GAS FROM IRAQI KURDISTAN FOR NABUCCO: TURKISH INTEREST

15.12.2010

GAS FROM IRAQI KURDISTAN FOR NABUCCO: TURKISH INTEREST

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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