Oil transit fees due to Turkey amounting to $229mn have gone missing since they were routed through an offshore entity on the British Crown Dependency island of Jersey, Turkish opposition lawmaker Deniz Yavuzyilmaz (@yavuzyilmazd) has claimed.

“This is called international robbery,” the New Party MP wrote on social media, describing the English Channel self-governing island of Jersey as  “a money laundering haven”.

Yavuzyilmaz alleged that the Kurdistan Regional Government (KRG) in northern Iraq paid $494.2mn to the Jersey-based Turkish Energy Company (TEC), established by the Turkish government, in 2019 for the conveying of oil through the Iraq-Turkey Crude Oil Pipeline (also known as the Kirkuk–Ceyhan Oil Pipeline) to the Mediterranean port of Ceyhan in southern Turkey.

However, audited financial records indicate that only $264.9mn reached Botas, Turkey’s state-owned oil and gas pipeline operator.

Yavuzyilmaz backed up his findings with photos of official documentation. Photos showed Deloitte’s 2019 audit of the KRG oil sector, a Turkish court of accounts (Sayistay) report on Botas and findings from Turkey’s state audit board (DDK).

“Criminal facts”

In a tweet, the MP referred to “criminal facts packaged by [Turkey’s ruling Justice and Development Party] AKP as a diplomatic success”.

He added: “To date, we have disclosed the segment covering the years 2014–2018 regarding the irregular oil transportation via the Iraq–Turkey Crude Oil Pipeline. Now, we are opening the 2019 file.”

The piping of oil to Ceyhan, which Baghdad said occurred without its approval, has already caused substantial fiscal damage to Ankara. In 2023, the International Chamber of Commerce (ICC) ruled in favour of the Iraqi federal government in a landmark arbitration case, finding that Turkey breached a 1973 pipeline agreement by allowing KRG crude exports without Baghdad’s consent.

Shutdowns, relaunches and media confusion

The ICC ordered Turkey to pay approximately $1.5bn in damages to Baghdad. This sparked a complete shutdown of the northern export route, paralyzing roughly 450,000 barrels per day of crude that should have flowed on to global markets via Turkey.

The KRG later relaunched the pipeline, and with the reignition of the US/Israeli conflict with Iran that has led to the blockading of the Strait of Hormuz, an energy transit corridor chokepoint for Gulf energy exports, Iraq’s central government has also swung behind the operation of the pipeline.

On Iraqi territory, the 600-mile (970-kilometre) Kirkuk-Ceyhan (Kirkuk-Yumurtalik) pipeline branches off into many different lines, causing confusion in international news reports. For instance, contrary to some reports, the KRG connection remained active while the branches under the full sway of Baghdad were damaged by Islamic State attacks.

New deals devised in Ankara

The 1973 agreement, signed by Ankara and Baghdad to cover pipeline oil volumes for a period of 50 years, expired in June after extensions ran out. On July 9, the governments of Turkey and Iraq signed a one-year extension deal to keep the pipeline operational until a final agreement is hammered out and secured.

On July 28, Iraqi PM Ali Faleh al-Zaidi was in Ankara. On August 1, Turkey and Iraq signed an agreement that authorises the piping of 750,000 barrels per day of oil to be supplied by Iraqi government-run suppliers SOMO and NOC.

Yavuzyilmaz responded by posting on social media: “The terms of this new agreement such as oil transit fees, payment methods and dispute resolution mechanisms are once again being kept hidden from the public.”