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UNCLAS SECTION 01 OF 03 ISTANBUL 000539 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG IR IZ JO PGOV PREL RS SY TU
SUBJECT: EXPANDED IRAQI ENERGY WORKING GROUP CALLS FOR 
GREATER COOPERATION AND BILATERAL MEETINGS 
 
REF: ISTANBUL 129 
 
¶1.  (SBU) SUMMARY: An Expanded Energy Working Group (WG) 
meeting on October 11 to assist with Iraq's reconstruction 
brought pledges and suggestions on how to best help the 
country become energy self-sufficient along with developing 
its energy export sector. The first half of the meeting 
followed the traditional Neighbor's Energy WG, i.e. briefings 
of the electricity and fuel situation in Iraq and what the 
neighbors are doing to assist. The second half was focused on 
reforming the WG to make it "results based."  This included a 
suggestion by the UN delegation that this forum also handle 
regional problems with pipelines, electric power, and water. 
The Turkish hosts made the case for Turkey as an ideal 
country to export the region's gas (especially Iraq's) to 
Europe. The WG declared in its final statement that the next 
meeting may have a parallel private sector event. 
 
-------------------------------- 
An expanded conference 
--------------------------------- 
 
¶2. (SBU) Representatives from Iraq and neighboring states, 
along with major countries and international organizations 
met in Istanbul on October 11 to discuss how to help Iraq 
overcome its energy problems. This meeting comes roughly 
six months after a smaller WG also held in Istanbul (reftel 
A). The WG provided the Iraqi delegation, led by Iraqi 
Electricity Minister Karim Wahid Hassan, an opportunity to 
describe Iraq's energy situation and call for assistance from 
WG members. The WG members all reacted positively to Iraq's 
plight, but differed on how to move forward.  Overall, the 
response to the expanded WG was positive, because we expect 
it will facilitate follow-on bilateral meetings. Of the 
neighbors, only Saudi Arabia did not attend the Expanded 
Energy WG. 
 
 
--------------------------------------------- --------------- 
Turks Want More Iraqi Energy Exports 
--------------------------------------------- --------------- 
 
¶3. (SBU) Turkish Minister Guler encouraged increased Iraqi 
energy exports using the Turkish Mediterranean port Ceyhan, 
a major outlet for Iraqi oil.  According to Guler, Ceyhan is 
not at full capacity for oil exports. Iraqi Director General 
of State Oil Marketing Organization (SOMO) Falah Al-Amiri 
indicated additional exports of oil to Ceyhan should not be a 
problem.  Regarding natural gas, Guler argued Iraqi gas could 
be piped into Ceyhan and sent to Europe via the U.S.- 
supported Nabucco pipeline or via a yet-to-be-built LNG 
terminal. Guler stated it would not take long to build a gas 
pipeline connecting northern Iraq to Ceyhan. Turks have 
expressed an interest in sending 10 BCM of Iraqi natural gas 
to Europe through Turkey.  Vural Altay, MFA Deputy Director 
General for Energy, Water, and Environment, presented  three 
options for Iraq to send its gas to Europe: 
-1)  The existing Turkey Greece Gas Interconnector (TGI) 
pipeline, 
-2) The proposed Nabucco pipeline, or 
-3) The proposed LNG terminal at Ceyhan. 
Maps in Altay's powerpoint presentation showed a potential 
gas pipeline that would go from Kirkuk to Erbil to Cizre, and 
finally to Ceyhan rather than paralleling the existing 
Iraq-Turkey oil pipeline. (Comment: This is different from 
earlier proposals to build a gas pipeline parallel an 
existing line. End comment.)  According to Guler, the Turkish 
Pipeline Company (BOTAS) is ready to help Iraq and the 
Turkish Petroleum Company (TPAO) would like to establish a 
consortium with international companies to development 
upstream gas in Iraq. The Turkish presentation on sending 
Iraqi gas through Turkey to Europe was well received by the 
EU Commission, but the Iraqis were lukewarm to the idea as 
the Iraqi delegation noted it needed to decide on domestic 
usage first before contemplating exports of natural gas. 
 
 
ISTANBUL 00000539  002 OF 003 
 
 
¶4. (SBU)  Abdulhalim Kasem, the Syrian Deputy Energy Minister 
noted his country's agreement to invest in the western Iraqi 
gas field Akkas. Note: Syria drilled six wells in Akkas in 
the 1990s.  End note.  Syrian assistance would help generate 
power for domestic Iraqi consumption while simultaneously 
exporting gas to Europe or the Gulf though the Arab pipeline. 
 Jordanian Ambassador to Turkey, Fariz Mufti also supported 
the Syrian plan to connect Iraq to the Arab pipeline. 
 
--------------------------------------------- ---- 
Helping Iraq Obtain Sufficient Electricity 
--------------------------------------------- ------ 
 
¶5. (SBU)  Hassan explained Iraq currently is suffering an 
acute electricity crisis caused by three wars, crippling 
sanctions, and the looting following the collapse of the 
Saddam Hussein regime. Iraq has been unable to invest the 
necessary funds to fix the system, Hassan continued, yet 
current stable conditions  provide an opportunity to rebuild. 
 According to Hassan, Iraq needs to increase its current 
electrical generation capacity threefold to meet demand. 
Hassan hoped a conference on electricity project tendering in 
Iraq sponsored by  the World Bank and UNDP in November will 
help Iraq supply its people with power. 
 
¶6. (SBU) Guler pointed out Turkey sends electricity to Iraq 
despite its own shortages.  Turkey's Special Envoy to Iraq 
Murat Ozcelik added he met with the Turkish private supplier 
of electricity to help fix problems regarding power outages. 
Ozcelik suggested sending an assessment team to look at both 
the Iraqi and Turkish situation and report back to the GOT 
and GOI.  Al-Amiri agreed, suggesting SOMO could assist with 
the assessment, especially regarding problems with shipping 
heavy fuel oil to the electrical generating station in 
Turkey.  Comment: Much of this problem stems from the GOI 
payment arrears to the private Turkish firm (Kartet), which 
results in power interruptions for "technical" reasons from 
Kartet. End comment. 
 
¶7. (SBU)   Kasem said Syria increased its electricity 
transmission network from Damascus to Deir oz Zour, 
therefore his country is ready to again export electricity to 
the Iraqi province Ninewa. Mufti stated Jordan negotiated 
with Iraq to build a power station in Jordan dedicated to 
export electricity to Anbar province. Hassan Danaeifard, 
Iranian Secretary of the Iran-Iraq Economic Development 
Headquarters also detailed Iran's commitment to send about 
1300 MW of electricity to Iraq (septel). 
 
--------------------------------------------- ------ 
Problems With Trucking Oil out of Iraq 
--------------------------------------------- ------ 
 
¶8. (SBU) Representatives from Iraq, Turkey, Iran (septel), 
Syria, Jordan, and Kuwait all mentioned problems with 
trucking oil in and out of Iraq.  Al-Amiri criticized the 
long delays at the Iraq-Turkey Habur Border Gate.  Ozcelik 
described the need to establish a second border gate with 
Iraq to ease the congestion at Habur Gate, reiterating a 
long-standing Turkish proposal.  Mufti appreciated Iraqi 
exports oil to Jordan; however deliveries fall short of 
thirty thousand bpd due to Iraqi problems with loading 
trucks. Mufti would like to see a pipeline to Zarqa; he 
stressed the need to talk more about this project, especially 
financing.  Kasem agreed with Al-Amiri on the need to 
rehabilitate existing oil pipelines with Syria and finalize a 
new pipeline.  Al-Amiri noted that the K Crossing in Kuwait 
was still an issue and that he would like the border crossing 
open more than 1-2 hours a day to allow greater quantities of 
diesel/gasoil to reach the Musayyib power plant. 
 
--------------------------------- 
International Support for Iraq 
----------------------------------- 
 
¶9. (SBU) The Russian delegation, headed by Sergey Vershinin, 
 
ISTANBUL 00000539  003 OF 003 
 
 
MFA Director General for the Middle East and North Africa, 
noted Russia's desire to support a united and stable Iraq. 
Last February, Russia and Iraq met regarding a commission on 
trade.  Vershinin also said Russia opened a consulate in 
Erbil. 
 
¶10. (SBU) A number of the neighbors described their efforts 
to train Iraqi technicians. Kasem credited Syria with 
training 60 technicians from MOE, with an anticipated 83 in 
the second phase. Mufti said Jordan trained 30 MOE engineers 
in August, and plans to train another 40 with the help of a 
Swiss firm. Kansuke Nagaoka, Japanese Minister-Counselor, 
credits his country with training 2,500 Iraqi engineers. 
 
 
¶11. (SBU) Despite being an Energy Working group meeting, 
Syria, Jordan, and Iran (septel) all stressed the strain 
placed on their countries by Iraqi refugees. The Syrian 
representative said Syria had received the lion's share of 
Iraqi refugees, some 2 million, which placed a 
disproportionate burden on his country. 
 
 ------------------------------------------- 
Expanded Working Group Format 
-------------------------------------------- 
 
¶12. (SBU) Hassan hoped the expanded format for the Energy 
Working Group would facilitate separate bilateral meetings 
to help Iraq's neighbors obtain an integrated electrical 
grid.  The October Working Group included many newcomers to 
the meetings such as: China, UK, Germany, France, Italy, 
Japan, Russia, the EU, the Arab League, EU Commission, and 
the Organization of the Islamic Conference. Iraqi Minister 
Councilor Mohammed Abdullah Memid also found the expanded 
format helpful. Iraqi Chairman of the Energy Committee, Jewad 
Al-Hindawi saw the value of the expanded WG to build 
necessary contacts to drive bilateral relations. Hindawi 
argued against signing agreements or conventions at the 
working group, instead the WG should follow-up on problems, 
he stated.  Vershinin from the Russian Federation agreed, 
saying the WG mandate should be defined as "creating an 
atmosphere for bilateral and multilateral meetings", yet 
there should be no signing of contracts at the WG. 
 
¶13. (SBU) The Japanese representative would like to see the 
private sector participate in future meetings and also 
suggested the next WG meeting to be held in Baghdad. Ozcelik 
noted bringing private companies in is an idea worth 
considering since they can discuss the facts on the ground. 
Private companies would also benefit from learning the rules 
and regulations of the new business environment.  The 
Expanded Energy WG agreed to hold a separate event in which 
private companies could participate.  Ozcelik also supported 
holding a meeting in Baghdad if the necessary conditions are 
in place to show the progress there, but indicated Istanbul 
remains available as a fallback location. 
 
 
WIENER