The Turkish Petroleum International Company (TPIC) has struck a deal with oil and gas giant ExxonMobil to explore and develop hydrocarbons in the Kurdistan Region of Iraq
According to Turkish prime minister Recep Tayyip Erdogan, TPIC, a subsidiary of state-owned Turkish Petroleum Corporation (TPAO), will enter into a partnership with the Kurdistan Regional government (KRG) and ExxonMobil to explore and develop hydrocarbons in the firm’s six untapped blocks in the region.
Siddik Bakir, Middle East and South Asia energy analyst at IHS Energy, said, “Countries from various parts of the world are taking steps to explore and produce oil in different parts of Iraq and deliver it to world oil markets. Turkey has provided support and aid to its next-door neighbour, taken a step that is based on mutual benefit.
“The Kurdistan Regional government has a constitutional right to 17 per cent of hydrocarbons revenues. Since it has the ability to readily spend that share, it's in its right to use that in exchanges with Turkey.”
Bakir said that this deal is arguably the culmination of the budding energy-fuelled relationship between Turkey’s AKP-government and the KRG in Erbil, which has evolved since 2007.
Given Turkey’s high demand for energy and its dependence on oil and gas imports, the country has developed a strategic alliance with the KRG over the past years hoping to benefit from the potential oil and gas exports coming from Kurdistan Region of Iraq.
Faisal Abdullah, a spokesperson for Hussein al-Shahristani, Iraq’s federal deputy prime minister for energy, however, said, “The deal is illegal and is not in line with the Iraqi constitution.”