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ERBIL, Kurdistan-Iraq, Feb.3 - Kurdish
officials are inviting foreign oil companies to
explore untapped reserves in their northern region
(Kurdistan), angering Arab countrymen and raising
concern about chaos in Iraq's oil industry.
Kurds, their self-ruled federation firmly enshrined
in Iraq's constitution, believe they are reclaiming
their right to control northern oil fields
(Kurdistan oil fields) after successive Iraqi
regimes purged Kurds from the industry to bring it
under exclusive Arab control.
Despite the Iraqi industry's many problems - falling
production, crumbling infrastructure and relentless
insurgent attacks - the prospect of drilling in the
world's second-largest proven reserves has led eight
small foreign companies to invest in Kurdish-ruled
territory.
One of them, Det Norske Oljeselskap, or DNO, of
Norway, struck oil in December, less than a month
after starting to drill in Zakho near the Turkish
border.
Major oil companies have so far shied away from
Kurdistan until the new Iraqi parliament elected in
December clarifies articles in the constitution on
the control of oil and until security improves.
The constitution stipulates that the federal and
regional governments will share management of
existing oil fields, as well as strategies for
developing future areas and distributing the
profits.
The document, however, also makes ambiguous
references providing compensation for areas such as
the Kurdish and Shiite regions that were "damaged"
and "unjustly deprived" under Saddam Hussein.
The constitution, ratified in a referendum in
October, defers a decision on the future of Kirkuk,
the center of the northern oil fields, which Kurds
want to be part of the Kurdish federation.
Because each region will control future oil
discoveries in its own area, the Sunni minority,
which lives Iraq's oil-poor center, may not benefit
equally from the riches.
However, Western oil officials in Kurdistan
(northern Iraq) say the entire country is floating
on unexplored oil reserves, including the central
regions.
Iraq is estimated to have 265 billion barrels of
unproven reserves and 125 billion barrels of proven
reserves.
Of those, an estimated 36 billion barrels are in
northern Iraq. Less than 10 percent of the region
has been explored, according to Heritage Oil, one of
the eight foreign companies carrying out studies in
Kurdistan.
Iraq is also estimated to have 100 trillion cubic
feet of natural gas.
"Saddam regarded the oil in Kurdistan as his
personal property," said Delshad Abdul-Rahman
Mohammed, head of the Oil Projects in the Kurdish
regional government of Sulaimaniyah.
"Kurdistan's share of the profits was the money
Saddam received to buy chemical weapons to decimate
the Kurdish people."
Kurdish officials in both Sulaimaniyah and Irbil
insist that they will share the oil wealth with the
rest of the country and that agreements made with
foreign companies are made in coordination with the
central government in Baghdad.
"This oil belongs to all Iraqis. Profits from the
oil don't only go into the pockets of Kurdistan,"
said Mohammed.
He said oil companies signed memorandum of
understanding with the Kurdish regional governments
and the central government "so that the regional
government will not have any problems in the
future."
In addition to DNO, oil companies exploring in
Kurdistan include Petoil and General Energy Corp.,
both of Turkey; Woodside of Australia; and Canadian
companies Western Oilsands Inc. and Heritage Oil
Corp., which has formed a joint venture with Eagle
Group of Iraq, based in northern Iraq.
Western oil experts predict friction between the
Kurdish regions and the central government on future
oil explorations, but according to Western oil
company officials, it's a risk worth taking.
Iraqi oil experts are not as confident.
"Without a central unified policy it is expected
that disharmony and competition ... would be the
rule of the day, a situation which is in contrast to
that of a unified federated country, and which shall
have serious consequences for technical reasons,"
said oil consultant Tariq Shafiq in a report.
Iraqi and Western oil experts say Kurds lack
technical and managerial skills needed to go it
alone. They say officials in the ministry of natural
resources in the new Kurdistan regional government
are inexperienced in the oil business.
But Kurdish officials are not apologetic and blame
the previous regimes for purging the oil industry of
Kurdish talent and skills, especially in Kirkuk, and
replacing them with mostly Arabs.
"We can buy trained men," said Mohammed. "Saddam's
ethnic cleansing policy against Kurds drained the
region of its best qualified men. There are scores
of educated Kurds who currently work with
international companies and who can help us."
The region, he added, will also seek the help of
Iraqi Arabs in the field.
AP
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