Spotlight

Surrounded by abundant energy supplies in its neighbourhood, Turkey has long been looking to diversify its energy sources. With the economy largely escaping the ongoing global financial crisis, demand for energy is skyrocketing.

During Turkey Energy Minister Taner Yildiz's visit to Erbil last month, Kurdistan Regional Government (KRG) Natural Resource Minister Ashti Hawrami announced plans to build a new pipeline to transport crude oil from northern Iraq to Turkey.

For many, it marked a new page in warming relations between Erbil and Ankara, and was seen as further evidence of souring relations between Ankara and Baghdad. The project would effectively bypass Baghdad, reducing the KRG's dependency on the federal government.

Domestic consumption of electricity in Turkey is rising at about 8% per year, equivalent to a doubling of electricity usage every decade. In a country with few meaningful hydrocarbon reserves of its own, Turkey spends up to $40 billion a year just to meet demand.

The attraction of Erbil is clear. High estimates put the KRG's potential oil reserves at 45 billion barrels of oil and 1.7 trillion cubic metres of gas. More realistically, reserves are estimated to total 40 billion barrels, according to the US Geological Survey.

Kurdistan is keen to see production increase from 250,000 barrels of oil per day to more than 2 million by 2019, with Turkey an obvious market for any increase in production. Sharing a 350km land border, the KRG hopes new oil and gas pipelines could increase hydrocarbon exports and enable the region to become more self-sufficient.

New pipelines would also allow the KRG easy access to the Mediterranean through Turkey and thus lucrative European markets. Turkey would also benefit from potentially profitable transit fees.

According to Professor Henri Barkey, a Turkey expert at Lehigh University in Pennsylvania, the project makes sense in the long run, but he questions whether it is feasible. He told SES Türkiye that "this is a particularly complex game."

Denise Natali, an expert on the Kurds and Minerva Chair at the Institute for National Strategic Studies, said that "the notion of an independent pipeline from the Kurdistan Region directly to Turkey, bypassing Baghdad, is highly unlikely."

Baghdad is adamant that any oil deal involving Iraq must have federal approval.

Ankara's misgivings with the Maliki government in Baghdad are well documented and this latest overture to Erbil is, according to Barkey, is "their way of sending a message."

Leveraging Baghdad may be part of Ankara's calculation, but equally important is developing bilateral relations with the KRG. "Turkey and the KRG have developed, and will continue to develop, mutual economic and energy interests," Natali said.

Developing ties with the KRG will also enable Ankara to combat the threat from the PKK and potentially contribute to solving the country's Kurdish problem.

Barkley believes that Ankara now hopes that Kurdistan can pressure the PKK to agree to a ceasefire and pave the way to a peaceful solution.

"The Turks have made it very clear recently that they need the KRG for demobilising the PKK," Barkey said. "You cannot resolve the Kurdish issue in Turkey without KRG support."