TURKEY RAISES CONCERN ABOUT STALLED OIL EXPORTS

C O N F I D E N T I A L ANKARA 006302

SIPDIS


FOR CPA ADVISER TO IRAQ OIL MINISTRY


E.O. 12958: DECL: 10/06/2013
TAGS: EPET ETRD IZ PREL TU
SUBJECT: TURKEY RAISES CONCERN ABOUT STALLED OIL EXPORTS
THROUGH TURKEY

CLASSIFIED BY DCM ROBERT DEUTSCH FOR REASONS 1.5 (b) AND (d).





1. (U) Baghdad Minimize considered.



2. (C) Turkish officials are concerned by recent press
reports that Iraq has decided to suspend oil exports through
Ceyhan, diverting the Kirkuk crude through pipelines to the
south. MFA Director General for Energy and Water Hakki Akil
told EconCouns that Turkey learned of the apparent decision
through the press and asked if the USG could verify the
report. ECONCouns responded that we were not aware of any
decision, only that repair work on the pipeline was
continuing. Akil said that under the terms of SOMO's
agreement with Turkey, Iraq must export 35 million tonnes of
crude per year through the pipeline or face penalties.
Mehmet Bilgic, the head of Turkey's state pipelines and
natural gas company, also raised his concern that the
coalition has not yet resumed exporting Iraqi crude through
the Kirkuk-Ceyhan pipeline and that there was little
communication from Baghdad on these matters. Bilgic noted
that the suspension of exports through the pipeline resulted
in enormous revenue losses for Iraq -- and Turkey. Bilgic
said that BOTAS had offered to help in the repair work and to
provide firefighting teams, but the authorities in Baghdad
had not responded to BOTAS's offer.



2. (C) Action Request: Turkish officials were surprised by
reports that Iraqi authorities have decided to suspend oil
exports through the pipeline for another six months. Such a
long delay would be a serious blow for the GOT. They are
frustrated that they have not been more involved in the
pipeline project and are concerned that any decision not to
use Kirkuk-Ceyhan might represent a change in U.S. policy.
We believe improved, sustained communications between SOMO
and BOTAS would be beneficial and request CPA's assistance in
encouraging this dialogue. In addition, Embassy requests
that Department/CPA advise on the status of the pipeline and
on what, if any, decisions have been made on diverting oil
from Kirkuk south. Embassy also requests points for use with
GOT officials on this subject. Finally, Embassy would
appreciate any information about the status of the offer made
by BOTAS to Iraqi authorities to assist with pipeline
repairs.
EDELMAN