Iraq expels Turkish firm from oil exploration deal

Salam Faraj
Turkish Petroleum Corporation (TPAO) headquarters in Ankara. Iraq has expelled the TPAO from a consortium which won an exploration contract in south Iraq in the latest sign of worsening ties between Baghdad and Ankara

Iraq expelled Turkish national energy firm TPAO on Wednesday from a consortium which won an exploration contract in south Iraq, in the latest sign of worsening ties between Baghdad and Ankara.

The two neighbours have been at odds over the Syrian conflict and Iraq has publicly urged Turkey to hand over fugitive Vice President Tareq al-Hashemi, who has been sentenced to death in Baghdad on charges of running a death squad.

The exploration deal was for a tract of land in oil-rich Basra province and had been awarded in May to Kuwait Energy, TPAO and Dragon Oil of the United Arab Emirates.

"For reasons to do with non-technical issues and outside the responsibility of my office and me personally ... the Turkish company TPAO was excluded from the consortium," said Abdul Mehdi al-Amidi, head of the oil ministry's contracting and licensing department.

"This decision is final, there is no approval to sign the contract for Block 9," he added, referring to the exploration block in south Iraq. "The decision (to expel TPAO) is from the cabinet."

Amidi said the contract included provisions allowing companies' shares to be sold on to others and raised the possibility that Kuwait Energy would take over TPAO's stake, increasing its share to 70 percent in the consortium, with Dragon Oil retaining the remaining 30 percent.

Block 9 is a 900-square-kilometre (347-square-mile) area near Iraq's border with Iran.

The three-member consortium originally won the oil exploration contract for the block in a May 30-31 public auction in which they agreed to be paid a service fee of $6.24 per barrel equivalent eventually extracted.

Amidi's announcement came as Iraqi officials signed a deal on Wednesday with Russia's Lukoil and Japan's Inpex to explore a 5,500-square-kilometre (2,100-square-mile) tract of land believed to contain oil in south Iraq.

It is one of several between Baghdad and foreign energy firms to boost oil output and explore for new deposits of energy as Iraq looks to cement its role as a key global oil supplier.

Amidi did not comment on why TPAO was expelled, but the decision comes amid icy ties between Iraq and Turkey.

Last month, Baghdad moved to end Turkey's military presence in north Iraq where Ankara is pursuing Kurdish rebels, with the cabinet urging parliament to cancel treaties that allow foreign countries to maintain troops or bases on Iraqi territory, a decision that a senior official said was aimed at Turkey.

Turkey has since the 1990s maintained several military bases in the autonomous northern Kurdistan region where the Kurdistan Workers' Party (PKK) rebel group also has rear bases.

On Tuesday evening, the Turkish military carried out air strikes targeting the PKK against a village in Kurdistan, killing one Iraqi Kurd and wounding two others, a doctor in the area said.

Also angering Iraq has been Turkey's refusal for several months to extradite Hashemi, who has now been handed four death sentences over the assassination of several officials and the attempted detonation of a car bomb targeting Shiite pilgrims.

The two countries also have differing positions on the 19-month conflict in Syria, with Ankara publicly joining in Arab and Western calls for embattled President Bashar al-Assad's ouster, while Iraq has pointedly avoided calling for his departure.

In addition, Baghdad protested against an August visit to Kirkuk, a disputed city in northern Iraq, by Turkish Foreign Minister Ahmet Davutoglu without the central government being informed in advance.

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