BAGHDAD, Feb 25, (RTRS): Turkey has told Iraq it will reject any extension of oil and gas pipelines from Kurdistan without the approval of the Baghdad government, Iraq’s oil minister Abdul Kareem Luaibi was quoted as saying by the state media network on Monday. Iraq’s Arab-led central government and the Kurdistan regional government (KRG), run by ethnic Kurds, are in a long-running dispute over how to exploit the country’s crude reserves and divide the revenues. Baghdad says it alone has the authority to control export of the world’s fourth largest oil reserves, while the Kurds say their right to do so is enshrined in Iraq’s federal constitution, drawn up following the US-led invasion of 2003. “Turkey has officially informed Iraq it rejects extending oil and gas export pipelines from the Kurdistan region to pass through Turkey without approval from federal government,” the network quoted the minister as saying. The Turkish energy ministry declined to comment on the statement.

Fears
Kurdistan’s Minister for Natural Resources Ashti Hawrami said earlier this month the autonomous region was pressing ahead with plans to build its own oil export pipeline to Turkey, despite objections from the United States, which fears the project could lead to the break-up of Iraq. Resource-hungry Turkey has heavily courted Iraqi Kurds, straining ties with the Iraqi central government. Prime Minister Nuri al Maliki’s media advisor Ali al-Moussawi said Turkey’s rejection of the pipeline would help enhance bilateral relations between Ankara and Baghdad, which have deteriorated over the past year. “The government welcomes Turkey’s move, which will significantly help to stablise the region and also strengthen relations between central government and Kurdish region,”” Ali al-Moussawi added. Ankara has been locked in a war of words with Maliki, a Shi’ite, since December 2011, when he ordered the arrest of his Sunni Vice President Tareq al-Hashemi, who took refuge in Kurdistan before fleeing to Turkey.

Iraqi Kurdistan halted oil exports through the Baghdad-controlled Iraq-Turkey pipeline in December in a dispute over payments to oil companies operating in the autonomous region. In early January, Kurdistan began exporting crude oil directly to world markets through Turkey, further angering Baghdad, which threatened action against the region and foreign oil companies working there to stop “illegal” crude exports.
A broad energy partnership between Turkey and Iraqi Kurdistan ranging from exploration to export has been in the works since last year.

Also:
ISTANBUL: The Turkish lira eased on Monday on persistent selling following the central bank’s decision to cut interest rates last week, and shares in Koc Holding dipped after Turkey cancelled a tender it had won to run toll roads and bridges. The lira has been under pressure since the central bank cut two main interest rates last Tuesday, and as investors’ appetite for riskier assets diminished on concerns that the US Federal Reserve would stop pumping more dollars into currency markets. Bond yields were steady, with two-year benchmark bonds inching up two basis points to 5.69 percent, and benchmark stocks eased 0.17 percent to 75,769 points, underperforming a 0.12 percent rise in the global emerging markets index.

At 0905 GMT, the lira traded at 1.7983 to the dollar , after hitting a three-month low of 1.8037 in early trade, down from 1.7965 late on Friday. Against a euro-dollar basket it fell to 2.0904 from 2.0797. “Investors continue to sell the lira after the central bank meeting. The bank’s comments about the lira’s real exchange rate and the rate cuts will likely weaken the lira for a while,” said Burcin Metin, head of forex at ING Bank.
Investors were eyeing the outcome of a meeting by Turkey’s competition regulator with a dozen banks on Monday to hear their defence for alleged collusion in setting loan rates, with a final verdict due within 15 days.

“If the joint price setting behaviour becomes the final verdict, the penalty is said to be no less than the 2 percent of the banks’ revenues and the upper limit is at 10 percent. The upper limit would hurt the profitability of banks considerably,” wrote Ayse Colak, executive vice president at Tera Brokers. Shares in Koc Holding, Turkey’s largest company, and its fellow consortium bidder Gozde Girisim fell nearly 3 percent each after the government said it cancelled a $5.7 billion they won in December to operate toll roads and bridges over the Bosphorus because the price was too low.