Posted on 05/15/2007 9:44:06 AM PDT by Sleeping Beauty
To Iraq's Kurdish leadership, the issue of how to apportion the third-largest pools of oil in the world is "a make-or-break deal" for the country as a whole, a top official told United Press International.
"The oil issue for us is a red line. It will signify our participation in Iraq or not," Qubad Talabani, son of Iraqi President Jalal Talabani and the Kurdistan Regional Government's representative to the United States, said in an interview from his Washington office.
The KRG and the central Iraqi government reached a deal in February on the hydrocarbons framework -- though not on other key companion bills -- and a self-imposed deadline of late May seemed possible to meet.
But the Iraqi Oil Ministry, at a meeting it set up last month in Dubai, in the United Arab Emirates, with other Iraqi oil experts and politicians, unveiled the annexes to the hydrocarbons law -- its list distributing control of oil fields between central and KRG control -- and a law reestablishing the Iraq National Oil Co., which Kurdish leadership automatically rejected.
"This sets us back to square one, a point that's unacceptable to us. We're trying to modernize Iraq, build a new Iraq, built on new foundations, new policies. The symbol of this new Iraq will be how it manages its oil infrastructure," Talabani said. "And if people want to revert back to Saddam-era policies of a state-controlled oil sector with no accountability, with no accountability to the parliament or the people of the country, with no oversight except from one or two, then I'm sorry, that is not the Iraq that the Kurds bought into. That is not the Iraq that the Kurds would want to be part of."
"If a centralized oil regime is imposed on us, we will not participate in the state of Iraq," Talabani said. "And we have to make it absolutely clear to our friends in Washington, to our brothers in Baghdad, this is a make-or-break deal for Iraq."
He said Iraq needs to embrace the free market and break free from the nationalized mindset. Numerous oil and Iraqi experts as well as key Iraq oil union leaders have told UPI that Iraqis see nationalized oil with pride. And opponents of the oil law also say it gives too much to foreign companies.
The Kurds, however, have little to show from the Saddam Hussein era, aside from persecution, death and little investment in its economy or oil sector. They gained autonomy in 1991 and, governing an autonomous three-province region now, are prospering. Airplanes fly internationally from the airport in Irbil, Iraqi Kurdistan's capital. Violence in the region is relatively nil compared with the rest of the country, though the first major attack in more than four years killed 14 people in Irbil Wednesday. Despite lacking the law, the KRG has signed multiple deals with foreign companies to develop its oil and natural gas sector.
Iraq only produces about two million barrels per day. With investment -- domestic or foreign -- Iraq's 115 billion barrels in reserves could handle much higher output.
Many of the arguments over the law are related to the 2005 constitution. It was written vaguely to garner support. Now there is a dispute as to which oil fields are to be governed by the central government and which by the regions.
Tariq Shafiq, an Iraq oil expert now living in Amman, Jordan, and drafter of the original law last summer, said the Iraq National Oil Co. should be independent of the oil ministry, and regions could choose the company's board of directors. (Shafiq has since come out against the law, saying it has been altered too much in negotiations.) He said Iraq needs a central strategy for the best management of the country's oil.
Talabani said the KRG favors an INOC limited in scope and open to foreign investment, and says the current law gives INOC control over 93 percent of Iraq's oil. "This will hamper needed investment," he said.
"It's only by bringing in the biggest and the best from the international community, to partner with, not to steal, but to partner with the Iraqi government, can we develop Iraq's oil accordingly," Talabani said. "And there's a worrying unwillingness to act under a free-market-style concept here. It won't go through. It won't go through the parliament this way. There will be too many people opposed to it."
Other bills needing to be passed include a reorganization of the oil ministry and the revenue-sharing law. Talabani said there were lingering fears Kurds will again be deprived of funds and investment.
"We want to create an automatic payment mechanism where it doesn't rely on the goodwill of the finance minister or the oil minister for the regions to get their fair share," he said.
"Trust is lacking in Iraq, and unfortunately it's been Iraq's miserable history that has created this system, this society that mistrusts each other, which is why something as critical as oil can be a trust-building measure," Talabani said. "By putting in place mechanisms and institutions that can ensure that I will not get robbed again, that my resources will not be used against me again, will eventually over time build my trust."
Reading too many NY Times quagmire stories?
*shrug* Sometimes I do...
You didn’t know about Alaska Oil Royalties? It’s how they get people to live in that frozen wasteland.
As to your other statement, nowhere in that article does it say the Kurds oppose revenue sharing. They oppose a national oil company. Here’s what they say about revenue sharing:
“”We want to create an automatic payment mechanism where it doesn’t rely on the goodwill of the finance minister or the oil minister for the regions to get their fair share,” he said”
So they are FOR revenue sharing, they want it to be based on free market, not some oil minister, and be an automatic payment to all regions that makes sure they all get their “fair share”. Under Saddam, the Kurds got almost NONE of the oil revenue, and they fear corrupt politicians will take the money and give it to their supporters instead of the Kurds.
The only outcome I see is that no matter what, the US taxpayers (and their descendants for generations to come) are going to get stuck paying off the holders of all those T-Bills to the tune of almost a Trillion dollars.
Maybe the genius brain trust in DC should cut a deal with which ever faction will agree to pay us back and sell us oil below market.....................
You're right. I assume they are currently piping it through Iraq.
When we pipe oil through Canada, I assume we pay Canada.
All I know for sure is that without this oil revenue sharing bill signed by the Iraqi government -- now -- they will remain locked in a worsening civil war and Americans will not willingly continue to sacrifice our soldiers and our treasure while they slug it out and bleed us dry.
The real bottom line is that we need this oil. It's a national security issue. We need the oil more than we need to kill Al Qaeda in Bagdad and its environs.
So, what do you suggest we do if the Kurds pull out of the Iraq Parliament? (Followed by the Sunnis.) Back to square one?
I didn't even know they existed. I assume you are the expert on that.
This is a critical thinking thread.
I'm not so sure which is the greater priority...
LOL! BWHAHAHA!! Thanks..whew...I needed the laugh. That's got to be the most pie in the sky, unrealistic, load I've heard in at least a week. I would point out the glaring differences between the two regions but I realize 'conservatives' don't like real compare and contrast between current and past police actions...
I honestly didn't. But now I am looking it up. Maybe I can afford a second home and have my share of the oil revenues pay for it. It's better than an IRA.
As to your other statement, nowhere in that article does it say the Kurds oppose revenue sharing. They oppose a national oil company.
You are right. I jumped to fast conclusions because I see a vast gulf that cannot be crossed -- at least not in time to prevent the fall of the Iraqi government. I really don't want to start over again. You know? And I really want to walk away with the oil -- to help make up for all the sacrifices we made for these people.
I'm not so sure which is the greater priority...
Well, I'm a capitalist. Can't help it. Get the money first, then kick their butts.
It would make the war easier to sell at home, as well.
As usual, a content-less post.
Well, it would be critical thinking if the original story was as alarmist as you make it out to be.
But to keep a promise, I will make a post, one post, which will explain why you're wrong. Again.
Create a number of viable separate oil businesses. Issue every adult Iraqi citizen ownership shares in all of these separate operations. Allow these shares to be bought & sold on an Iraqi stock exchange. Those who want to stay in the oil business keep their shares and buy more. Those who prefer cash now sell their shares. Once oil is in the marketplace, the need to fight over control of the government will be reduced.
We make it clear to the Kurds if they torpedo a reasonable oil deal, that we need to end the Sunni insurgency, they will forfeit our protection and we will not defend them against Sunni, Turkish or Iranian incursions.
Afghanistan should have been fragmented along ethnic lines into mutually warring pissant regions, and the same fate should have befallen Iraq.
I guess the globe makers didn't have a lobby to push for this.
To the untrained eye, it may look alarmist -- but it is an alarming development from the perspective of national security and the US economy.
Last week, Vice-President Cheney traveled to Iraq for the SOLE purpose of forcing the Iraqi Patliament to sign the oil revenue sharing bill that the Parliament announced days earlier was drafted.
Trust me when I tell you that Cheney was not there for a photo op or to sabre rattle with Iran. Those of us in the global economy business are balancing on a knife edge waiting for this to come down. The stakes are high.
If the bill doesn't get signed before June -- the Iraqi parliament will probably disintegrate, oil prices could slam America like nothing we've ever seen before, the US might be forced to pull troops out of Iraq, and our national security could be compromised.
Admittedly -- none of this gets into the news (except high-level financial news) -- but a few creative souls around here like to "think" about things rather than "react" to them. It's the classical conservative approach.
It would be nice to have you in the game.
I have been following developments in Iraq like a hawk since day one. I do not share your pessimism. The fact that Kurds today, or Sunni’s yesterday, or Shia last month threaten to leave the gov’t does not concern me. It is how things work in a parliamentary system. It is how they jostle for power.
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