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Turkey says aware of Iraqi concern on Kurdish oil projects

Saturday, 2 Nov 2013 | 2:40 PM ET

ANKARA, Nov 1 (Reuters) - Turkey is aware of Iraq's concerns about Iraqi Kurdistan's energy projects and will take them into account, Turkish Energy Minister Taner Yildiz said on Friday, after the semi-autonomous region said it would build a second oil pipeline to Turkey.

The pipeline, by offering a route to Western markets, may encourage northern Iraq's Kurdistan Regional Government (KRG) to seek greater independence from Baghdad, with which it has been at loggerheads over oil-production contracts and revenue sharing.

"The central Iraqi government has two fundamental sensitivities and these are justified sensitivities," Yildiz told reporters.

"One is to determine the amount of crude oil that is exported and the other one is to monetise these exports and implement that. Turkey will be mindful of these sensitivities."

Baghdad has repeatedly warned that any Turkish deals with the hydrocarbons-rich KRG may breach its agreements with Iraq.

Iraq's deputy prime minister for energy, Hussain al-Shahristani, told Reuters on Thursday that he had conveyed Baghdad's views to Turkish Energy Minister Taner Yildiz.

"Turkey is aware of Iraq's concern and total rejection of that (KRG pipeline) plan.....Turkey assured us they respect that agreement and they will not allow any export of Iraqi crude without the permission of the federal government in Baghdad," Shahristani said.

A pipeline built by the KRG is already complete and is being tested to be ready for operation in early 2014.

Ashti Hawrami, the KRG's natural-resources minister, said on Thursday in Istanbul that the region now wants to build a second link with Turkey as it targets production of 3 million barrels of oil per day eventually for export.

The second link is expected to run parallel to the ageing Kirkuk-Ceyhan pipeline administered by Baghdad.

Yildiz said talks held over the past two days with various Iraqi officials were positive. "We have both spoken to Hawrami and Shahristani. We are not in a position to take any sides, we have no such wish," he said.

He added that Turkey wants to boost energy cooperation with Baghdad, including raising capacity on the outdated Kirkuk-Ceyhan crude pipeline and building a new link.

The ageing double-pipe Kirkuk-Ceyhan is operating at a fraction of its capacity and is regularly knocked out of action by sabotage or technical faults.

"Increasing all of Iraq's revenue is among Turkey's aims. As long as political borders remain intact, Turkey is seeking to expand its energy parameters in every country," Yildiz said.

Turkey, with little hydrocarbons of its own, has in the past increased trade links and energy cooperation with the neighbouring Kurdistan region of Iraq, raising the ire of Iraqi Prime Minister Nuri al-Maliki.

But Ankara may now be seeking to mend fences with the Baghdad government in Baghdad, and its ally Iran, as the crisis in Syria drags on. On Friday, the foreign ministers of Turkey and Iran met in Istanbul and signalled a thaw in their relations.

(Writing by Humeyra Pamuk; Editing By Barry Moody and Sonya Hepinstall)