OIL EXPLORATION, IRAQI BORDER TRADE CAUGHT IN TURKISH

UNCLAS ADANA 000220

SIPDIS

SENSITIVE

NOT FOR INTERNET DISTRO, COMML PROPRIETARY INFO

E.O. 12958: N/A
TAGS: EPET ETRD ELTN ECON TU ADANA
SUBJECT: OIL EXPLORATION, IRAQI BORDER TRADE CAUGHT IN TURKISH
SECURITY WEB?

REF: ADANA 144


1. (SBU) Summary: AMCON Adana conoff's met with Chevron and
Iraqi border province regional business officials on 11/9,
taking the temperature on regional attitudes about cross-border
trade and energy exploration potential. Conoff's encountered
frustration from multiple contacts, but a desire to persevere in
the face of what they considered narrow GoT security agendas
hampering potential regional economic development. End Summary.

2.(SBU) In a 11/9 dinner meeting, a regional chamber of
commerce official already knowledgeable of the Chevron proposals
offered that he had discussed the potential of the project with
regional Jandarma officials. They reportedly had replied that
the exploration proposal's potential clearly was of interest to
provincial officials, but that it also was a "national security
issue where the decision would be affected by regional security
and personnel safety considerations." (Note: Part of the
proposed seismic exploration area, which is a smaller part their
more extensive southeastern Sirnak province license area, is
adjacent to the Iraqi border and much of it is in hilly country
where Turkish military units have conducted counter-PKK
operations in past years, although reportedly not in 2005. End
Note,)

3.(SBU) Meeting with Chevron-contracted international
exploration staff officials on 11/10 in Cizre, conoffs heard
resigned acceptance that their more ambitious and - more
importantly, more authoritative data-yielding - seismic survey
proposals for their TPAO exploration license area near Silopi
once again had been postponed - this time until Spring/Summer

2006. As a result, Chevron had worked with the Turkish
Petroleum Authority (TPAO) to seek Turkish General Staff (TGS)
approval to do alternative less invasive and shorter-duration
gravity and magnetic field studies in the license area.

4.(SBU) Based on regional security concerns, TGS reportedly
decided to allow a qualified permit that would allow only
Turkish national-staffed field work in the license area.
Consequently, Chevron international staff had come to Silopi in
late October to oversee the implementation of, and analyze the
results from, a TPAO-led field survey. Chevron officials in
Silopi said that they were doing "what we are being allowed to
do, rather than what you normally would do to conduct efficient
exploration. It is a something rather than nothing" approach,
the lead Chevron-contracted international field staffer said.

5.(SBU) In a 11/13 meeting in Ankara with Chevron executives,
conoff heard a corroborating characterization of the mixed value
of the then concluding field work in Silopi, but a determination
to persevere in the hopes that TGS would allow more meaningful
seismic exploration starting in April/May 2006.

6.(SBU) During a 11/9 meeting, Sirnak CCI President Halil Balkan
expressed hope for a better economic future through exploitation
of the regions oil and mineral resources, as well as expanded
border trade with Iraq. Balkan said that GOT political concerns
had created problems for Sirnak business with Iraq. He
explained that when the GOT slowed Customs work at the border
because the Kurdish flag was flown on the Iraq side or when the
passports of travelers entering Iraq had been stamped with a
Kurdish Regional Government (KRG) stamp, these GOT political
reactions indicated that the GOT did not want northern Iraq to
become prosperous, and was making such calculations at the
expense of the economy of Turkey's southeast region.

7.(SBU) Balkan told us that the Sirnak CCI had taken its
concerns to the Parliament, and the Ministries of Trade and
Interior, but had received no responses. Balkan opined that the
government's predisposition to deny the KRG the status of a
credible interlocutor and its continued assertion that there was
"a vacuum of authority in Northern Iraq" seemed to be preventing
the GOT from taking more calibrated and measured long-term
decisions about the regions economic development. (Comment:
this sentiment was echoed by conoffs' 11/9 contact as well, who
noted that he had a relative who worked with the KRG in northern
Iraq. He said his relative said that KRG officials felt Turkish
officials would not accept them as interlocutors. End Comment.).

8.(SBU) Baghdad minimize considered.
REID