Turkey Signals Change of Iraq Oil Line Status

ANKARA (Reuters)–Turkey said on Wednesday it was preparing to declare officially open an oil pipeline from Iraq should US lawmakers pass a resolution embracing allegations of Turkish genocide against Armenia’s 85 years ago.

The Turkish move appeared to constitute a symbolic blow against Washington over the resolution–passed by the US House of Representatives International Relations Committee last week and now due to go before the full house.

Although Turkey officially closed the pipeline a decade ago to comply with Gulf War sanctions on Iraq–Ankara has allowed exports on the line for the past four years as an operational concession to facilitate a UN humanitarian oil for food exchange.

Under sanctions there are now no limits on how much Iraq may export on the 1.5 million barrel per day line that runs from Iraq’s Kirkuk fields to Turkey’s Mediterranean port of Ceyhan–or on another route via Iraq’s Gulf Mina al-Bakr port.

Turkish state pipeline company Botas is helping coordinate an upgrade of the 616-mile twin pipeline on the Iraqi side–which is run down due to a lack of spare parts.

"Minister Cumhur Ersumer has ordered that the pipeline be made ready for full operation," a senior official–speaking for the ministry–said.

"A team of pipeline officials from (Botas) is now in Iraq and they have reported that the pipeline’s pumping station on the Iraqi side can pump at full capacity," he told Reuters.

The energy ministry official added that Turkey was ready to buy all the oil from the pipeline if Iraq failed to get customers in Western markets.

"We had been a good customer for Iraqi oil before the UN embargo anyway," he said without elaborating.

It was not immediately clear whether Iraq would seek UN permission for those potential purchases.

The official added a cabinet decision would be required to declare the pipeline officially reopen. "We are doing the technical work as the ministry but the actual go-ahead should come from the government," he said.

Ankara says it has lost $30 billion in trade revenue including $1.5 billion only from the stoppage of the pipeline because of its support of UN sanctions–including restrictions on oil deliveries. Turkey sees the congressional move–criticized by President Bill Clinton–as a deep affront.

It has also alluded to the possibility it might stop US warplanes using its Incirlik airbase for sorties to enforce a no-fly zone over northern Iraq.

Ersumer told US officials in Ankara earlier this week that passing the resolution at the House could undermine energy deals involving US firms the ministry said were worth $11 billion.

Asked if the move to possible reopening of the line was a symbolic action–an Ankara-based oil analyst said:

"It may look so initially–but there are already several breaches of the UN embargo."

A second Turkish private plane carrying aid and medical supplies to Iraq in two days landed in Baghdad earlier in the day despite UN sanctions.

Turkey has been officially condoning trucks bringing in cheaper Iraqi diesel since the Gulf Crisis to help people in its economically backward southeast.

The pipeline has been open only for UN-monitored deliveries since late 1996 under oil-for-food sales aimed at providing humanitarian help to the Iraqi people.

While deliveries were limited in the early years of the program–a UN resolution passed in December 1999 removed the ceiling on the amount of oil Iraq was allowed to sell.

Since then the key restriction on Iraqi oil export volumes has been production capacity at the wellhead in Iraq. This in turn is affected by the availability of spare parts whose supply is controlled by a UN sanctions committee–experts say.

Under the program–Iraq deposits its oil revenues in a UN escrow account out of which suppliers are paid after approval from the Security Council or UN officials or both. Almost a third is siphoned off for Gulf War compensation.

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