Reuters reported that Iraq's semi autonomous Kurdish region may begin selling natural gas directly to Turkey within 2 years a move likely to anger the central government and further strain Baghdad's ties with Ankara.

The Kurdistan Regional Government in the north of the country and Baghdad have rowed for years over issues including late payments for crude, the legality of the regional government's oil deals and disputed territory. Baghdad accuses the Kurds of smuggling their oil abroad, mainly to Iran and wrecking the central budget by denying it revenue.

Mr Ashti Hawrami KRG Minister of Natural Resources said that "Even if there's no consensus with Baghdad, we will continue to sell natural gas and oil to Turkey. We plan to sell 10 billion cubic meters of natural gas to Turkey and later Europe in the long term. Sales were expected to begin within 18 months to 2 years.

The KRG is obliged to attract investment from abroad. If we left everything up to Baghdad this would not work. Once the poorest region of Iraq, Kurdistan is now at its most prosperous, having been largely insulated from the insurgency and sectarian violence in the south and the regional government has increasingly become less reliant on Baghdad.

According to US Department of Energy data, for now the region largely depends on receiving 17% of the national budget but the KRG estimates there are about 45 billion barrels of oil reserves in the north, most of it as yet untapped. While there are no official figures for gas reserves in Kurdistan, Iraq as a whole has the world's 10th largest reserves at 112 trillion cubic feet.

Most Kurdish oil is still pumped into the national pipeline system. One pipeline carrying about 60,000 barrels per day already feeds directly from Kurdistan's Tawke oilfield into the main pipeline to the Turkish port of Ceyhan. The move to bypass Baghdad could further strain ties between the central Iraqi government and Turkey which has forged solid political and trade ties with Iraq's Kurds in recent years.

Mr Zafer Caglayan economic minister of Turkey said that about 70% of Turkey's exports to Iraq are to the north. If the Kurdistan region were a country, it would still be Turkey's eighth biggest export market.

Source - Reuters

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