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  • Gas From Iraqi Kurdistan For Nabucco: Turkish Interest

    GAS FROM IRAQI KURDISTAN FOR NABUCCO: TURKISH INTEREST

    http://noravank.am/eng/articles/detail.php?ELEMENT_ID=5257
    15.12.2010

    Sergei Sargsyan

    In September 2009 Turkey's Minister of Energy Taner Yildiz stated that
    Turkey and Iraq discussed possibilities of concluding memorandum on
    mutual understanding in the issue of the Iraqi gas supply to Europe
    through the territory of Turkey by the planned Nabucco gas pipeline1.

    This sounded a bit unexpected, taking into consideration that `gas
    from Iraq' implies its production on the territory of Kurdistan Region
    which will promote development of its economic independence and
    self-sufficiency and, consequently, work for strengthening of that
    region as an independent formation and Ankara's negative attitude to
    such developments is conditioned not only by historical but also by
    geo-political grounds.

    That is why it would be logical to assume that the interest of Turkey
    in the export of the Iraqi gas through its territory is conditioned
    not only by economic but also by political reasons. So what are the
    real interests of Turkey and how feasible are those mutual plans of
    Ankara and Baghdad on turning Iraqi Kurdistan into one of the main
    alternative gas suppliers to the EU?

    The explored reserves of gas on the territory of Iraq are about 3.17
    trillion m3, and about 90% of them - approximately 2.8 trillion m3 are
    in Kurdistan Region. But at present the natural gas is not produced in
    Iraq due to the absence of the appropriate capacities and
    infrastructure. Though the Iraqi government has eagerly proceeded to
    concluding direct contracts and arranging international tenders on
    foreign capital formation and involvement of foreign companies in
    order to create from zero the gas producing and gas transition
    systems.

    Thus, in May 2009 Austrian `OMV' Energy Company and Hungarian `MOL'
    each acquired 10% of shares of «Pearl Petroleum Company», which
    produces Kor Mor and Chemchemal gas fields on the territory of Iraqi
    Kurdistan and the expected capacity of which will be about 85 million
    m3 of gas per 24 hours by 2015. This implies beginning of export of
    the gas to the world markets. This capacity should be at least enough
    to start Nabucco pipeline.

    At the same time, it should be mentioned that companies which are
    ready to invest in oil and gas sector of Iraq are expected to face
    many challenges of judicial and political character and it will be
    hard to overcome them in the time to come and to make capital
    investments more protected.

    Firstly, there is no comprehensive judicial and legal base for
    mobilization of investments. In particular, framework bill on
    hydro-carbons approved by the government of Iraq in February 2007 is
    still not passed.

    Secondly, there are serious discrepancies between the Central
    government of the country and authorities of Kurdistan Region on
    interpretation of the provisions of the Constitution of Iraq which
    concern the regulations of exploring of the resources.

    Mainly, the controversy concerns the procedure of concluding
    agreements with foreign investors and sharing revenue from the energy
    carriers' export.

    In accordance with the provisions of article 113 of the Constitution2
    Iraqi Kurdistan has acquired a status of federal region with the high
    level of autonomy, up to the right to have its own legislation, system
    of legislative, executive and judicial authority, its own security
    powers and etc.

    According to article 107 the central authorities has preserved
    exclusive powers to carry out the foreign and national security
    policy, arranging trade policy between the districts and provinces of
    Iraq, drafting state and investment budgets, planning policy connected
    with the water resources of Iraq and etc.

    As a result, Kurdistan has started passing regional laws on economic
    activity on its territory on stepped-up pace without waiting their
    drafting and passing by the federal government. Back in 2006 the
    regional law `On Foreign Investments' was passed, and in 2007 - Law on
    Hydro-Carbons, according to which foreign investments can be attracted
    not only to the hydro-carbon sector of three provinces - Erbil,
    Suleimania and Dohuk, but also to the territories round Kirkuk.

    In May 2010 central and regional governments concluded an agreement
    which judicially vested right of Kurdistan to export oil to the
    external market which was done till now unofficially.

    At the same time, it is not a secret that because of the oil
    smuggling, according to different estimations Iraqi budget loses from
    $3 to $5 billion annually. A great part of those losses falls on the
    smuggling of oil produced in the north of the country. But a similar
    situation with the control of oil producing and refining sectors by
    the largest clans (both Kurdish and Arab-Shiite) and state and
    partisan structures of the Center and Kurdistan Region brought to the
    situation when the status-quo shaped satisfies all to a varying
    degree, except, may be, Sunnite Arabs of Iraq, the historical range of
    habitation of which has no gas and oil reserves. But a perspective gas
    infrastructure which demands mobilization of large foreign investments
    will have more financial and corruption transparency. In this case the
    profit opportunities from oil smuggling will be brought to nothing.
    This makes regional government of Kurdistan Region fiercely defend its
    interests on the earlier stage of judicial specifying of the profit
    share which will stay in the budget of Kurdistan. Besides, the scheme
    and level of transparency in the allocation of the revenue from gas
    production and export, sooner or later, will be spread to the oil
    sector as well. And this will directly affect the interests of the
    Kurdish clans and may cause redistribution of the influence between
    both them and two leading Kurdish parties of Iraq - Democratic Party
    of Kurdistan (leader - the head of Kurdistan Region Masud Barzani) and
    Patriotic Union of Kurdistan (leader - president of Iraq Jalal
    Talabani).

    At the same time, the provisions of Constitution, according to which
    the revenue from using of the natural resources3 is allocated between
    all the people of Iraq on the proportionality principle and which
    turns Kurdistan Region into a donor in regard to the rest of the
    country, have not been revoked yet. And the availability of judicial
    collisions between regional and central governments is very important
    in feeding confrontation processes between the ethnic and confessional
    groups in the country and they afford extra-features for
    implementation of their own interests by the neighboring states and
    first of all by Turkey.

    But the problems on production and realization of oil, and in future
    gas of Northern Iraq, are not restricted to a complex of problems
    existing between Kurdistan Region and Center,

    The largest oil field which brings most profit to the budget of
    Kurdistan Region is near the city of Kirkuk which is a disputed
    territory between Kurds, Arabs and Turcomans. The problem originates
    from the 20s of the last century when Mosul Villayat was passed from
    Turkey to Iraq,

    The prospects of creation of an independent Kurdistan in consequence
    of the 1991 war or at least formation of an autonomy with high or at
    least real level of independence (the one Kurdistan Region has now)
    made Ankara stir up its foreign policy in the Iraqi direction.

    Not without its pressure the so-called `security zone' in the North of
    Iraq included only a part of Iraqi Kurdistan, without cities of Kirkuk
    and Khanaqin, i.e. within the cut borders of Kurdish autonomy declared
    unilaterally by Saddam Hussein in 1974.

    In that very period the support to the ethnic Turkic Turcoman
    (Turkmen) minority was build up. The minority numbers, according to
    different estimations, from 500 to 2.5 million people and compactly
    lives on the territory the so-called `Turcoman belt' - in the region
    which divides districts mainly populated by Arabs and Kurds.

    Alongside Turkey initiated a `demographic war' - documental
    registration of Kurdish population as Turcoman, using as an incentive
    distribution of the humanitarian aid by Turkey based on the ethnic
    principle. And in 2004 Turkey's attempts to finance the process of
    `transition into Turcoman' of the Iraqi Arabs living near Kirkuk were
    fixed

    Gradual accumulation of political and most probably military and
    political potential by Turcomans turned that ethnic minority into one
    of the most significant leverages in the hands of Ankara to exert
    pressure on Iraqi Kurdistan.

    The fact that sooner or later Turkey will claim a right to its former
    Mosul Villayat was acknowledged by S. Hussein very well when he
    sanctioned dispossession of not only Kurds but also of ethnic Turks
    from the oilfields in the north of the country within the framework of
    the policy of Arab nationalism4.

    Today there are about 100 thousand Turcomans from the 4 million
    population of Kurdistan Region, and most of them live in the province
    of Erbil. From organizational point of view the Turcomans are united
    in a number of social and political organizations and the most
    prominent is the Iraqi Turcoman Front which, however does not receive
    any support on the elections on all the levels.

    Belonging of Kirkuk and other disputed territories, according to
    article 140 of the Constitution, should be decided at the local
    referendum which had to be held not later than on December 31. 2007.
    Due to the fact that in the region of Kirkuk Kurds constituted
    majority as a result of active repatriation5 and migratory policy
    carried out by Kurdistan Region, the prospects of the results of the
    referendum and passing of the district rich with oil to Kurdistan
    caused serious concern and strong reaction on behlaf of Anakra which
    demanded to postone referendum at least for five years. On January 15,
    2007 Turkish prime-minister Recep T. Erdogan openly threatened saying
    that referendum in Kirkuk could initiate a regional conflict.

    Both his statement: `At present Iraq for us is of greater priority
    than membership in the European Union'6, and information in the
    Turkish mass media that the 240-thousand army group reinforced with
    the armor and artillery was concentrated at Iraqi border come to prove
    that such a development is quite probable.

    In general Turkey pursues following strategic goals:
    Preserving of Kurdistan Region in united Iraq with the hope in future
    to strengthen the role of the centre in the business of the region.
    Not-allowing de-jure annexation of the oilfield in Kirkuk to Kurdistan Region.
    Initiation and support of the controversies, up to incitation of
    intra-fraction and intra-clan collisions between the main powers in
    Kurdistan - DPK, PUK and KWP.
    Creation and support of new political parties and movements which
    weaken and split the ranks of the powers traditionally working in
    Kurdistan. Formation of `Goran' party (`Changes'), established by a
    group of former members of Patriotic Union of Kurdistan which took
    away 11% of votes from the PUK at local elections comes to prove that
    such a process of party building has already been initiated after the
    acquisition of factual independence by Kurdistan Region.
    Putting on the agenda the issue of involving gas from Iraqi Kurdistan
    to Nabucco project, Turkey not only preventatively lobbies direction
    of the gas export through its territory but also pursues a number of
    exclusively political aims. Under rather obscure prospects of Nabucco
    gas pipeline project implementation in its current configuration, only
    putting on the agenda the issue of multi-billion investments can
    initiate formation of more advantageous for Turkey stance of Kurdistan
    Region on a range of issues - from the relations with the Centre and
    Kurdistan Workers' Party to the issue of Kirkuk.

    In case if all goes well in the implementation of this economic and
    political intervention:

    Turkey, in fact, will get another reason - providing guarantees of
    uninterrupted functioning of an infrastructure which is of critical
    importance for Europe - to carry out operations against the activists
    of Kurdistan Workers' Party who may deliver strikes on the pipeline on
    both the territory of Turkey and neighbouring Iraq.
    It will initiate another aspect in the controversies and force
    opposition between both the authorities and clans of Kurdistan Region
    and the fighters of KWP, as well as between main parties of Kurdistan
    on the issue of distribution of revenue from the gas production and
    export.
    It will stimulate reduction of separatist moods in Kurdistan Region,
    because mobilization of multi-billion investments will be made, most
    probably, to a united state of Iraq and not to its separated part,
    especially when this separation is fraught with serious escalation of
    tension along its borders, up to the initiation of military actions.
    By the same reason it will reduce the heat of the struggle for Kirkuk
    and will promote preserving of status-quo.
    In mid-term perspective Turkey will continue attempts of economic
    penetration to Kurdistan Region (at present about 70% of investments
    in the Region are of Turkish origin), it will also try to create
    political space oriented on Ankara, in particular using as an option,
    creation of Turcoman and Arab parties and movements. Model and
    techniques of transboundary projection of influence of most active
    pro-Turkish part of Turcoman movement on the entire political field of
    activity of Turcoman parties and organizations of Kurdistan Region,
    most of which are loyal to the regional authorities, may also be
    successfully implemented in other districts of Turkish foreign
    political interests, in particular in Javakhq, through designing
    external management of the entire movement of Meskhetian Turks from
    the centers of Akhiskian Turks in Turkey.
    Generally, new policy of Turkey in regard to Kurdistan Region lies
    within the scope of the active neo-Ottomanism which has become a pivot
    of foreign policy of Ankara. It is not without reason that in the
    academic circles in Turkey the prospects of annexation of northern
    regions of Iraq to Turkey are seriously considered.

    1 http://news.mail.ru/economics/2910507/

    2Came into effect after the nationwide referendum held on October 15, 2005.

    3By the way, besides oil and gas, Kurdistan also has considerable
    iron, gold, uranium, wolfram and vanadium reserves.

    4According to western and Kurdish sources in the period from 1991 to
    1998 200 thousand Kurds and 5 thousand Turkmen were evicted from
    there, and 300 thousand Arabs were moved from other provinces of Iraq
    to Kirkuk; in Kirkuk province where the martial law was declared only
    those Kurds who refused from their national identity were allowed to
    stay. In order to reduce the share of Kurdish population, Kurdish
    villages near Kirkuk were destroyed and administrative borders of the
    province were changed through inclusion of non-Kurd population
    centers. http://www.kurdistan.ru/a211.htm

    5According to data of the 1957 census (before the beginning of
    large-scale military activities in Kurdistan), 48% of population of
    Kirkuk were Kurds, 28.2% - Arabs. and 21.4% - Turkmen (`Turcomans').
    http://www.kurdistan.ru/a211.htm

    6 http://www.Turkey.ru/lenta/all/20070201/2893.html

    `Globus Energy and Regional Security', issue 6

    ----------------------------------------------------------------
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    MILITARY AND POLITICAL RISKS OF TRANSCASPIAN PROJECTS[04.06.2010]
    GEOPOLITICS OF THE GAS PIPELINES IN THE BLACK SEA-CASPIAN REGION[24.12.2009]




    From: A. Papazian
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