Turkish Energy Minister: Kurdish Oil Ready for Sale at Ceyhan

ERBIL, Kurdistan Region – Turkish Energy Minister Taner Yildiz said Tuesday that Kurdish oil piped and stored at the Mediterranean port of Ceyhan is ready for sale to buyers, underscoring a possible breakthrough in a long-running dispute between Erbil and Baghdad.

“Our storage tanks in Ceyhan for northern Iraqi oil are now full,” said Yıldız, speaking on the sidelines of a regional energy conference in Istanbul. “There is not any obstacle for the sale. This oil belongs to Iraqis and they are the ones who will sell it,” he added.

Erbil and Baghdad have been at loggerheads since the start of this year over which side has the right to export and market the oil. According to the Turkish energy minister, officials from Erbil, Baghdad and Ankara are supervising the sales and the revenue is to be deposited in a Turkish bank.

“Officials from Baghdad, Erbil and Turkey supervise the sales and the money from the oil is to be deposited in Turkey's state-owned Halk Bank,” said Yıldız.

His comments came after a recent announcement by the autonomous Kurdistan Regional Government (KRG), which said that the stored crude at Ceyhan would be sold this month.

Kurdistan Region President Massoud Barzani said that, “The political decision has been made that we're going to sell oil independently." The Reuters news agency quoted him as saying that, “We will continue producing the oil, pumping it out and selling it. If they (Baghdad) continue escalating, we will also escalate from our side."

Yildiz said that stored Kurdish oil at Ceyhan had reached 2.5 million barrels, the full capacity of the storage tanks. The KRG had said that oil to Ceyhan was being pumped at 100,000 bpd.

In March, the KRG announced it was ready to export 100,000 barrels of oil through the federally controlled Iraq-Turkish Pipeline (ITP) as a sign of "good will," hoping that would lead to a major breakthrough of the dispute between the two sides. However, the successive sabotage of the ITP prevented the Kurds from fulfilling their promise.

If the oil sales at Ceyhan go through without Baghdad raising another objection, it could be a sign that Baghdad is coming to terms with the reality that the Kurds are determined to control their own oil resources.

The Iraqi government, which the Kurds blame for opposing the oil sales, may be forced to tone down its opposition because Prime Minister Nouri al-Maliki has indicated he may seek a third term, for which he would need Kurdish political support.

Earlier this week Maliki’s State of Law party, which says it has won more seats than anyone else in last month's parliamentary elections, asked Kurdish leaders to join negotiations to form the next government.

In previous elections, the Kurds have played the role of kingmaker. Maliki’s second term would have been impossible without Kurdish backing, which came after months of deadlock over forming a government.

But this time, the Kurds have been accusing Maliki of breaking past agreements, and have threatened to boycott the political process or pull out of Iraq altogether.