Oil exports from autonomous Iraqi Kurdistan to Turkey could start next month, the region's prime minister said as he held talks in Ankara Wednesday on planned energy tie-ups that are likely to anger Baghdad.
Kurdish authorities in Iraq are seeking ways of selling their oil on international markets outside the control of Baghdad but a lingering dispute with the central government has paralysed development of new oil and gas projects in the region.
Prime minister Nechirvan Barzani told reporters in Ankara late Tuesday that a pipeline from the Kurdish region could start carrying oil "before Christmas", without elaborating.
He held a three-hour meeting with Turkish Prime Minister Recep Tayyip Erdogan and Energy Minister Taner Yildiz on Wednesday to discuss comprehensive energy deals between Ankara and Arbil.
The pipeline project to Turkey is projected to carry up to 300,000 barrels per day (bpd), a fraction of the total 2.25 million bpd OPEC-member Iraq exported in October.
Turkey, which is dependent on Russia and Iran to meet its growing energy needs, is seeking to secure affordable oil and gas supplies from elsewhere, with Kurdistan seen as the best option.
"We told Iraqi Kurds that if they bring their oil to the border, we will buy it," a government official told AFP on condition of anonymity.
But the deals risk aggravating tensions in the powderkeg region and harming relations with Baghdad.
Hussein al-Shahristani, Iraq's deputy prime minister responsible for energy affairs, said after meeting Turkey's ambassador that Iraq's energy resources belonged to all Iraqis under the constitution.
"The authorised side to export and receive financial profits is the central government," he said in a statement.
Turkey has been developing ties with Iraqi Kurdistan, and Erdogan held talks with Kurdish leader Massud Barzani in Turkey's own Kurdish dominated southeast earlier this month.
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In the past, Turkey refused to engage in official contacts with Iraqi Kurds, fearing the establishment of an independent Kurdish state there could embolden its own Kurds.
But as Turkey's economy has boomed and its thirst for energy grown, Erdogan's government has moved to forge trade ties with Iraqi Kurds.
In an address during Barzani's visit, Erdogan for the first time referred to the autonomous region in northern Iraq as "Kurdistan", a long taboo word in Turkey.
Ankara, Baghdad burying the hatchet
Ankara is however also keen on repairing ties with Baghdad, which have been strained for several years, and has offered to mediate in the oil dispute.
Yildiz said last week that Ankara could serve as an independent intermediary by having Iraq's oil revenues deposited into an escrow account at a Turkish state bank.
Turkey's parliament speaker Cemil Cicek held talks in Baghdad on Tuesday, two weeks after a landmark trip by Foreign Minister Ahmet Davutoglu aimed at securing a "fresh start" in relations.
Iraq's Shiite Prime Minister Nuri al-Maliki is expected to visit Turkey soon, according to Turkish officials, while media reports say Erdogan is planning to go to Baghdad and Arbil.
A Baghdad-controlled oil pipeline runs between Kirkuk in Iraq and the southern Turkish port of Ceyhan but it operates well below its capacity of 1.5 million barrels per day.
Mete Goknel, former director of Turkey's state-owned pipeline company Botas, said the energy projects with Iraqi Kurds were finalised in September.
A 220-kilometre (140-mile) pipeline from the Khurmala oilfield south of Arbil is expected to ship crude to Habur on the Turkish border, he told AFP.
From there, the pipeline will be connected to the existing Iraqi-Turkish line. The second plan is to build a parallel pipeline from Khurmala for natural gas.