ERBIL, Kurdistan Region – Turkey’s privately-owned Genel Energy says it stands behind its oil contract with the autonomous Kurdistan Regional Government (KRG), despite political tensions between Baghdad and Erbil over the issue.
“We are very confident in the legality of our contracts. Exxon, Total, Chevron and Gazprom share our confidence in their contracts and the prospects of the KRI (Kurdistan Region of Iraq),” a Genel spokesperson told Rudaw.
The statement comes at a time when the KRG is getting ready to complete the Taq Taq-Khurmala-Fish Khabur pipeline by the end of this year,which Iraqi officials in Baghdad's heavily fortified oil ministry have threatened dire consequences if completed, according to a Reuters article.
The pipeline will allow the KRG and oil companies who have contracts with the northern region to ship crude oil to the world without having to rely on Baghdad’s centrally-controlled pipelines. The new conduit has the potential to alter the balance of power in the region.
Baghdad and Erbil are at loggerheads over the oil issue, with Baghdad claiming that oil contracts in the north are illegal and go against the framework of the Iraqi constitution, and Erbil insisting it has sovereignty over its own natural resources.
“Instability in Iraq would not benefit either the Iraqi people of the companies who operate in the region, and hence is always a key consideration for Genel. However, Kurdistan, where Genel operates has been very stable for many years,” the spokesperson said.
Genel is a small player in the oil game compared to the multinationals operating in Kurdistan. Nevertheless, it has played a role in the KRG’s active defiance of Baghdad in the oil dispute.
In January, after the KRG approved Genel to ship fuel in trucks via the Taq Taq field, the Turkish company sold 240,000 barrels of oil valued at $22 million with German firm Select Energy.
The deputy prime minister of energy affairs for the Iraqi central government, Hussain Shahristani, warned against this and said any exports from the Kurdish Region would be tantamount to “smuggling operations”.
Despite this, Genel encourages the completion of the pipeline and hopes to use it to ship an estimated 45,000 to 55,000 barrels of oil a day, generating revenues of $300 million to $400 million, according to Genel CEO Tony Hayward.
“We believe the pipeline will be a positive political benefit, allowing increased exports of oil from the Kurdistan Region of Iraq with regular stable payments that will benefit Iraq as a whole,” the Genel spokesperson said. “Revenues will be shared between Baghdad and Erbil in accordance with the Iraq Oil Law of 2007,” the spokesperson added.
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