KRG Ministry of Natural Resources

21 May 2012

Erbil, Kurdistan – Iraq (KRG.org) – Prime Minister Nechirvan Barzani at a major energy conference in Erbil yesterday said that Kurdistan’s relations with Turkey in the energy sector have entered a new phase. He expressed his optimism that after his recent visit to Turkey, more political will and understanding will lead to stronger economic relations. 

In his speech at the energy conference, the Prime Minister said, “We hope that our natural resources will be a source of prosperity for all the people of Iraq. The presence of Minister Taner Yildiz [Turkey’s Minister of Energy and Natural Resources] and other Turkish guests is a sign of our cooperation with Turkey in natural resources, and a testament to how we can support this important sector through our historic ties in this region.” 

The Prime Minister was speaking at a two-day conference on “Energy and the Kurdistan Region’s Road to Development”. He said, “Because of our policies, we have been able to put the Kurdistan Region on the world map. I have no doubt that we will have an important role in providing energy to the world.” 

The governors of Ninevah and Kirkuk provinces participated in the conference. Noting their attendance, Prime Minister Barzani said, “Some other areas in Iraq are following the same path to learn from our expertise, as it is their right to manage their own resources in their governorates, according to the law and Iraq’s federal constitution.” 

Turkey’s Minister Yeldiz spoke about the vital trade partnership between Turkey and the Kurdistan Region, which accounts for some 70% of the 11 billion dollars of trade with Iraq. On energy policy, he said, “Turkey’s future energy requirement is 48 – 50 billion cubic metres of gas. Our neighbour has a significant role to play in this.” 

He added, “With the Kurdistan Regional Government and the Iraqi government, we will develop such projects and we will stand by them when they face problems. We have a multi-directional energy policy, and northern Iraq will not be an exception to this. “ 

Dr Ashti Hawrami, the Kurdistan Regional Government’s (KRG) Minister for Natural Resources, said in his presentation, “Turkey means for us the access route to monetise oil and gas and create benefits for the Iraqi people.” 

He discussed plans for a new gas pipeline to supply Turkey’s BOTAS gas grid, to be built through public-private partnership, and in the next 12 months, a million-barrel oil pipeline to connect to the Ceyhan pipeline, where a large new refinery is planned. 

Dr Hawrami said, “The Kurdistan Region is very dynamic. Several majors are openly talking about coming to the Kurdistan Region. We anticipate two or three majors, through mergers and acquisitions or new contracts. New oil and gas discoveries will contribute to our target of 2 million barrels per day by 2019. Petrochemical plants are being considered, and we invite investors to discuss this. And more power plants to make us net power exporters, and satisfy the needs of adjacent provinces and perhaps one day Syria." 

Referring to the halt of exports from the Region, Dr Hawrami said that the Kurdistan Region is ready to restart exports if Baghdad honours its payment agreements. "No pay, no take," he added. 

Dr Hawrami criticised what he said was akin to an economic embargo against Kurdistan by the federal government, which has halted the supply of fuel oil products to the Region. The federal government stopped all fuel oil supplies to the region in 2010, and also gradually reduced and then cut off most of the white petroleum products for the domestic market, hurting the people. 

"Iraq refines almost 700,000 bpd of crude oil. The Kurdistan Region's share should be no less than 130,000 bpd, yet at the peak of their recent cooperation they were only sending 35,000 bpd before cutting it back to next to nothing", he said. He warned, "If this policy continues, then the KRG will increase its refining capacity and would also be obliged to barter some crude oil for refinement abroad to satisfy the needs of the people in the Region." 

The Natural Resources Minister also said that this year the KRG hopes to introduce a liberal mining law to encourage investment and will invite companies for tendering. Under the Iraqi constitution, this is the exclusive power of the Region. 

Dr Hawrami emphasised that in terms of sharing revenues, there is no difference between Kurdistan’s oil and Iraq’s oil, as the revenues are shared by all the Iraqi people. He said, “We will only retain 17%, no more.” 

Several KRG, Turkish, and Iraqi officials participated in the conference, including Turkey’s Deputy Undersecretary at the Ministry of Energy and Natural Resources Sefa Aytekin; the Governor of Kirkuk Najmaldin Karim; the Governor of Nineveh Atheel Nujaifi; the Head of the KRG Department of Foreign Relations Minister Falah Mustafa; and the KRG Minister for Electricity Yasin Sheikh Abubakir Mawati. 

The two-day conference was organised by Steam, the Strategic Technical Economic Researches Centre, in coordination with the KRG.