How Turkey’s chaos has undercut Kurdish and Israeli oil and gas ambitions

June 4, 2013
Obsession
Energy Shocks
June 4, 2013

Until a few days ago, there seemed to be an inexorable reordering of two major swaths of the Middle East. The region’s Kurds seemed on the cusp of achieving greater political autonomy, and Israel appeared to be at least potentially on its way to obtaining an export pipeline for its natural gas. But Turkey’s now five-day-old protests—which intensified today when unionized public workers called an anti-government strike—seem likely to disrupt both of these trends.

The reason: Turkish Prime Minister Recep Tayyip Erdogan, the target of the demonstrators, is an architect and an essential political actor in both the Kurdish and Israeli shakeups, part of a strategy of expanding Turkey’s influence abroad. But rather than pushing along these aims, Erdogan seems bound to spend weeks or months distracted by domestic unrest, which also threatens his ambition to change the constitution and win re-election as president next year.

Erdogan’s Kurdish initiative first attracted attention in April 2011, when he visited Erbil, the capital of Iraqi Kurdistan. He was two years into a campaign to finally resolve a long, bloody conflict with Turkey’s own Kurdish population, which made the Erbil visit—the first of any senior Turkish leader to the northern Iraqi province—highly emotive. For decades, much of the region—Iran, Iraq, Syria and Turkey—had violently suppressed its restive Kurdish populations. Now Turkey was expressing sympathy for the cultural and political freedoms that the Kurds had long sought.

Just six months later, the Iraqi Kurds signed an oil exploration deal (paywall) with ExxonMobil. Together with Erdogan’s visit, the agreement stirred regional politics: Defying the wishes of Baghdad, Turkey and Exxon would help the Iraqi Kurds establish economic independence, starting with the construction of direct oil and natural gas pipelines. The agreement with the Iraqi Kurds also involved an Erdogan truce with the PKK, the militant Kurdish movement in Turkey.

Two years later, on May 14 of this year, Erdogan announced that Turkey’s state-oil company itself would partner with Exxon in the Kurdistan deal. That put Turkey’s economic benefit at the center of Iraqi Kurdistan’s objective to pull away from Baghdad.

The protests in Istanbul’s Taksim Square only weeks later have not yet focused on Erdogan’s foreign policy, apart from voicing the national resentment over his support for Syrian rebels. But Ross Wilson, former US ambassador to Turkey and now head of the Eurasian division of the Atlantic Council, says they nonetheless undercut both Erdogan’s reconciliation with Turkish Kurds and the oil developments in Iraqi Kurdistan.

ExxonMobil declined to comment. But in Iraq, Erdogan’s high-stakes policy flouts both Iraqi Prime Minister Nuri al-Maliki and Washington, who have warned the Turkish leader to stop backing the Kurds. That makes him a necessary general without whose authority the delicate process will likely stall. His approval is required in particular to push forward the planned construction of dedicated oil and gas pipelines to Turkey, the key to monetizing Iraqi Kurdistan’s natural resources.

“In order to export substantial quantities of oil, the Iraqi Kurds need the acquiescence of Turkish authorities,” Wilson said. “The pipelines are on hold and will remain on hold.”

Similarly, there seems little chance of progress on the idea of building a natural gas pipeline from rich offshore Israeli fields to the Turkish market.

Israel’s eastern Mediterranean fields have the equivalent of 5 billion barrels of oil, sufficient to provide the country energy security for decades, along with a robust flow of export earnings. But without Turkey the gas may be bottled up: Experts say that proposed alternatives, including an undersea pipeline to Greece and a liquefied natural gas facility, are too expensive.

But the proposed pipeline had been stalled by Erdogan, who broke off relations with Israel over its 2010 raid on a Turkish flotilla to Gaza that left nine people dead. Erdogan had been demanding an apology as a condition of reopening relations between the two countries. In March, Israeli Prime Minister Binyamin Netanyahu called Erdogan with the apology.

Since then, the two countries have been in talks over reparations, another required step before pushing forward with fully restored relations and movement on the proposed pipeline. But with Erdogan’s attention now focused on Taksim, Israel has no one of decisive authority on the Turkish side to advance the reparations discussion, or the pipeline plans.

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