Iraqi Oil Territory Dispute Threatens to Spill Over into Fighting

Tuesday, August 4, 2009
 

Iraq’s autonomous Kurdish territories have been playing centre stage amidst rising tensions with the federal Baghdad government over a number of disputes involving power-sharing land, oil contracts and drilling.

The dispute in the war-torn nation is approaching boiling point and fears are growing of an eventual armed clash being triggered between Baghdad and the Kurdish region - which won is autonomy with support from the U.S., after the conclusion of the 1991 Gulf War.

The hostilities between the Kurds and President Nouri al-Maliki’s Shia, Arab-led government centre around the interpretation of a series of Iraqi constitution articles regarding a hydrocarbon law to share oil revenue and manage oil reserves, and also of the status of oil-rich city of Kirkuk – which produces around a fifth of all Iraq’s oil.

Pipelines from Kirkuk flow through Turkey, to Ceyahn and onto the Mediterranean Sea. The fields in the city still produce an estimated 1 million barrels per day (bpd) - almost half of all Iraqi oil exports.

Despite housing a mixture of ethnicities, including Arabs and Turkmen, the city is considered by the Kurds as their ancestral home and unsurprisingly they wish to include it within the borders of their Kurdish region. However, this has left the province’s Arabs and Turkmen in fear of a Kurdish hegemony.

In addition, al-Maliki’s administration has described oil deals that the Kurdistan Regional Government (KRG) has made independently with foreign oil firms as illegal, undermining their capability to sign such agreements.

The signing of the Kurdistan region’s recently established constitution, which claims land outside of its current borders, has further deepened the division between the two sides.

On Sunday, leaders from the two sides met in a resort town outside of Sulaymaniyah – the region’s second most populous city - to discuss proceedings, but could only agree upon the need for further talks.

In the past Kurdish President Massoud Barzani has pledged not to surrender Kirkuk and demanded both a census and a referendum on the city’s fate – as laid out in the Iraqi constitution. Despite the firm-standing position of the opposition leader, Iraqi Deputy Prime Minister, Barha Salih has suggested that the meetings may lessen the tension between the two sides.

There have also been tense standoffs between Kurdish Peshmerga soldiers and Iraqi security forces on the borders of the disputes territories.


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This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More


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