The Kirkuk-Ceyhan pipeline

The Kirkuk–Ceyhan oil pipeline that links Iraq with Turkey appears often in the news. This is mostly associated with the sabotage actions committed against the infrastructure that leads to its forced shutdown from time to time. Recently, however, the strategically important pipeline has appeared in the news in an utterly different context. President Recep Tayyip Erdoğan emphasised in one of his speeches that Turkey is in the position to close the pipeline that feeds oil to the Kirkuk–Ceyhan pipeline, thus emphasizing that for Ankara, the bare fact of holding the Kurdistani independence referendum and its outcome are equally unacceptable.

Prior to the referendum, President Erdoğan warned on various platforms – including the 72. session of the UN General Assembly – that Kurdistan has to stand off from holding the referendum, as its expected result will lead to the further destabilization of the region. For Turkey, the situation of its own 14 million Kurdish minority constitutes a top security issue, and the series of events in Iraqi Kurdistan – that has just expressed its intention to gain independence and become a sovereign state – might exert a mobilizing effect on Kurds in Turkey. From Ankara’s point of view, the chance to establish an independent Kurdish state is a severe threat to the country’s security situation, territorial integrity and regional power status. This has led to the situation that several states, including Iraq, Iran and Turkey, have started to sharply oppose the September 25 referendum and have proposed a wide range of measures to exert pressure on Erbil.

The application of restrictive measures on the various types of energy infrastructure is an important foreign policy tool in the hands of states in contemporary international relations. The gas crises of 2006 and 2009 between Russia and Ukraine constitute an illustrative example for this, when Russia turned the gas taps and stopped the export of natural gas towards Ukraine. In the current developments in Kurdistan, the situation is reversed. Turkey threatens with the potential shutdown of Kurdistan’s crude oil exports. The relations between Ankara and Erbil deteriorated in the past couple of weeks as a result of the – non-binding – referendum, despite the fact that the two governments have maintained close relations earlier. Turkey became a top investor in the semi-autonomous entity. Moreover, approximately 1400 Turkish companies operate in the Kurdistan Region of Iraq, and what is even more important from this article’s point of view is that their cooperation in the energy field is of strategic importance.

The pipeline laid between Kirkuk in Iraq and Ceyhan in Turkey has initially been the main channel of oil relations between two countries, which was the result of an 1973 agreement between Ankara and Baghdad. The geopolitical importance of this pipeline derives from the fact that it diversifies Iraq’s crude oil export routes and enables oil transport to the Mediterranean Sea, thus the quantity of Iraqi oil shipped via the maritime chokepoint of the Strait of Hormuz can be reduced. However, this pipeline has not become a success story at all, as it could not operate in its designed capacity due to the turbulent events of the past decades. As the result of the post-Gulf War oil embargo, the pipeline was shut down for years and as a consequence of the Iraqi war starting in 2003, the oil flows were halted again. Besides the shutdowns based on political decisions, there are other factors that influenced the operability of the pipeline negatively. The pipeline heading through the South-eastern provinces of Turkey has been prone to sabotage actions in the form of bomb attacks committed by PKK regularly, but with varying intensity. Only between 2006 and 2015 the Turkish section of the Kirkuk–Ceyhan pipeline had been successfully attacked at least 13 times. These attacks resulted in the forced shutdown of the pipeline for months causing thus loss of millions of dollars for oil producer Iraq and for Turkey as well, that was being deprived from the transit incomes and had to finance the reparation of damages, too.

Later, in 2013 a feeder-line of the Kirkuk–Ceyhan pipeline has been commissioned that is entitled to transport oil from Kurdistani deposits to the Iraqi–Turkish border, where it is connected to the main line of Kirkuk–Ceyhan pipeline. In the port of the latter city, Iraqi and Kurdistani oil is fed into tankers and sent to the world market. The oil deliveries via this Kurdistani pipeline have become, however, a main source of tense relations between Erbil and Baghdad. Long-continued controversies emerged between the Kurdistan Regional Government and the Baghdad-based federal government over Kurdistan’s share of federal budget. This situation urged Erbil to use the then newly built Kurdistani pipeline to gain extra incomes and thus to patch up its deficient budget. These incomes became vital for Erbil as this pipeline created the chance of earning petrodollars independently from Baghdad. These incomes were also necessary from the point of view that it was the main source of financing the war against the Islamic State, which was further aggravated by the nose-diving of oil prices starting from the autumn of 2014. Therefore, it is a relevant question whether according to Erdoğan’s warning, this pipeline will be shut down, as this would cause a major rupture in the influx of petrodollars into Kurdistan, which would significantly harm the functioning of its state administration.

What makes the current situation even more complex is that – as reported shortly before the referendum – Russia’s Rosneft is about to engage in Kurdistani natural gas business and plans to finance the construction of a pipeline in Kurdistan that would enable gas export towards Turkey. It is obvious that the construction of a pipeline carrying Kurdish gas to Turkey and potentially further on towards European markets financed by Russia can be identified as a mutual Turkish–Russian–Kurdish interest. As the above example of crude oil represents, energy export channels are the main sources of Kurdistani export incomes, while Russia’s regional position would be strengthened by its deeper integration in the power vacuum torn Middle East’s energy affairs. In the meantime, Turkey is interested in diversifying its own energy import and also to become a regional energy hub. Energy deals have long been at the centre of Russian–Turkish relations, and Russia’s advancement in Kurdistan’s energy sector would further increase the relevance of them. What is more, it could involve Kurdistan as the third player in their energy cooperation.

Accordingly, the current situation is considerably controversial. On the one hand, based on the ominous statement, Turkey would put the Kurdistan Regional Government under pressure by the means of shutting down the Kurdistani feeder pipeline of the Kirkuk–Ceyhan oil link and would thus isolate Kurdistan from the outside world. However, at the same time, Turkey would be hardly other than interested to engage in cooperation with Russia with regard to the Kurdistani gas business and to import and potentially further transport Kurdish gas towards Europe. The 25th September referendum has posed a wide spectrum of questions and it turned out that regional energy dynamics are also concerned. From Turkey’s point of view, Kurdistan is an important source for its oil import and presumably their cooperation can spill over to natural gas as well. To this end, among other things, it would be necessary that current tensions do not exceed the rhetorical level and that the previously markedly close Ankara – Erbil relations should reconcile in the foreseeable future.

Opening pic: Shutterstock