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Iraq files case against Turkey over Kurdish oil exports

File - Baghdad maintains that the Kurdish region’s energy deals to export its oil are illegal.

BAGHDAD: Baghdad launched legal action against Ankara Friday after oil from Iraq’s autonomous Kurdish region was exported to international markets without the cental government’s consent, potentially worsening already-poor ties between the neighbors.

The sudden decision to call for arbitration by Iraq, which came after shipments began Thursday evening, is the latest move in a yearslong row in which Baghdad has insisted it has the sole right to export Iraqi crude.

The dispute over the exports, which the U.S. has said could further destabilize Iraq, also throws into doubt Prime Minister Nouri al-Maliki’s bid for re-election after polls last month, with his campaign expected to hinge on whether or not he can secure Kurdish backing.

The central government’s Oil Ministry said in a statement that it has “filed a request for arbitration against the Republic of Turkey and its state-owned pipeline operator BOTAS ... with the International Chamber of Commerce in Paris.”

“By transporting and storing crude oil from Kurdistan, and by loading that crude oil onto a tanker in Ceyhan, all without the authorization of the Iraqi Oil Ministry, Turkey and BOTAS have breached their obligations under the Iraq-Turkey Pipeline Agreement,” it said.

The ministry said it was asking the ICC to order Turkey and BOTAS to “cease all unauthorized transport, storage and loading of crude oil,” and added it was seeking financial damages of more than $250 million.

Turkish Energy Minister Taner Yildiz told reporters earlier that shipments of oil pumped from the autonomous Kurdish region in northern Iraq and stored in Turkey’s Mediterranean port of Ceyhan began Thursday night.

Yildiz insisted that Iraq would “govern the future sales,” but the exports still came in defiance of Baghdad, which insists it has the sole right to develop and export the country’s prized natural resources, which account for nearly all government income.

A Turkish official, speaking on condition of anonymity, told AFP that Ankara had not been informed of Iraq’s decision to take legal action, while an ICC spokeswoman said she was not allowed to confirm any details of potential cases.

Ties between Iraq and Turkey, which had been on the upswing as recently as 2010, have since dramatically worsened with the ICC case likely to damage fledgling efforts to improve them.

The two countries differ in particular over the Syrian conflict as well as Turkey’s dealings with Iraq’s Kurdistan region. Diplomats say the two countries’ leaders also have strained personal relations.

The latest dispute is also expected to further chill ties between Baghdad and Iraqi Kurdish authorities, just weeks after officials hailed an interim goodwill agreement under which Kurdistan would export 100,000 barrels of oil per day via central government-controlled pipelines.

Kurdish authorities based in Irbil said Friday that revenue from the sales would be deposited in Turkey’s state-owned Halkbank, insisting they had acted transparently.

The Kurdish region would “continue to exert its rights of export and sell oil” but remained committed to negotiate “in good faith” with Baghdad “to reach a comprehensive settlement” on the sharing of energy supplies.

Baghdad and Irbil have long-standing disagreements over a litany of issues, including whether or not Kurdish officials can sign deals with foreign oil companies without the central government’s consent.

They are also at loggerheads over a swathe of disputed oil-rich territory.

 
A version of this article appeared in the print edition of The Daily Star on May 24, 2014, on page 4.

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Summary

Baghdad launched legal action against Ankara Friday after oil from Iraq's autonomous Kurdish region was exported to international markets without the cental government's consent, potentially worsening already-poor ties between the neighbors.

Turkish Energy Minister Taner Yildiz told reporters earlier that shipments of oil pumped from the autonomous Kurdish region in northern Iraq and stored in Turkey's Mediterranean port of Ceyhan began Thursday night.

Ties between Iraq and Turkey, which had been on the upswing as recently as 2010, have since dramatically worsened with the ICC case likely to damage fledgling efforts to improve them.

The two countries differ in particular over the Syrian conflict as well as Turkey's dealings with Iraq's Kurdistan region.


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