VZCZCXRO8681
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHAK #0614/01 0780739
ZNR UUUUU ZZH
R 190739Z MAR 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 1362
INFO RUCNRAQ/IRAQ COLLECTIVE
RUCPDOC/USDOC WASHDC
RHEBAAA/DEPARTMENT OF ENERGY WASHDC
RHEFDIA/DIA WASHDC
RUEHAK/USDAO ANKARA TU
RUEAIIA/CIA WASHDC
RUEKJCS/SECDEF WASHDC//USDP:PDUSDP/ISA:EUR/ISA:NESA//
RHEHAAA/NSC WASHDC
RUEUITH/ODC ANKARA TU
RUEKJCS/JOINT STAFF WASHDC//J-3/J-5//
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFIUU/HQ USEUCOM VAIHINGEN GE
RHMFISS/HQ USCENTCOM MACDILL AFB FL
RHMFIUU/425ABS IZMIR TU//CC//
RHMFIUU/39ABG INCIRLIK AB TU
RUEPGAB/MNF-I C2X BAGHDAD IZ

UNCLAS SECTION 01 OF 02 ANKARA 000614 
 
SIPDIS 
 
USDOE FOR CHARLES WASHINGTON 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EPET PREL TU IZ
SUBJECT: TRILATERAL IRAQ GAS GROUP MEETS FOR FIRST TIME IN ISTANBUL 
 
REF: A) 06 ANKARA 6745 
B) 06 ANKARA 6690 AND PREVIOUS 
 
¶1.  (SBU) SUMMARY: U.S., Turkish, and Iraqi officials met March 9 in 
Istanbul to discuss potential development of Iraq natural gas 
production for domestic use and export via the "Southern Corridor" 
network of gas pipelines to Europe.  The group agreed to cooperate 
on attracting gas sector investment, pipeline security, development 
of oil/gas pipeline networks, electricity generation, and Iraq's 
national master plan for gas production and distribution. 
Participants agreed to meet again at a date to be determined.  The 
immediate next step is to coordinate drafting an action plan to 
identify opportunities and overcome (some significant) obstacles to 
stimulating gas production in Iraq.  End Summary. 
 
--------------------------------------------- -- 
Emphasis on Collaboration - Long-term Potential 
--------------------------------------------- -- 
 
¶2.  (SBU) EUR DAS Matt Bryza, supported by a team from NEA, EEB, and 
Embassies Baghdad and Ankara, represented the USG.  The Turkish 
delegation was led by Energy Minister Hilmi Guler, who was 
accompanied by senior representatives of his ministry, state 
pipeline company BOTAS, and state oil company TPAO, as well as MFA 
Deputy Iraq Coordinator Murat Ozcelik.  Iraq was represented by 
Hunar Hassan, DG of the North Gas Company.  The Iraqi Embassy did 
not attend. 
 
¶3.  (SBU) All parties stressed that the meeting was a first step. 
Guler emphasized Turkey's desire to help Iraq increase security and 
meet domestic energy needs, and urged consideration of sending 
excess gas to Turkey for consumption in Turkey and export to Europe. 
 Hassan described the difficult situation in Iraq, underlining that 
Iraq was in dire need of new investment to help it stem gaps in 
provision of electricity and natural gas.  Bryza stressed 
U.S.-Turkey energy cooperation, including collaboration on a 
"southern gas corridor" to help Europe diversify its gas supplies. 
He emphasized that this meeting was a first step among the three 
countries to expand gas production in Iraq.  Bryza urged the group 
to focus on attracting investment to Iraq's gas sector to help 
satisfy Iraq's domestic needs an allow export to Turkey and Europe. 
 
 
------------------ 
Turkey Offers Help 
------------------ 
 
¶4.  (SBU) Minister Guler urged Iraq to consider export of gas to 
Turkey for Turkish consumption, potential LNG processing at Ceyhan, 
and pipeline export to Europe.  He stressed that Turkey's BOTAS 
could provide technical assistance and training on pipeline 
security, particularly for the oft-sabotaged Kirkuk-Ceyhan oil 
pipeline.  TPAO offered a presentation on how Turkey could assist 
Iraqi gas development, emphasizing the company's previous experience 
in northern Iraq.  The company noted that it had personnel and 
materials positioned in close proximity to Iraq, and deep geological 
knowledge of northern Iraq.  The TPAO team estimated Iraq's proven 
gas reserves at 3 tcm, as well as potential reserves at 3 tcm.  TPAO 
identified a number of promising regions: "Zone A" in the north 
comprising 500 BCM non-associated gas; "Zone B" in the north with 
480 BCM associated gas; and "Zone C" in the south with 2000 BCM. 
TPAO worked with Shell in a 2004 study that concluded there was 
significant gas export potential.  BOTAS stressed that Iraqi gas 
sources could be connected to the Turkish grid about 240 km from the 
border near Diyarbakir or there could be a new gas pipeline parallel 
to the Kirkuk-Ceyhan pipeline.  BOTAS said they had great 
expectations for Iraqi providing up to 10 BCM of natural gas per 
year that could help fill the Nabucco pipeline to Europe. 
 
¶5.  (SBU) Iraqi rep Hunar Hassan stated that Iraq welcomed 
assistance from the U.S. and Turkey.  Noting significant oil 
reserves of 115 billion barrels and ample reserves of gas, he said 
 
ANKARA 00000614  002 OF 002 
 
 
that once security was attained Iraq was committed to attract 
investment to develop these resources.  Hassan said the Iraqi 
government is focused on bringing the hydrocarbon law to completion, 
which he was confident would happen over the next few months.  He 
said Iraq would need to rehabilitate existing power plants and 
rebuild the petroleum industry, which would require over $20 billion 
in investment. 
 
¶6.  (SBU) MFA Deputy Iraq Coordinator Murat Ozcelik stated that -- 
in order to move forward on cooperation on energy and other areas -- 
Turkey wanted to resolve its problems with Kurds in northern Iraq. 
He pointed out that he would be attending the P-5 plus neighbors 
meeting in Baghdad the following day.  After Mr. Hassan indicated 
that he was an ethnic Kurd who observed harmony among Kirkuk's 
varied ethnic groups throughout his life, the MFA rep stated that 
Turkey needed to resolve its problems with the Kurds to assure a 
healthy relationship with Iraq. 
 
---------- 
Next Steps 
---------- 
 
¶7.  (SBU) Bryza suggested that the group forge the following topics 
into an action plan for trilateral cooperation: 
 
- Improving the investment climate, building on Iraq's new 
hydrocarbon law, (which parliament had not yet enacted); 
- Providing technical assistance and training for pipeline 
security; 
- Finalizing and implementing the national gas plan, with a focus on 
increasing production for both domestic consumption and potential 
export; 
- Cooperating on augmenting Iraq's electricity provision, including 
considering increased export from Turkey; 
- Assisting in developing a broader oil and gas pipeline network, 
including extensions to Turkey for export. 
 
¶8.  (U) The immediate next step is to coordinate drafting of an 
action plan, including identifying a date and location for a next 
meeting.  Embassy will work with the Department and the Turkish 
Ministry to make this happen. 
 
¶9.  (U) This cable was cleared by EUR DAS Matt Bryza. 
 
Wilson