Interview: Turkey is willing to exist on all Iraqi soil

Turkish Energy Minister Taner Yıldız says the Kurdistan Regional Government (KRG) of northern Iraq should be more open for energy deals, linking the issue to the continued ‘normalization’ of Iraq. ‘Why is there a differentiation between the south and the north when the issue is to increase revenues?’ 

Controversial energy projects between Turkey and the Kurdistan Regional Government (KRG) are necessary for the continued “normalization” of Iraq, according to Turkish Energy Minister Taner Yıldız.

“If Iraq is to be considered as a whole … there should not be any differentiation between its south, north, east, or west,” Yıldız said in an interview. “The revenue to be obtained there [in the north] will be reflected based on the proportionality that they agreed on, which is 17 to 83 percent. Why is there a concern about this?”

The Iraqi government claimed to have received a letter from Ankara giving assurances that it would not sign any energy deals with the Kurdistan Regional Government (KRG) without the consent of Baghdad. 

We have no information about that letter. No such letter was written by the Turkish Energy Ministry. However, if Iraq is to be normalized and if we are to talk about Iraqi projects, then we need to agree on doing projects. In other words, saying “we agreed not to do any projects” can’t be a contribution to Iraq’s normalization. If Iraq is to be considered as a whole, which it should be, there should not be any differentiation between its south, north, east, or west. If you make a distinction about a certain place then it means there is a problem there. Why is it that oil or natural gas exploration becomes an issue when no such issue was raised when we undertook operations in the south? The revenue to be obtained there [in the north] will be reflected based on the proportionality that they agreed on, which is 17 to 83 percent. Why is there a concern about this?

Baghdad says: I have a problem that I need to solve with the north, don’t strike a deal with the north before I solve the problem.

Their Constitution says this: 17 percent of it [revenues] will be given to northern Iraq, 83 percent to the central government. We don’t make any comment on that. Then why is the rule that is valid for the south not valid for the north? Seventeen percent of the oil [revenue] from Basra is given to northern Iraq. The reverse should be valid too. This is how I see it. If Iraq is to forget its sufferings and problems and be reconstructed again, it needs to increase its revenues. Iraq is a friendly neighbor to us. Good management requires increasing its revenues from wherever possible. Why is there a differentiation between the south and the north when the issue is to increase revenues? Actually, making this sort of differentiation opens up a debate about Iraq’s integrity. We are there because we don’t make such a differentiation.

When you say “we are,” Turkey is only operating in the south of Iraq.
We are in the south, but we could be in the east, west, or north.

Yes, but has Turkey put the brakes on for going to the north?

Private companies are there.

But the KRG has invited Turkish state companies. There has even been speculation that Turkey and the KRG were very close to signing agreements.

The question we should be asked is, why aren’t you doing business? It shouldn’t be, why are you doing business? It is only normal for Turkey to be present in Iraq, when it has operations in countries like Venezuela, Columbia, Libya, and Azerbaijan.

This is precisely the question I am asking. Why, then, is Turkey not doing business in the north? Why is the Turkish state not signing deals with the KRG?

We are following developments and acting accordingly.

But isn’t Turkey lagging behind and missing opportunities in the north?

Turkey is continuing with its road map, be it with timing, or be it with procedures. Turkey is a county that does not act against international law. When we say in Cyprus that the Republic of Northern Cyprus and the administration in South Cyprus should have a fair share of energy resources, we show the same consistency here. If revenue is generated, there should not be any differentiation between the south and north [of Iraq].

The United States has been telling Turkey not to go ahead with deals in the north in the absence of the consent of Baghdad. To what degree has Turkey succeeded in bringing the U.S. to a different stance.

Others need to be as consistent as Turkey. Why was nothing of that sort said when 39 companies from 19 countries signed deals there [in the north]. This needs to be answered. What is the difference with Turkey? Oil that comes through tankers to Turkey has become an issue, but these used to go to Iran just six months ago. We are monitoring this very clearly. We need to be told the answers to these questions. It is not only Turkey that owes it to the truth. Everybody owes it to the truth. You can’t differentiate between the United States and Africa when you talk about deserving the truth. I think we have paid our debt to the truth.

So, your main message is that Turkey is sensitive to the concerns of the central government and will not seek to exclude them?

Turkey is among the countries that respects Iraq’s integrity the most. There is no need to come together in order to conduct projects, but you need to come together to create positive value.

What do you think will be the consequences of the fact that U.S. will become energy independent thanks to the shale gas it produces?

Although the U.S. has stopped purchasing natural gas in four areas where it is sold, prices have not gone down, as it has not opened its shale gas to the international market. We will continue to monitor this for the next five to six years. If there is a change in this policy, then prices will change. After Fukushima, [the 2011 nuclear disaster that occured due to an earthquake], Japan increased its LNG purchases, which led to a hike in prices. But Turkey has still not felt the effect of shale gas production in the United States.

There are claims that the United States might be getting out of the Middle East. What do you think will be the consequences of such a move?

Tension or turmoil in our region, whatever the reason for it, is always against us. The cost of the Syrian turmoil has been $10 to $12 per barrel of crude oil for us from the social, administrative, technical and energy perspectives. Therefore, the annual cost is $8 to $9 billion. We don’t favor that kind of tension. Obviously, it has a humanitarian dimension, but also when you look from the standpoint of the energy sector we need to come to a proper point with the end of international instabilities.

There are also claims that there will be an abundance in the market, because there will be new producers of natural gas, forcing Russia to revise its prices.

There is also a contraction in the world economy. There is a half point shrink in Eurasia. These are the real concerns. We don’t see much of an increase in production recourses. The price of the dollar is expected to be around $90 to $100 and a decrease in gas prices. There is hope, but there are no serious indications yet that this will happen.

Then we are not there yet to renegotiate prices with Russia?

No. We are aware of all the developments and monitor them very seriously. But we are not yet at the stage that we would like to see. We don’t see this happening for another 4.5 years, there is no such supply to the international market.

But what is Turkey’s strategy to decrease its tremendous dependence on Russia?

Let me voice my opposition to your use of the term “tremendous dependence on Russia.” Those talking about this dependence need to provide us with alternatives.

But your government is supposed to find these alternatives.

But if I can’t purchase gas from the United States and can’t get gas from Africa, I can’t explain it to my citizen. Those saying that we’re too dependent on Russia need to bring forward solutions. We will be conducting projects with whoever is necessary for Turkey’s growth, whether it be China or others. We will evaluate the projects that are proposed to us and can’t take into consideration those who do not come. There is no country for which we have a specific reservation in this sense.

If Turkey still maintains that it is an energy hub, it needs to project an image of stability in times of peace and war. How do you think the Arab Spring has affected Turkey’s will to be an energy hub?

What is sustainable for being an energy hub is the presence of energy. But this war, this tension, is not sustainable. Will we see this scene for another 30 years?

Some claim that the strains in Turkey’s relations in the region might harm Turkey’s aspiration to be an energy hub.

Look, Turkey can not make a move by disassociating its projects from international politics. Turkey will be a country that feels the tension in its neighborhood whether it likes it or not. Are we the ones who created the current situation? They tell us that we have problems with our neighbors. If having no problems with neighbors means having no principles, we just can’t do that. Like the case in Syria. Which of our citizens can say to us, let’s close the border and let them do whatever they want? You open the border and you become a side. If this brings a burden in the energy sector, then I will bear that burden. This is the practice. You become a hub as long as there are projects, and obviously Turkey says it is open to all projects. But, of course, political instabilities do harm us.

Is there a delay in nuclear energy with Russia? The Energy Ministry and the Turkish Atomic Energy Authority have cancelled bids that they had opened for legal and technical consultancies. This seems to have left energy circles in Turkey a bit confused.

But I have said in advance that these are long term projects. After Fukushima, all parameters about security are being reviewed. We are fine with that. It may be a year later, but let it be secure. Security is at the forefront.

Turkey is closed to energy cooperation with Israel until there is normalization. So is Turkey also taking the risk of being left outside the energy game in the Eastern Mediterranean?

We can’t act as if nothing happened. It is not us that should do the repairs. Those projects can’t happen without Turkey. You cannot force these projects; you need to meet at the top, not at the bottom, for these projects. You need to catch both the political and the economic feasibility.

Some suggest the state should let the Turkish private sector deal with Israel on energy issues.

These types of projects are too big to be disassociated from international politics. These projects also have a strategic approach. They are not done solely by states or the private sector. You need to approach them as a whole.