’s only outpost of relative stability. Washington worried that Ankara was working to shift the political balance there toward Turkomans and away from the ethnic Kurds. Worried it lacked sufficient troops to defeat the insurgency raging in the south of the Kurdish Region of Iraq (KRI) and tackle the Kurdistan Workers’ Party (PKK) in the North, the Pentagon dragged its feet in fulfilling President George W. Bush’s promise to Prime Minister Recep Tayyip Erdoğan to eliminate the PKK safe haven in northern Iraq. U.S. officials also worried that any military action against the PKK could reignite the armed conflict of the mid-1990s among various Kurdish factions, as well as between Kurds, Sunnis and Shiites. Meanwhile, some U.S. politicians viewed Iraqi Kurds as more reliable partners than Turkey in stabilizing Iraq.

In Ankara, such opinions fed Turkish paranoia about Washington’s intentions. At best, Washington seemed to be disregarding Turkey’s top security concern.

Under these circumstances, any notion of partnering with Iraqi Kurds to develop northern Iraq’s massive oil and gas resources was politically impossible for Ankara.

Against this backdrop of potential military conflict between the U.S. and Turkey over their divergent approaches to Iraqi Kurds, Turkey’s dramatic shift in tone on May, 20-21, 2012 in Arbil at the first-ever international conference on oil and gas in the Kurdish Region of Iraq (KRI) was shocking.

During 2003-4, Ankara would have objected vehemently to any such event as a provocation aimed at fomenting Kurdish separatism to split apart Iraq and then Turkey. But, by May 2012, at the conference in Arbil organized by Turkish energy NGO STEAM, Turkish Energy Minister Taner Yıldız referred glowingly to strategic partnership between Turkey and the KRG, and called for close cooperation in developing the KRI’s oil and gas resources and exporting them via Turkey.

KRG Energy Minister Ashti Hawrami and international oil company representatives ticked off impressive statistics describing the KRI’s enormous untapped oil and gas reserves, most notably the U.S. Geological Survey’s estimates of 45 billion barrels of oil and 1 billion to 3 trillion cubic meters (TCM) of gas.

Recognizing this great investment potential, ExxonMobil, Chevron and Total have signed deals during the past year with the KRG to develop major fields in the KRI. Baghdad has retaliated by excluding ExxonMobil and Chevron from the latest round of oil field tenders outside the KRI. And, in early August 2012, two weeks after Total announced on July 31 its oil exploration agreement with the KRG, Iraq’s federal government issued Total an ultimatum: either choose cooperation with Arbil or maintain its investment in southern Iraq’s Halafaya field. Such threats from Iraq’s central government have not deterred these supermajors from partnership with the KRG.

This evolution in Turkey’s position was motivated in part by economic considerations. Turkish banks, construction companies, and energy brokers stand to profit from massive investments in the KRI’s energy infrastructure and from energy trade.

Ankara’s political ambitions have played an even greater role than economic factors in reversing its approach to the KRI. Ankara aims to elevate Turkey’s geopolitical importance by attracting natural gas from the KRI into the Southern Corridor, and elevate Turkey’s strategic significance as an energy transit hub for Europe, the Caspian, and the Middle East.

These geopolitical ambitions for Turkey to become a trans-regional energy hub were insufficient to prompt Ankara’s dramatic and positive shift toward Arbil. After all, northern Iraq’s huge energy reserves have been anticipated by Ankara for decades. Ankara was able to conceive of the KRI’s energy assets as a strategic benefit only with a change in political thinking toward Iraqi Kurds.
The shift in Ankara’s approach toward the KRG accelerated with the arrival of Ahmet Davutoğlu as foreign minister in May 2009.

Even before Davutoğlu moved from his position as the prime minister’s foreign affairs advisor to become foreign minister, a tight group of senior U.S. and Turkish diplomats began strategizing discreetly in fall 2008 on the steps required to facilitate future exports of oil and gas from the KRI to Turkey.

Despite strong economic justification for the projects under consideration, Iraqi politics were not ready for them. No senior Iraqi energy official ever participated in our trilateral working group on natural gas – though we did receive encouragement from ethnic Kurdish officials in Iraq’s federal government.
It became clear during the Arbil energy conference in May 2012 that regardless of the U.S.’ position, Ankara and Arbil now perceive their political interests as synchronizing with their longstanding economic interests. Yıldız repeatedly underscored the Turkish government’s support for investment by Turkish companies in the KRI’s energy sector, stressing the historic and strategic significance of linking northern Iraq’s Kurds with their Turkish neighbor and onward with European markets.

Northern Iraqi leader Masoud Barzani and Hawrami suggested they hoped the KRG and Baghdad could resolve their differences on energy policy. Arbil realizes that for years to come, the 17 percent of all of Iraq’s oil export revenues to which the KRG is entitled under Iraq’s Constitution will far outweigh revenues from KRI energy exports via Turkey. Failure to reach a common vision on development and revenue sharing from the KRI’s energy resources risks heightening political tensions between Arbil and Baghdad. Baghdad’s continued pressure on Arbil could lead the KRG to a point of no return in its energy connections with Turkey, and thereafter, to the loss of all of Baghdad’s political control over its crucial northern province. These political considerations are prompting Ankara to move prudently in implementing its bold shift toward Iraqi Kurds. Ankara realizes its political shift has emboldened Arbil to work more actively to attract large-scale international investors.

Yet before the KRI’s economy takes off, Turkish and KRG authorities must still take a series of bold political decisions either to accommodate or confront Iraq’s federal government in Baghdad, with confrontation risking renewed sectarian violence that, in a worst case, could realize Turkey’s greatest fear: the breakdown of Iraq’s territorial integrity and emergence of an independent Kurdistan that would fuel Kurdish separatism in Turkey.

A major determinant of the KRI’s future course may lie more in the politics of Ankara and Damascus than Baghdad. If Syria breaks apart and an autonomous Kurdish region emerges that favors pan-Kurdish unity, Ankara may feel a need to rethink its political decision to hold Iraqi Kurds close as economic partners. What is clear as of late August 2012 is that political factors will ultimately determine whether Turkey’s historic cooperation with Iraqi Kurds on energy will continue. Commercial momentum will provide a strong incentive for Ankara’s collaboration with Arbil to continue; but, ultimately, politics, not “peace pipelines,” will determine the future of Turkey’s relations with Iraq’s Kurds and whether Iraq enjoys an historic new Euro-Atlantic vector in its geopolitical orientation.

Ambassador Matthew J. Bryza is the director of the International Centre for Defence Studies in Tallinn. A full version of this article was originally published in the Summer 2012 issue of Turkish Policy Quarterly (TPQ).