Istanbul hosts Iraq meet on eve of crucial oil deal

Istanbul hosts Iraq meet on eve of crucial oil deal

ISTANBUL - Hürriyet Daily News
Istanbul hosts Iraq meet on eve of crucial oil deal

A worker adjusts a pipe at the Nassiriya oilfield in Nassiriya, 300 kilometers southeast of Baghdad. The Iraqi government has announced assertive oil production targets. REUTERS photo

Senior Turkish and Iraqi officials are attending the “Iraq Future Energy 2012” meeting in Istanbul only days after a landmark deal between the central government in Baghdad and the Kurdistan Regional Government (KRG) in the north.

The KRG had confirmed on Sept. 14 a deal aimed at resolving an oil standoff with Baghdad, whereby the region will export 200,000 barrels of oil per day, and receive an “advance” of about $833 million.
“We are proud that Iraq Future Energy returns to Istanbul for a third year to provide a forum for crucial discussions around the Iraqi energy industry,” Murat Mercan, deputy minister of energy for Turkey, wrote on the official website of the event, which will last until Sept. 20. “We welcome all attendees to the beautiful city of Istanbul and I look forward to meeting you at the event.”

İbrahim Bahr Alolom, former minister at the Ministry of Oil for Iraq, said, “The entire Iraqi energy industry is getting ready for big things. Production is expected to hit 3.4 million barrels a day this year and as more fields come on stream, this figure can only increase, and this will be of enormous benefit for every single Iraqi.” Iraq has announced its goal of reaching a target production capacity of almost 12 million barrels per day by 2017.

Mercan, Alolom, and Amer Rajab Salih, head of the Regulatory Department at Iraq’s Ministry of Electricity, are among the speakers at the Istanbul event, which also includes state and private sector representatives.

The KRG had halted its oil exports via the federal government on April 1 over $1.5 billion it said is owed to foreign oil companies working in the region that Baghdad has allegedly withheld, but then resumed them again on Aug. 7, in what was billed as a confidence-building measure. A KRG official then said on Sept. 1 that the region would extend exports until the 15th.

Crucial deal for Iraq, Turkey

The deal is also crucial for Ankara as Iraq remains a leading oil and gas supplier for Turkey. Genel Energy, an Ankara-based oil firm trading on the London Stock Exchange, is among the oil searchers in northern Iraq.

Last week’s deal was reached at a meeting chaired by Deputy Prime Minister Roz Nuri Shaways and attended by Iraqi and KRG officials, a statement on the website of the KRG said. Under the deal, which is to be signed this week, the KRG will export 140,000 barrels of oil per day for the rest of September, then 200,000 barrels per day for the remainder of the year, Agence France-Presse reported.
The KRG will receive an “advance” of 1 trillion Iraqi dinars (about $833 million) from the federal government, and will determine the amount of oil it will export in 2013, and also determine the remunerations due to companies operating in the region for inclusion in the 2013 federal budget law, it said. The two sides also agreed to establish a committee to track the amount of oil produced and refined. Another committee is to follow up on the implementation of the agreement and work to resolve any obstacle that may be encountered until an oil and gas law.

Baghdad and Arbil are at odds over issues including the KRG’s refusal to seek central government approval for oil contracts with foreign firms, and over a swathe of disputed territory in northern Iraq.