Pipe Dreams or Reality? The Real Deal Behind Turkish-Kurdish Oil Plans

It is true though that any such pipeline from Iraqi Kurdistan into Turkey will face more than a few challenges.

Needless to say the success of any pipeline will also hinge on the commercial realities of the deal and what stockholders would get out of it. Other dimensions are strategic and security related. Apart from annoying Baghdad, the Iranians and Russians are also likely to be unhappy.

Iran has a long term contract, until 2021, to supply gas to Turkey at higher-than-market prices (the two countries are currently involved in a legal dispute over this issue). And Russia would see any potential new supplier to Europe as competition for its own gas. Additionally Russia is one of Turkey's largest gas suppliers, supplying 58 per cent of the Turkish gas consumption.

In early June, Kurdish energy minister Hawrami said that, by 2015, Iraqi Kurdistan could be producing one million barrels of crude oil per day, with that doubling by 2019. However it’s not clear how much of that would be exported, how much would reach other countries outside of Turkey or whether the crude would only be refined and used for power generation inside Turkey.

Really though, the main obstacle is the political dilemma facing Turkey - it’s cooperation on the pipelines means it must recognise a Kurdish entity, or even a Kurdish identity, something it has never wanted to do because of its own “Kurdish” problem, inside Turkish borders.

The outlawed Kurdistan Workers’ Party (or PKK) has been fighting for greater rights for the Kurds of Turkey and Kurdish autonomy since the early 1980s. The group is designated a terrorist organization by some countries and the violent conflict between Turkish authorities and the PKK has claimed tens of thousands of lives over the years. The PKK tend to be based in the inaccessible Qandil mountains on the Iraqi Kurdish side of the border and launch their attacks into Turkey from there. And the PKK has been known to target the oil and gas pipelines in Turkey.

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