Turkey Defers to Baghdad on Kurdish Oil

Tellingly, though, the sides were not prepared to give the impression of a breakdown in talks after Barzani’s failed mission to Baghdad this week. “Iraq’s Prime Minister Nouri al-Maliki and KRG Prime Minister Nechirvan Barzani emphasized the importance of reaching an agreement over the outstanding issues between the Kurdistan Region and Iraq," a statement from Maliki's office in Baghdad said later, indicating that the talks would go on.

Meanwhile, there are those who argue that the KRG and Baghdad are actually making progress. Reuters quoted Mehmet Sepil, the president of Anglo-Turkish firm Genel Energy, on Feb. 6 as saying, “We have never been this close to a deal." Sepil added, "The issues that caused an impasse have been identified. There's been quite a bit of progress made."

While the KRG and Baghdad remain locked in tough negotiations, the Kurdish media are reporting that the KRG is ultimately relying on the presence in northern Iraq of giant international oil companies, including ExxonMobil of the United States, Total of France and Gazprom Neft of Russia, to alter the picture to the KRG’s advantage.

“These companies are so powerful that they can change national policies,” the English-language edition of the Kurdish daily Rudaw reported on Feb. 17, also indicating that “from the very beginning of the row (with Baghdad) it has been obvious that, one way or another, Kurdish oil will flow overseas.”

The Financial Times, in a report on Jan. 26 bound to have displeased the Kurdish leadership, indicated, however, that although Kurdish crude is now flowing to Ceyhan, where it is being stored, major oil companies are shying away from responding to the KRG’s call for bids for this oil.

“We will not be involved in KRG tenders until we have a much better understanding of the ramifications for our relationship with Iraq,” the paper quoted an unnamed senior executive from what it said was one of the world’s largest energy companies.

It's “obvious that, one way or another, Kurdish oil will flow overseas,” as Rudaw put it, but it seems that this will not be exclusively on Kurdish terms if the emerging picture is anything to go by.