Thursday, September 28, 2017

Turkey backs Iraq on oil after Kurdish vote - OIL & GAS JOURNAL



HOUSTON, Sept. 28, 2017

The government of Turkey said it will deal exclusively with the Iraqi government on oil exports after voters in the semiautonomous Kurdistan Region of Iraq supported independence in a controversial referendum.

Assurance from Turkish Prime Minister Binali Yildirim of support for Baghdad followed threats before the vote to close the pipeline that carries crude oil from Iraqi Kurdistan across Turkey to Ceyhan on the Mediterranean.

About 72% of eligible voters participated in the Sept. 25 referendum, which supported negotiations leading to separation from Iraq by nearly 93%.

Yildirim told Iraqi Prime Minister Haidar al-Abadi in a Sept. 28 telephone conversation that Turkey would deal only with Iraq on exports and that Iraq had “support of his country for all decisions,” according to press reports.

Shutdown of the pipeline across Turkey would block shipment of as much as 650,000 b/d of crude, sales of which are crucial to Iraqi Kurdistan.

The Kurdish Regional Government, debts of which have grown to an estimated $20 billion during the 3-year slump in crude-oil prices, lists the absence of revenue-sharing promised in the Iraqi constitution among its grievances against Baghdad.

Meanwhile, the Iraqi parliament on Sept. 27 said Abadi should use military force to reclaim the region around giant Kirkuk oil field in northern Iraq.

Kurdish Peshmerga forces have controlled the city of Kirkuk and surrounding areas since 2014, when they defeated Islamic State insurgents after soldiers of the Iraqi military fled.

The Iraqi segment of the northern export pipeline between Kirkuk and the Turkish border is idle. But two other pipelines now connect Kurdish oil fields with the pipeline at Fishkhabur on the border.

Turkey and the central Iraqi government were joined in their opposition to the referendum by Iran. Turkey and Iran have large Kurdish populations and histories of clashes with Kurdish militants.

The US and United Nations also opposed the referendum.

SOURCE