There are several ways to observe this case study; in a simpler fashion, by selecting a certain perspective of each actors namely Turkey, KRG (Kurdish Regional Government) and Iraq. Moreover, we can ask the 5 “W”s (Who, what, where, when, why). In this paper, I’m going to briefly address the answer to the 5 “W”s. However, throughout the article each point will be elaborated upon distinctly.
Turkey and KRG signed the Ankara-Erbil agreement recently. The agreement is set out as such that KRG authorities will transfer oil and gas products to Turkey from KRG territories for over 15 years period. The agreement is an indication of KRG authorities’ capability to enhance the political agenda of KRG individually without any impulsion from Iraqi authorities from Baghdad. More importantly, this agreement is an important step in turning the Iraqi Kurdistan Region into a strategic energy partner for Turkey.
The Pros and Cons for Turkey (Ankara):
- The Pros:
o By receiving rich amount of oil and gas at a low cost, it can provide for its growing economy.
o In addition, it can partially compete with other energy corridors.
o Furthermore, Ankara hopes that if there are any ties between KRG and PKK, this agreement and growing economic relations with KRG might reduce the threat of PKK over Turkey’s security.
- The Cons:
o Political instability of Iraq has caused great problems for Turkey considering domestic PKK terrorist groups and rising Kurdish nationalism. Over the last 5 years, Turkey has displayed great interest in investing in KRG territory and with such agreement, it has expanded its economic and political relationship and ties with Iraqi Kurds but with a grave cost of losing the confidence of Baghdad.
o Furthermore, if KRG government over the 15 years period does not get full independence from Iraq, Turkey’s positioning will be even more stressed because it is in evident that Iraq will respond harshly to KRG.
o Bad relations with Baghdad could deprive Turkey to have chance to challenge other energy exporter countries in the region such as Russia. Moreover, there have been some unfinished issues between Baghdad and Ankara going back to 2010 elections.
o Ankara-Baghdad relations turned frosty in the wake of Iraq’s contentious 2010 elections. Ankara supported the secular Sunni block which lost out to Nouri al-Maliki’s Shiite bloc. As Soner Çagaptay claims; Turkey is uneasy about the potential for a “Shiite axis” along Turkey’s southern border. Fear of Iranian/Shiite influence could, in part, explain Turkey’s efforts to tighten political and economic ties with the predominantly Sunni Kurds of northern Iraq despite the political imbroglio they confront with their own Kurdish population.
The Pros and Cons for KRG (Erbil):
- The Pros:
o Enriching its relationship with an important neighboring country (Turkey) with the hope to show the world its capabilities and chances to transfer its energy resources to Europe as well.
o A large portion of this oil is to expected to be exported from the Kurdish province to Turkey via a new pipeline which will not be linked to the existing pipeline network controlled by Baghdad. This will allow the Kurdish province to sell oil unilaterally from northern Iraqi fields and operate as if it is actually an independent state.
o By entering into these energy agreements, the Iraqi Kurds are betting that closer cooperation with Ankara will bring economic and eventually political independence one step closer. Turkey is involved in many other development projects in the Kurdish province from airport construction to hotels, roads, supermarkets.
- The Cons:
o Upsetting Baghdad may induce Iraq to reduce the oil and gas percentage from its current share of 17 percent.
o An unhappy Al-Maliki might get rougher towards Kurds.
o President Nouri al-Maliki, has interrupted the flow of public money to the Kurdish autonomous government in Erbil, Hence, the Kurdish political authorities are unable to pay the salaries of more than one million of the province’s five million employees on the local government payroll – including members of the Kurdish army, the Peshmerga.
The Pros and Cons for Iraq (Baghdad):
- The Pros:
o The implementation of oil policy in 2003 in favour of Baghdad has been clearly violated and Baghdad as the legal authorities in charge are indicting that KRG broke the legal agreement between two sides. In 2003, the KRG at first accepted in taking a backseat role to Baghdad overseeing all sells of oil to international companies and countries and created a bank account in the UN specifically for the profits of oil and energy. However, it has been evident that KRG has been slowly distancing itself from the primary authority of Baghdad by engaging in private deals like the one with Ankara amongst other nations and corporations.
o With the action of KRG, it may lead to advanced precautionary measures on the part of Baghdad to restrict KRG from futures endeavours with other nations specifically when it ties in with Iraq natural resources.
- The Cons:
o A clear and present threat to Iraq’s economy interest, and national unity.
o Iraqi Kurds are selling oil and natural gas directly to Turkey, infuriating Washington and the central government in Baghdad, which fears that economic independence could lead Kurds to declare a broader political independence and the fracturing of the nation.
o “The Kurdistan deal with Turkey is a huge violation against the Iraqi Constitution because they did not make the deal with the coordination of the central government” said Ali Dhari, the deputy chairman of the Iraqi Parliament’s oil and gas committee. “This means the stealing of the Iraqi wealth and we will not allow it”, he added.
o The Iraqi authorities are really frustrated and shocked by the actions of KRG.
o An energy deal between Turkey and Kurdistan, says Baghdad, would be “an encroachment on the sovereignty of Iraq.”
The agreement can be interpreted in various ways as seen above which can undoubtedly affect three vital issues in Iraq and most importantly in the region;
1-) Security stability,
2-) Political stability,
3-) Economic credibility.
The energy agreement might affect future security trust between Baghdad and Ankara. Most importantly, Ankara has made it evident that it favors and promotes the security and independence of KRG through their business engagement with them. Secondly, the energy agreement is an indication of the political capability of KRG in gaining autonomy from Baghdad. However, it contrasts Baghdad and Ankara, these political relations have soured due to these agreements and might result in further political instability in the region such as sectarian-ethnic conflicts. Additionally, Iraq might engage with a neighboring country like Iran due to their religious-sectarian similarities against this energy agreement. Thirdly, the energy agreement is an indication of the trust Ankara has placed in the KRG since the fall of Saddam’s regime in 2003. However, from Baghdad’s perspective Ankara has broken their bilateral trust (such agreement indicates that KRG are transporting illegal form of natural resources, thus KRG is identified as stealing the natural resources, and in result it translates into Ankara stealing from the Baghdad administration) and will thus lessen their trust and engagement level with Ankara.
The disturbing fact about several of news article is the lack of information in provides. In other words, the claims are in such a way that KRG are exporting oil to Turkey without the consent of the Iraqi government, yet it does not provide to vital piece of information;
1-) Exactly which part of Iraq and specifically which cities where the oil extracted from,
2-) Does KRG have the political freedom to engage with Turkey using the natural resources that belong to Baghdad (Iraq),
3-) One can suggest that Turkey is taking advantage of the unstable political dilemma issues in Iraq by exporting vast quantities of oil.
 Walid Khoudouri, “Erbil-Ankara oil agreement threatens Iraqi’s Unity”, Al-Monitor, 15.12.2013, http://www.al-monitor.com/pulse/business/2013/12/oil-kurdistan-turkey-threat-baghdad.html#, Accessed on 3 May 2014.
 Eli Lovely, “Ankara tightens relations with Erbil to the chagrin of Baghdad”, Global Risk Insight: Report, Accessed on 3 May 2014.
 Richard Rousseau, “Who Is Allowed To Sell Oil In Iraq – Baghdad Or Erbil? – Analysis”, Eurasia Review, Accessed on 3 May 2014.
 Tim Arango, “Kurds’ Oil Deals With Turkey Raise Fears of Fissures in Iraq”, New York Times, Accessed on 3 May 2014.