Oil boom in Kurdistan under threat after controversial independence vote
By Benoit Faucon, Sarah Kent and Summer Said
A move toward Kurdish independence could change the equation for Turkish President Erdo an
Iraqi Kurdistan's independence referendum Monday has returned its renegade oil industry to the spotlight, prompting Turkish President Recep Tayyip Erdo an to threaten to cut off the region's petroleum exports and Baghdad to call for a de facto boycott of Kurdish crude.
Kurdistan has built up an independent oil sector against the odds, defying Iraq's central government in Baghdad, which claims control over the country's crude revenue. The result is an industry that accounts for 80% of the Kurdistan Regional Government's revenue and that exports nearly 600,000 barrels of oil a day--about the same as petro-states like Qatar and Ecuador.
More than half the region's production is exported through a Turkish pipeline, the result of a controversial deal in 2013 with Ankara that allowed the Kurds to bypass Iraq's state oil company and sell crude independently. Baghdad has long complained about the deal, but international oil companies now routinely buy Kurdish oil and sell it abroad.
A move toward Kurdish independence could change the equation for Erdo an, who has waged a deadly, costly battle with Kurdish separatists. On Monday, Erdo an made a veiled threat to close the Kurdistan-Turkey pipeline, saying: "We own the tap, once we close it, that is done also."
An expanded version of this report appears at WSJ.com (https://www.wsj.com/articles/iraq-turkey-threaten-kurdistans-oil-boom-after-controversial-independence-vote-1506351245?mod=mktw).
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-Benoit Faucon; 415-439-6400; AskNewswires@dowjones.com
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