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Iraqi Kurds declare "oil independence"
18.9.2007
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September
18, 2007
Erbil-Hewler, Kurdistan region (Iraq), --
Iraqi Kurds fed up with the bickering in Baghdad and
the failure of the central government to pass a
comprehensive hydrocarbons law have virtually
declared their independence signing new oil
contracts with western companies and legislating
their own oil law in August in the Kurdistan
Regional Parliament.
Iraqi Oil Minister Minister Hussain al-Shahristani,
has declared the contracts that the Kurds signed
null and void while the Kurds have called for his
resignation…
The Kurdistan Regional Government (KRG) signed a
production-sharing contract with Hunt Oil Co. of
Texas, U.S., the first such deal since the Kurds
passed their own oil and gas law.
Ashti Hawrami, the regional government's minister of
natural resources, said in a statement that the
signing by Hunt is evidence the government's new oil
and gas law has created "a supportive and
transparent business environment which promotes
investment by international oil companies in our
region for the benefit of all." Shahristani at a
recent meeting of OPEC in Vienna said that all oil
contracts signed in Iraq's Kurdish region are
"illegal" as a controversial oil law is yet to be
passed in the parliament.
Oil Minister Shahristani should quit rather than
"interfere in the internal affairs" of the Kurdish
region, KRG spokesman Khalid Saleh told reporters in
Erbil.
In a separate statement, the KRG said the minister
was "strongly advised to stay out of issues over
which he has no authority."
"But once again he has repeated his false mantra of
'it is illegal'. Unfortunately this has been his way
of dealing with the legitimate concerns of the hard
working oil union members in the south, with the
achievements of the KRG or with any other
organization that he does not like." The statement
said the minister must focus on preventing "illegal
oil smuggling under his watch, which is crippling
the Iraqi economy."
Saleh said if Shahristani failed in this he should
resign and allow some other "person more qualified
than him" to do his job.
The regional government also accused the minister of
favoring contracts signed with companies who
operated during the former regime of Saddam Hussein.
"The answer is to get on with the agreed draft oil
law and present it without changes to the
parliament. That way we will all get on with the
task of developing the oil industry for the benefit
of the people," the KRG said.
Iraq's oil infrastructure has been hit by decades of
under-investment as a result of successive Gulf
wars, 13 years of UN sanctions and the rampant
insecurity that followed the US-led liberation in
2003.
Washington regards passage of the controversial oil
legislation as key to efforts at national
reconciliation in the country which is wracked by an
insurgency and sectarian violence.
However, that law is facing an uncertain future.
Last week there were reports that a carefully
engineered compromise on the draft oil agreed in
February after months of hard talks among Iraqi
political groups, appears to have collapsed.
Shahristani negotiated the original deal.
Senior Iraqi negotiators met in Baghdad last
Wednesday in an attempt to salvage the original
compromise but the meeting came against the backdrop
of the clash between the oil minister and the KRG.
Sources in Baghdad tell The New Anatolian that
Shahristani, is a hard nut to crack for the Kurds as
he is a senior member of the Arab Shiite coalition
that controls the federal government, which
negotiated the oil law compromise with leaders of
the Kurdish and Arab Sunni parties.
The problem the Kurds face is that without Baghdad's
consent they cannot sell the oil even if they
extract it.
The oil law - which would govern how oil fields are
developed and managed - is one of several benchmarks
that the Bush administration has been pressing the
Iraqis to meet as a sign that they are making
headway toward creating an effective government.
The legislation is already at the Iraqi Parliament,
which has been unable to take virtually any action
on it for months. Shiite say the law could not be
passed because Kurds are signing arbitrary deals
with foreign oil companies while the Kurds say
because the Shiite and Sunnis stalled the law they
had no other option but to go their own way.
The New York Times said last week The Sunni Arabs
who removed their support for the deal did so, in
part, because of a contract the Kurdish government
signed earlier with a company based in the United
Arab Emirates, Dana Gas, to develop gas reserves.
The Kurds say their regional law is consistent with
the Iraqi Constitution, which grants substantial
powers to the provinces to govern their own affairs.
But Shahristani believes some kind of Kurdish
declaration of independence can be read into the
move. "This to us indicates very serious lack of
cooperation that makes many people wonder if they
are really going to be working within the framework
of the federal law," Shahristani said in a recent
interview, before the Hunt deal was announced.
The other crucial players are the Sunnis. Some
members of one of the main Sunni parties, Tawafiq,
demand federal control of contracts and exclusive
state ownership of the fields, bolted when it became
convinced that the Kurds had no intention of
following those guidelines.
Prime Minister Nouri al-Maliki has suggested
returning to the original language agreed to in
February and trying once again to push the law
through Parliament. Iraq's Deputy Prime Minister Dr.
Barham Salih says there is basic agreement on
returning to that language, but conceded that Sunni
participants insist on a deal that includes changes
to the Iraqi Constitution to safeguard their
interests in the distribution of revenues. A law on
how the revenue should be shared is being developed
as a critical companion to the oil law.
The central element of the compromise was agreed to
in February after months of difficult negotiations
among Iraq's political groups.
The main parties in those negotiations were Iraqi
Kurds, who were eager to sign contracts with
international oil companies to develop their
northern fields; Arab Shiites, whose population is
concentrated around the country's southern fields;
and Arab Sunnis, who have no meaningful oil
resources in their areas.
Those facts meant that the compromise law had to
satisfy both the Sunni insistence that the central
government maintain strong control over the fields
as well as the push by the Kurds and Shiites to give
provincial governments substantial authority to
write contracts and carry out their own development
plans.
Many of the debates centered on a federal committee
that would be established to review the contracts
signed with oil companies to carry out the
development and exploitation of the fields. The
Kurds objected to any requirement that the committee
would have to approve contracts. So in a nuanced bit
of language, the negotiators gave the committee the
power only to reject contracts that did not meet
precisely specified criteria.
But problems immediately surfaces after the cabinet
approved the draft law and it went to a council that
was supposed to adapt the language to be sure it
complied with Iraqi legal conventions.
When the draft emerged from that council, the
members of some parties, particularly the Kurdish
ones, thought that the careful balance struck in the
draft had been upset, and they accused Shahristani
of meddling. Then the law stalled in Parliament and
Iraqi Foreign Minister Hoshyar Zebari told The New
York Times that Kurds decided to send a signal that
they would not wait indefinitely and signed the
contract with Dana Gas.
"It served as a reminder: 'If you keep stalling,
life goes on,' " said Zebari, who is Kurdish.
thenewanatolian com
** Since 1991, the Kurds of Iraq achieved self-rule
in part of the country. Today's teenagers are the
first generation to grow up under Kurdish rule. In
the new Iraqi Constitution, it is referred to as
Kurdistan region.
Kurdistan region has all the trappings of an
independent state -- its own constitution, its own
parliament, its own flag, its own army, its own
border, its own border patrol, its own national
anthem, its own education system, its own
International airports, even its own stamp inked
into the passports of visitors.
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