News / Middle East

Iraqi Kurdistan Pushes Limits on Oil, Autonomy

KRG president Massud Barzani, right, and Iraqi President Jalal Talabani open a ceremonial valve during an event to celebrate the start of oil exports from the autonomous region of Kurdistan, Irbil, Iraq, June 1, 2009.
KRG president Massud Barzani, right, and Iraqi President Jalal Talabani open a ceremonial valve during an event to celebrate the start of oil exports from the autonomous region of Kurdistan, Irbil, Iraq, June 1, 2009.
With Kurds asserting themselves throughout the Middle East, Iraq’s semi-autonomous Kurdish region has stepped up its profile on the world's oil scene.
 
A series of recent petroleum deals signals a direct challenge to Baghdad's claim of total control over the country's oil exports and a possible step by the Kurds toward their longstanding aspirations for increased autonomy, or outright independence.
Kurdish Areas of Turkey, Iran, Syria and IraqKurdish Areas of Turkey, Iran, Syria and Iraq
x
Kurdish Areas of Turkey, Iran, Syria and Iraq
Kurdish Areas of Turkey, Iran, Syria and Iraq
Within the last few months, Iraq's Kurdistan Regional Government, or KRG, has begun construction on a major international oil and gas pipeline project with neighboring Turkey that would allow the Kurds direct access to world markets via the Mediterranean.
 
The KRG has also expanded exploration deals with foreign oil majors and boosted a growing crude-for-products trade with Turkish companies.
 
The moves reveal that Iraqi Kurds want to make their own economic choices.
 
Deals cause tensions
 
The deals have not only rankled Iraq's central government but also deepened the diplomatic rift between Ankara and Baghdad.
 
And they present internal problems for energy-hungry Turkey, too, which is fighting insurgents among its Kurdish minority who have long pushed for more freedoms.
 
Ankara faces enormous risks were it to throw its economic support solely behind Iraq's Kurds.
 
"Turkey wants to retain Iraq’s territorial integrity and political stability. It doesn’t want to encourage any kind of autonomy in Turkey or with any of the other Kurdish populations nearby," said former U.S. international energy envoy David Goldwyn.
 
"Also, Kurdistan’s economic prosperity keeps Kurds happy there and is a significant commercial opportunity for Turkish companies. So [there are] complicated, mixed interests on both sides," he said.
 
Rich oil reserves
 
The Kurdish-run districts of northern Iraq have significant, nearly untapped reserves.
 
But years of legal disputes between the KRG and federal authorities in Baghdad have kept its oil largely excluded from international markets. Most oil produced in Kurdistan is sold locally for up to $60 a barrel, well below world prices.
 
With its sole grip on federal authority, Baghdad receives all Iraqi oil revenues and distributes a share to the Kurdistan region. Iraq also controls the vast, lucrative oil fields in the south.
 
In April, the KRG temporarily halted exports to protest what it said were overdue payments from the central government. Shipments were restarted in August and increased in September, when Iraq’s federal Cabinet ratified a new agreement with the Kurds.
 
Kurdish Oil Minister Ashti Hawrami told an energy conference in London the deal could lead to exports reaching 250,000 barrels per day by 2013. Kurdish officials project levels of one million barrels a day by 2015.
 
The heady outlook is contingent on the KRG’s recent deal with Ankara, which bypasses the federally-controlled Iraqi pipeline and is due to be operational by early 2014.
 
"If the new pipeline[s] go through," said Middle East expert Gregory Gause, "Baghdad’s leverage over the Kurds would be reduced to zero."
 
Over-stated oil claims
 
But some analysts say Kurdish oil claims are over-inflated.
 
Roughly 75 percent of Iraq’s proven reserves are concentrated in the south. The Kurds control only about six percent of the remaining northern reserves while another 20 percent is in the disputed Kirkuk area, according to the U.S.-based Revenue Watch.
 
"Kurdistan does not have 45 million barrels of oil as it claims. Most of that is in disputed territories that would never be included or accepted by the central government," said Denise Natali, a Kurdish expert at the National Defense University in Washington, D.C.
 
Iraq's southern oil fields are the country's "real jewel," she said.
 
But Iraq remains in political turmoil and the south, in particular, has faced repeated deadly attacks from extremist elements seeking to destabilize the country.
 
For now, the Kurdish regional government provides better financial terms to oil companies. "Its stable political environment is attracting international investment in a way Baghdad has been unable to do," Gause said.
 
Last year, ExxonMobil became the first oil major to sign with the KRG, aggravating relations with Baghdad "by taking exploration blocks located squarely in disputed territories," according to a report by the International Crisis Group.
 
Chevron, France’s Total and Russia’s Gazprom have followed. An estimated 45 smaller petroleum companies also are operating in Kurdistan.
 
Last month, Iraq’s finance ministry belatedly transferred an initial $650 million payment to the Kurdish government to reimburse two of these firms. But Baghdad does not view the compensation as an endorsement of the Kurdish contracts.
 
In a further slap to the Iraqi government, diplomatic sources said last month that Exxon is looking to sell its stake in a flagship project to develop the giant West Qurna-1 oil field in southern Iraq, because profits there are thin.  
 
Exxon has declined to comment.
 
Kurds cautioned
 
Former envoy Goldwyn cautioned Kurdish leaders not to overplay their hand.
 
"The Kurds have some serious cards. But if Baghdad continues to refuse to reimburse costs once those costs become significant — four-five years out — [it] could decidedly hamstring the KRG’s economic development," he said.
 
Iraq's federal government maintains it alone has the right to negotiate contracts and export oil and gas. The Kurdish view is that Iraq’s federal constitution provides delegated authority to the provinces over their own petroleum production.
 
"The constitution gives us the right to develop our oil infrastructure and share it with the rest of the country," said Fuad Hussein, chief of staff for the KRG presidency.
 
"Each community, each citizen, has a share in the wealth, along with the Iraqi government," he said.
 
Ultimately, Goldwyn and others say, the crux of the dispute is about sovereignty, not money. In the near term, the Kurds will remain part of Iraq even as they seek to increase their oil hand.

Mark Snowiss

Mark Snowiss is a Washington D.C.-based multimedia reporter.  He has written and edited for various media outlets including Pacifica and NPR affiliates in Los Angeles. Follow him on Twitter @msnowiss and on Google Plus

You May Like

Republican Majority in Congress Off to Rough Start

Standoff over Homeland Security funding exposes philosophical, tactical problems within party More

Pakistan Blocks Baloch Activist from US Trip

Human Rights Commission of Pakistan slams Islamabad officials for stopping people from leaving country to attend human rights conference More

Video Muslims Long Thrived in North Carolina Before Students Killed

Idyll shattered February 10, when three Muslim university students living in Chapel Hill were gunned down by a neighbor More

This forum has been closed.
Comment Sorting
Comments
     
by: Yere from: Boston
November 13, 2012 12:39 PM
I really dislike the way some so called analysts such as Denise Natalie talk about Kurdistan and its potential oil reserves. Natalie, can you tell us what's the source of your information that Kurdistan has no 40.5 B barrel of oil? Are you a geologist or just an armchair analyst who can estimate oil reserves of Kurdistan from DC?! US Geologica S has said Kurdistan has over 40 B barrel of oil, not the Kurds. To give you some instructions, there is no such thing as central government, its federal government. If one does not understand the Iraqi constitution, how can she estimate Kurdistan oil. Do some more study before making comments.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Muslims Long Thrived in N Carolina Before Slaying of 3 Studentsi
X
Jerome Socolovsky
March 05, 2015 9:04 PM
The killings of three Muslim students in North Carolina early last month came as Muslims across the United States have felt under siege, partly as a result of terrorist attacks being committed internationally in the name of their faith. But Muslims have long thrived in university cities in this part of the American South. VOA's Jerome Socolovsky reports.
Video

Video Muslims Long Thrived in N Carolina Before Slaying of 3 Students

The killings of three Muslim students in North Carolina early last month came as Muslims across the United States have felt under siege, partly as a result of terrorist attacks being committed internationally in the name of their faith. But Muslims have long thrived in university cities in this part of the American South. VOA's Jerome Socolovsky reports.
Video

Video Fuel Shortages in Nigeria Threaten Election Campaigns

Nigeria is suffering a gas shortage as the falling oil price has affected the country’s ability to import and distribute refined fuels. Coming just weeks before scheduled March 28 elections, the shortage could have a big impact on the campaign, as Henry Ridgwell reports for VOA.
Video

Video Report: Human Rights in Annexed Crimea Deteriorating

A new report by Freedom House and the Atlantic Council of the United States says the human rights situation in Crimea has deteriorated since the peninsula was annexed by Russia in March of last year. The report says the new authorities in Crimea are discriminating against minorities, suppressing freedom of expression, and forcing residents to assume Russian citizenship or leave. Zlatica Hoke has more.
Video

Video 50 Years Later African-Americans See New Voting Rights Battles Ahead

Thousands of people will gather to mark the 50th anniversary of a historic civil rights march on March 7th in Selma, Alabama. In 1965, dozens of people were seriously injured during the event known as “Bloody Sunday,” after police attacked African-American demonstrators demanding voting rights. VOA’s Chris Simkins introduces us to some civil rights pioneers who are still fighting for voting rights in Alabama more than 50 years later.
Video

Video Craft Brewers Taking Hold in US Beer Market

Since the 1950’s, the U.S. beer industry has been dominated by a handful of huge breweries. But in recent years, the rapid rise of small craft breweries has changed the American market and, arguably, the way people drink beer. VOA’s Jeff Custer reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.
Video

Video Volunteer Gauge-Watchers Help Fine-Tune Weather Science

An observation system called CoCoRaHS is working to improve weather science, thanks to thousands of volunteers across the country who measure precipitation in their own backyards, then share their data through the Internet. VOA's Shelley Schlender reports.
Video

Video NASA Spacecraft Approaches a Dwarf Planet

NASA’s Dawn spacecraft will make history on Friday, March 6, when it becomes the first man-made object to orbit a dwarf planet named Ceres. It is located in the asteroid belt between Mars and Jupiter, almost 500 million kilometers from Earth. Among other objectives, Dawn will try to examine two mysterious bright white spots detected on the planet’s surface. VOA’s George Putic has more.
Video

Video Young Muslims Radicalized Online

Young Muslims are being radicalized ‘in their bedrooms’ through direct contact with Islamic State or ISIL fighters via the Internet, according to terror experts. There are growing concerns that authorities and Internet providers are not doing enough to counter online extremism - which analysts say is spread by a prolific network of online supporters around the world. Henry Ridgwell reports from London.
Video

Video Positive Messaging Transforms Ethiopia's Image

Ethiopia was once known for famine and droughts. Now, headlines more often point to its fast-growing economy and its emergence as a regional peacemaker. How has Addis Ababa changed the narrative? VOA's Marthe van der Wolf reports.
Video

Video Answers Elude Families of MH370 Passengers

For the families on board Malaysia Airlines flight MH370, an airline official’s statement nearly one year ago that the plane had lost contact with air traffic control at 2:40 AM is the only thing that remains confirmed. William Ide reports.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More