UPDATE 1-Turkey joins with Exxon, Iraqi Kurds in oil exploration

Tue May 14, 2013 12:43pm EDT

Related Topics

* Energy cooperation with Iraqi Kurds hot topic in U.S. visit

* Partnership between Exxon, KRG to be discussed with Obama

ANKARA May 14 (Reuters) - A Turkish firm is partnering with the Kurdistan Regional Government (KRG) and Exxon Mobil to carry out oil exploration in northern Iraq, Turkey's prime minister said on Tuesday, taking Turkey's cooperation with Iraqi Kurds on energy one step further.

Oil is at the heart of the fight between the Arab-led central government in Baghdad and the ethnic Kurdish-run northern enclave as they dispute control over oilfields and territory and the sharing of crude oil revenues.

Exxon, a global oil company based in Texas, was the first to sign up for exploration deals with the KRG. Others including Chevron, Total and Russia's Gazprom Neft have followed.

Prime Minister Tayyip Erdogan said an agreement was in place for a Turkish company to become a partner with Exxon and the KRG and that details would be clearer after his U.S. visit.

"Our oil company already has an agreement with Exxon Mobil in place ... This is a step with the KRG on exploration work," Erdogan told reporters at Ankara airport before heading to the United States for an official visit. He is due to meet U.S. President Barack Obama on Thursday.

Until now, resource-hungry Turkey has been a customer and a transportation outlet for oil exports from the Kurdish region. With this agreement, the Turks would play an active role in exploiting Iraqi Kurdistan's rich hydrocarbon resources.

Baghdad says it alone has the authority to control exports from Iraq and that deals between oil companies and the KRG are illegal. Leaders of the autonomous Kurdish region say their right to control oil resources is enshrined in Iraq's federal constitution, drawn up following the U.S.-led invasion of 2003.

Turkish industry sources said the likely partner is Turkish Petroleum International Company (TPIC), an arm of state-run Turkish Petroleum (TPAO). A spokesman for the company could not immediately be reached for comment.

Washington, wary of the divisions between Baghdad and the Kurdish region, has urged passage of a long-delayed national oil law to resolve the standoff, which has intensified since the last U.S. troops left in December 2011.

"We will develop our steps after this visit," Erdogan said, referring to the plans for northern Iraq, without specifying what the agreement would involve.

The Turkish company will take equity stakes in a partnership with Exxon and KRG and would become part of the production-sharing agreement, an Ankara-based energy source said.

Another energy official in Ankara said any contracts would be in the form of commercial agreements signed between companies, not an agreement between governments.

During his U.S. visit, Erdogan will seek Obama's support for further energy deals that Turkish companies are hoping to strike in northern Iraq.

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