Iran, which sees post-American Iraq as part of its sphere of influence under Tehran's expansionist plans, isn't happy about this situation either.
But Turkey seems determined to establish itself as the primary oil and natural gas hub between East and West.
Russia, Turkey's main gas supplier, is alarmed, too, at Ankara's efforts to take advantage of the political upheavals of the Arab Spring to restore its pre-World War I influence across the Middle East and Central Asia.
"Without securing its independent energy supplies, Turkey can never act as a major regional power," Marwan Kabalan, dean of the Faculty of International Relations at Diplomacy at the University of Kalamoon, Syria.
Iraq's Kurds have battled with the Baghdad government over oil revenues and drilling rights since the U.S. invasion of 2003 toppled the Baathist regime. That dispute heated up in October 2011 when the U.S. oil giant Exxon Mobil signed a landmark deal with the Kurdish Regional Government to explore in six areas, defying Baghdad which insisted it had sole authority in awarding energy contracts.
Things got even hotter in May, when the KRG's oil minister, Ashti Hawrami, dropped a bombshell by announcing the landlocked Kurds and Turkey planned to build a 1 million-barrel-a-day pipeline to Turkey's giant oil terminal at Ceyhan on the eastern Mediterranean.
Under the first phase, the pipeline would reach the border by August 2013, then connect to Ceyhan. A second pipeline is planned for 2014. Ceyhan is currently the terminal for the 1 million bpd pipeline running from Baku, capital of Azerbaijan on the Caspian Sea, through Georgia to Turkey.
"A KRG-Turkey pipeline would do wonders as a PR move expanding Turkey's role in providing oil and gas to Europe now that the interminable Nabucco pipeline opera seems to be condemned to the dustbin," noted Asia Times Online's Pepe Escobar.
"Geopolitically, the European Union and NATO would be delighted to finally have an alternative to reduce Russia's Gazprom stranglehold on the European energy market."
The energy links between Ankara and Erbil, the seat of Kurdistan's government, would allow the Turks to use "the strengthened economic grip on the KRG to induce cooperation in denying refuge" to Turkey's Kurdistan Workers Party, or PKK, observed the U.S. global security consultancy Stratfor.
"Turkey could then also exploit a pool of energy resources to fulfill its geopolitical potential as Eurasia's primary energy hub."
Iraqi Kurdistan, which currently spans Iraq's three northern provinces, has oil reserves estimated at 45 billion barrels -- enough to last 70 years -- and natural gas reserves of at least 105 trillion cubic feet.
Meantime, relations between Iraqi Prime Minister Nouri al-Maliki's Shiite dominated coalition government in Baghdad and Ankara have been sinking, in part because of Turkey's constant incursions against PKK guerrillas holed up in Iraqi Kurdistan.
Turkey, overwhelmingly Sunni Muslim, is increasingly concerned at Shiite Iran's growing influence in Shiite-majority Iraq following the U.S. military withdrawal in December.
Maliki is incensed by Turkey's Islamic prime minister, Recep Tayyip Erdogan, giving sanctuary to Iraqi Vice President Tasheq al-Hashemi accused by Baghdad of masterminding Sunni death squads.
Hashemi denies that and claims evidence against him was obtained by torture.
The KRG's links with Ankara were tightened May16-17, when Kurdish Prime Minister Nechirvan Barzani visited Ankara for talks with Erdogan, Turkish President Abdullah Gul and Foreign Minister Ahmet Davutoglu, architect of Turkey's drive to become the paramount power in the region.
The KRG has exploration contracts with around 40 small or mid-level foreign oil companies. But the jewel in its crown is Exxon Mobil, the first international oil major to defy Baghdad and make a deal with the Kurds, whose ultimate objective is an independent state.
Hawrami, the KRG oil minister, says he expects more oil majors to follow Exxon Mobil in the next few months -- the most likely candidates are France's Total and Statoil of Norway -- a development that would send tensions between Baghdad and Erbil sky high.
Exxon hasn't begun drilling and it's keeping a low profile for the time being. But oil industry sources say it has issued a tender for drilling rigs.
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