ERBIL, Kurdistan Region – Kurdistan Region Natural Resources Minister Ashti Hawrami welcomed Baghdad’s new tone on Erbil’s direct oil exports to Turkey, and said that the first supplies through a newly-extended pipeline had gone without a hitch.
Hawrami told Rudaw that the latest comments by Iraq’s Deputy Prime Minister for Energy Hussein Shahristani, in which he backed the autonomous Kurdistan Regional Government’s (KRG) oil exports to Turkey, were positive and “realistic.”
Shahristani told the Turkish Anadalu Agency that, "We support and seek to increase our oil and future natural gas exports to Turkey."
He said that the central government’s conditions for energy exports by Erbil are: The quantities of Iraqi oil exported to Turkey must be known to the central government; oil must be sold at international market prices; and revenues from the sales must be channeled to the account of the Iraq Development Fund in New York, in line with previous UN Security Council resolutions.
“We see Mr. Shahristani’s position positively. The position is realistic and we see the language of such statements positive,” Hawrami said.
Last month, Baghdad had stepped in to try and block the deal, leading to a flurry of Turkish and Kurdish diplomacy that presumably ensured Baghdad would get its constitutional lion’s share of the revenues from the sales.
“No doubt, the revenue of Kurdistan oil exports will be very transparent and the whole process will be run transparently, for the service of the people of the Kurdistan Region and Iraq,” Hawrami said.
He told Rudaw that the first supplies through a patch of pipeline, allowing Kurdish crude to reach Turkey and on to international markets via the Ceyhan port on the Mediterranean Sea, had gone well.
“The Kurdistan Region’s oil exports started in a very good way through the Kurdistan-Turkey pipeline. Now, we are certain that the pipeline works well and the process will continue,” Hawrami said. “Certainly, the quantity of crude oil export through the pipeline will increase constantly.”
The KRG intends to boost current oil exports of 150,000 barrels per day to 400,000 bpd by the end of 2014.
Hawrami said that the success of the pipeline and exports will defuse the standing political tensions between Erbil and Baghdad.
“Despite the political obstacles that were created for the process, now the success of the process has calmed the situation and will lead to its improvement,” Hawrami said. “The added oil exports will reflect positively on the economy of the Kurdistan Region and Iraq, as well as Turkey and the world market,” he explained.
Baghdad has always opposed the Kurdistan Region’s energy deals with international oil companies and Turkey. It has remained at odds with Erbil over management of natural resources in the Kurdish regions.
Hawrami said that Baghdad’s new tone could help resolve other outstanding issues with Erbil and perhaps lead to the signing of a highly controversial Hydrocarbon Law that has been sitting in the Iraqi parliament since 2007.
“Based on such statements, we can cooperate very well to solve all the issues,” Hawrami said. “This style can facilitate the passing of the Iraqi oil and gas law as well as the oil and gas revenue distribution law,” he added.
