|
Kurdistan region pulling away from Iraq's
control
8.8.2012
By Dr. John C.K. Daly - The Oil Price |
|
|
|
August 8, 2012
Iraq’s Kurdistan Regional Government's (KRG) is
increasingly signing unilateral oil deals with
international oil giants, bypassing Baghdad.
Iraq’s central government is insisting that all such
regional deals first be cleared by the Iraqi
government, but the oil majors have apparently
concluded that such diplomatic niceties are largely
irrelevant in their search for profits, and are now
cutting deals directly with the KRG in Iraqi
Kurdistan’s capital Erbil.
The latest Western oil major to bypass the
government of Iraqi president is the French energy
giant Total, which in 31 July issued a press
statement noting, “Total has completed an
acquisition of 35 percent interest in two blocs,
Harir and Safen, held by (U.S. company) Marathon
Oil... The blocs respectively have a surface of 705
square kilometers (272 square miles) and 424 square
kilometers (163 square miles).”
Almost as an afterthought, the company added, “Total
confirms its commitment to help develop the Iraqi
oil sector and to invest in new projects.”
What Total’s decision has done is throw into sharp
relief the disparity between Western oil companies’
desire for profits at any cost and Baghdad’s
weakened negotiating position with same.
The ostensible reason behind the U.S.-led invasion
of Iraq in March 2003 was to overthrow the
dictatorial regime of Iraqi President Saddam
Hussein, whose administration allegedly harbored
“weapons of mass destruction,” a charge since proven
to be false.
Not the fragmentation of Iraq into a Kurdish north,
Sunni central heartland and a Shia-dominated south.
Yet that is in fact what’s happening, and Western
governments which participated in “Operation Iraqi
Freedom” are apparently unwilling or unable to rein
in their rapacious oil companies, who are further
undercutting the authority of Baghdad over its
territory, day by day.
In any case, Total is the late-comer to the party –
U.S. oil concerns Chevron and ExxonMobil have
already signed unilateral exploration with the KRG
authorities in Erbil, as has Britain’s Gulf
Keystone, which has acquired concessions for Iraqi
Kurdistan’s Akri-Bijeel bloc,www.ekurd.net
where a fourth exploration well, Gulak-1, will be
drilled. Gulf Keystone CEO John Gerstenlauer said,
“Gulak-1 is part of the operator's extensive
exploration and appraisal program on the massive
Akre-Bijeel block and the fourteenth well to be
drilled across Gulf Keystone's four blocks in the
Kurdistan Region of Iraq. In addition to three wells
currently drilling on the Akri-Bijeel block
(Bijell-3, Bakrman-1 and Gulak-1), the program also
includes the drilling of three additional appraisal
wells (Bijell-2, Qalati-1and Qandagul-1),” Iraqi
Kurdistan’s AKnews information agency reported.
Baghdad is not taking the developments lying down.
Iraqi Prime Minister Maliki and his oil adviser
Hussein al Shahristani claim that the KRG oil and
natural gas contracts are "illegal" and
"unconstitutional" even as the KRG insist that the
deals are in full accordance with the Iraqi
constitution and the KRG’s own 2007 oil and natural
gas legislation which Erbil insists was compliant
with the Iraqi constitution. The Iraqi government is
now threatening legal action against the KRG over
the contracts.
But nothing in the Middle East occurs in a vacuum,
and the KRG’s export pipelines transit Turkey.
The Kirkuk-Ceyhan pipeline, commissioned in 1976,
the pipeline runs for 620 miles from Kirkuk and
nearby oilfields in northern Iraq to Turkey’s
deep-water Mediterranean port of Ceyhan. In 1987, a
second pipeline was added, running parallel to the
first, but while the twin pipelines currently have a
combined capacity of 1.5 million barrels per day of
crude oil, the lines currently are underutilized,
transporting 500,000 bpd of Iraqi Kurdish oil to
Ceyhan.
While this pragmatic arrangement currently benefits
both sides – Erbil get its export revenues and
Turkey collects transit fees, Ankara has other
issues with the KRG, most notably its ambivalent
attitude towards the outlawed separatist Marxist
Partiya Karkeren Kurdistan (Kurdistan Workers'
Party, or PKK), which has been mounting guerrilla
attacks into Turkey from northern Iraq since 1984.
Needless to say, Turkey would like to see the KRG
rein in, or better yet, quash the PKK, but the KRG
government is reluctant take action, because it
would both be politically unpopular and the
battle-hardened PKK “Peshmerga” fighters could offer
significant resistance.
So, in the meantime, the governments that backed
“Operation Iraqi Freedom” allow their energy firms
to weaken Baghdad’s central authority and the Turks,
while cashing their transit fee checks, nervously
wonder if Erbil’s increased revenues will eventually
prompt it to declare unilateral independence, with
all its ominous implications for Turkey’s own
Kurdish minority.
Accordingly, it would be optimistic to think that
Western political leaders might call in their more
buccaneering oil company executives and tell them to
stop doing end runs around Baghdad and support
Western strategic objectives in strengthening Iraq’s
central government, as the only long-term eventual
outcome may well be a further fragmentation of
political authority and a return to the bad old days
of Iraqi civil war in the aftermath of Saddam’s
ouster.
But this seems unlikely, given how oil company
donations underwrite political campaigns and their
hordes of lobbyists infest Western capitals. As
Michael Corleone observed, “It’s just business.”
Dr. John C.K. Daly is the chief analyst for
Oilprice.com, Dr. Daly received his Ph.D. in 1986
from the School of Slavonic and East European
Studies, University of London. While at the Central
Asia-Caucasus Institute at Johns Hopkins
University's Paul H. Nitze School of Advanced
International Studies, where he is currently a
non-resident scholar, in 199 he founded The
Cyber-Caravan, which continues today under the
title, The Central Asia-Caucasus Analyst. He
subsequently served as Director of Programs at the
Middle East Institute in Washington DC before
joining UPI as International Correspondent.
Copyright ©, respective
author or news agency,
oilprice.com
Top |
Kurd Net
does not take credit for and is not responsible for the
content of news information on this page
|
®
