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Iraq boosts energy links with Turkey

BAGHDAD, March 31 (UPI) -- Baghdad and Ankara reinforced energy links with a new agreement that will keep Iraqi oil pumping from the northern Kirkuk oil fields to Turkey's Ceyhan terminal on the Mediterranean.

Meantime, Turkey's state-owned Turkish Petroleum Corp. is negotiating to drill in the rich Rumaila oil field in southern Iraq as part of Baghdad's drive to upgrade and expand its long-neglected oil industry.

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The Turkish concern reportedly is prepared to drill 45 wells in Rumaila's southern sector that could triple the field's output to 2.8 million barrels per day. A deal could be signed by the fall.

All this enhances Turkey's strategic ambition of becoming the key energy hub for Middle Eastern and Central Asian oil and gas moving westward to an energy-hungry Europe.

Negotiations for renewing the Kirkuk-Ceyhan pipeline agreement, which expires at the end of March, began in 2009 and were sealed this month by Iraqi Deputy Oil Minister Ahamd al-Shamma and Turkish Energy Minister Taner Yildiz.

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The 625-mile pipeline, with two trunks, has a combined capacity of 1.6 million barrels a day. But it has been operating at around one-third of that because of disruption to Iraq's oil output following the U.S. invasion of March 2003.

Iraq plans to boost its output of around 2.3 million barrels a day to 10 million-12 million within six years as its fields are upgraded by foreign oil companies under 20-year production licenses awarded in 2009.

Kirkuk accounts for about one-third of Iraq's output. The oil ministry says Kirkuk exported 12.7 million barrels via Ceyhan in February, compared to 45.2 million from the southern fields that are shipped via the Gulf.

"Expansion of the Kirkuk-Ceyhan oil pipeline fits in with recently announced Turkish strategic plans to turn Ceyhan into a fully integrated oil hub over the next five years," Asia Times Online, which monitors regional energy affairs, said.

Turkey is already the western terminal for the Baku-Tbilisi-Ceyhan oil pipeline from Azerbaijan's Caspian Basin via Georgia.

Earlier this year, Iraq was moving toward exporting between 5 billion and 10 billion cubic meters of natural gas a year to Turkey, gas that would be funneled into the Nabucco pipeline project.

That is intended to carry natural gas 2,000 miles from the Caspian Sea basin through Turkey to Austria to feed Europe and break Russia's stranglehold of its gas supplies.

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Turkey is reported to have signed up Iraq's semi-autonomous Kurdish enclave to provide 8 billion cubic meters a year of gas for transit.

But this, and Baghdad's commitment to boost the Kirkuk-Ceyhan throughput, may prove to be something of a gamble.

Iraq's Kurds want to establish a separate state in their enclave in the northeast bordering Turkey and Iran. There is a major dispute over the future of the Kirkuk fields.

The Kurds, who want them to be the economic backbone of their state, insist that Kirkuk is historically part of the Kurdish provinces that existed under the Ottoman Empire until its demise after World War I.

Baghdad doesn't want to relinquish the energy-rich region that from the 1970s was heavily colonized by Arabs as part of Saddam Hussein's campaign to crush rebellious Kurds.

With Iraq in ferment following a dead-heat parliamentary election and the prospect of wide-scale sectarian violence erupting once again, the country's stability appears to be in doubt -- and with it all commitments regarding oil and gas supplies.

Still, in January, EU Energy Commissioner Andris Piebalgs signed a memorandum for a strategic energy partnership with Iraqi Oil Minister Hussein al-Shahristani in Baghdad.

EU energy experts believe that Iraq could provide between 5 billion and 10 billion cubic meters per year, including the gas from Kurdistan.

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In July 2009, Iraqi Prime Minister Nouri al-Maliki announced in Ankara to prospective Nabucco users that his country could provide up to 15 billion cubic meters a year by 2015. That's half the pipeline's planned capacity.

That commitment too could be in danger if Maliki fails to cobble together a coalition to trump his main rival, former premier Iyad Allawi.

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