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."
Oil will not be Federalized in Iraq. Essentially, the Kurds want their own nation.
So, where does that leave us? I see three potential outcomes:
1. We seize Iraq, make it a US territory, and take their oil.
2. We allow it to remain a civil battlefield, hope that it continue to attract Al Qaeda fighters, and we fight with them for as long as they show up.
3. We walk away and allow Iran and Syria to divide it up. Once they get their oil thing together -- we buy the oil.
Okay critical thinkers -- what other outcomes do you see?
Sounds like a problem that needs compromise. The Kurds get some of the wells, and the Iraqi government gets others. Same in the south with the Shias.
At some point, Iraq's government has to make the tough choices or they have to suffer the consequences. That's not "cut-and-run" argument, but instead an argument that you don't keep throwing more American lives away on a nation that won't make the tough choices thmeselves.
Option 4, as we did in the Philippines in the Insurrection, we crush the opposition ultimately, turning it into a relatively peaceful area, and break the back of international jihadism right there in Iraq. We have to fight them somewhere, and someplace will be the battlefield.
It sounds like the Kurds have thrown down the gauntlet that will make them the new country of Kurdistan but the question will be, do we let them be annexed?
A good new option, tobyhill!
We support the new Kurdish nation. We even send our troops to help them get it together. They are sitting on most of the world's oil. We become their favorite customer.
Everyone lives happily ever after. Our children will thank us.
The Kurds are right, for a number of reasons. The first is that there is no reason to entrust the country's oil to a (so far) unstable kleptocracy in the south of Iraq. Let the government exact a modest tax per barrel as international investors make the oil boom begin.
The second reason is that the Kurds not only have a good economy that is just what we're trying to create elsewhere in the country. Allowing a sane form of government to continue there will spread the idea that free markets lead to peace elsewhere in Iraq.
The final, and key reason is that the Kurds could clobber any Shiite army that tried to invade. If they don't want to join Iraq, it's not going to happen. And good for them.
There is an 800 Lb Gorilla in the room regarding “Kurdistan” becoming a seperate nation. That Gorilla’s name is Turkey.
That's why we need to send our troops -- to protect them while they get sovereignty.
That oil does NOT belong to the Turks. Let them join the EU and STFU.
“That’s why we need to send our troops”
What troops? Getting tired of this nation building....
That's not entirely correct. They have the sixth largest oil reserve. Lots of oil anyway.
Some weeks ago there were articles reporting that lots of oil has been discovered in the Sunni Anbar province. If this is true, each faction in Iraq would have their own oil reserves. Iraq could then be largely federalized.
Yes, yes, 100 times yes.
Pi$$ on Bagdad and the rest of Iraq. Let's go with a winner for once.
Okay critical thinkers -- what other outcomes do you see?
Who says that Iran and Syria divide it up peacefully? I see the Saudis and other Sunnis trying to counter the Shia Iranians militarily. Perhaps Iraq will be their final battlefield. In that case, it's a damn good thing to get our people out of the way.
We have well over a billion Islamunists to conquer, the more of them that kill each other, the less mop-up the West has to do.
What troops? Getting tired of this nation building....
Oops, I wasn't clear. Let's move our troops OUT of the rest of Iraq and move them into Kurdishland.
Oh, we can send in the shock and awe guys who want to kill Al Qaeda (if they still bother to show up -- with no infidels there to fight with).
One more combatant in the coming pan-Islamic war.
Because of how much it's affecting you?
The Turks primary concerns are not the oil or even the Iraqi Kurds. What they worry about is that a separate Kurdistan would spark a civil war in the Kurdish portion of Turkey in an effort by Turkish Kurds to partition off the southwest portion of Turkey that has a Kurd majority and join an independent Kurdistan. This is a real flashpoint for Turkey and they would definitely send in their troops to protect their interests. The Iraqi Kurds need to make the oil sharing deal and make it soon. It is the center of any political arrangement to a peaceful Iraq.
Good one, hunter!
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