Turkey, Iraqi Kurdistan agree on ‘50-year energy accord’

Turkey, Iraqi Kurdistan agree on ‘50-year energy accord’

ARBIL - Anadolu Agency
Turkey, Iraqi Kurdistan agree on ‘50-year energy accord’

The shipping of oil extracted from the Kurdish region last month has further chilled ties both between Baghdad and Ankara, and the central government and Kurdish authorities. AP photo

Turkey and the Kurdistan Regional Government (KRG) have signed a 50-year deal to export Kurdish oil, the prime minister of the administration has announced amid the ongoing spat between Baghdad and Arbil.

“We have signed an energy deal with Turkey that comprises of 50 years and can be extendable if necessary,” Nechirvan Barzani said June 4 during a speech at the Kurdish Parliament in Arbil.

Relations between Arbil and Baghdad have been strained by disputes over the sale of northern Iraqi oil through Turkey.

The central government insists it has the sole right to export Iraqi crude and says contracts between Kurdish authorities and foreign energy firms without its expressed consent are illegal, statements Arbil rejects.

Hussein al-Shahristani, Iraq’s deputy prime minister for energy affairs, has threatened legal action against firms that purchase what he called “smuggled oil,” which Turkey started to export through its territory last week. Turkish Energy Minister Taner Yıldız dismissed claims that Ankara was trying to illegally profit from the exports.

‘No intention of dividing Iraq’

After the Iraqi central government suspended funds from oil income to the KRG, Arbil went on to export oil in late May, saying it would serve as compensation for the budget cut.

“We don’t have any intention of dividing Iraq, and this agreement is not part of such an agenda either,” Barzani said. The oil exports would not pave the way for the independence of the KRG, said Barzani, adding the Kurdish government would continue to exercise its constitutional rights, which grant 17 percent of the budget to the Kurdish region.

He added that the KRG has exported Kurdish oil worth $9 billion to date, which has mainly been used to pay government workers. The KRG had said it needs a total of 850 billion Iraqi dinars ($740 million) to meet outstanding payroll costs.

The Kurdish government needs $31 billion for its citizens to have a normal standard of living, said Barzani. “We need basic services for our citizens, including standard infrastructure such as schools, highways and bridges. We insist on obtaining our constitutional rights and we will not step back under any circumstances,” he said.

The first batch of Kurdish oil transported through Turkey took place on May 23 and had an estimated value of around $110 million. Turkey and the KRG have stated that the flow of Kurdish oil to international markets would continue despite Iraq’s appeal to international arbitration demanding an immediate halt to sales.