War-torn Iraq, with the fourth-largest proved reserves of oil
in the world, is trying to take bold steps to develop them. But
it's hobbled by dissent and ethnic strife, as well as a loose
constitution that gives rise to conflict between local and
Development, if it comes at all, looks likely to advance at a
very slow pace.
Prominent companies such as Royal Dutch Shell (NYSE: RDS.A)
and the Exxon Mobil Corp. (
), the biggest U.S.-based major integrated oil-and-gas company,
are trying to tap into Iraq's oil, most notably in Kurdistan, the
semiautonomous region in the north.
The problem: they don't know who deal with. Both Kurdish
regional and Iraqi central-government officials claim ownership
of the roughly 20 percent of Iraq's oil reserves near Kirkuk.
Iraq has roughly 115 billion barrels of oil in proved
reserves -- and just recently produced more than 3 million
barrels of oil a day, for the first time in several decades.
The Kurdistan Regional Government, based in Kirkuk, has 2 billion
barrels in such reserves,
according to U.S. Energy Information
Former Iraqi dictator Saddam Hussein oppressed the Kurds, a
non-Arab but Muslim people who also constitute considerable
minorities in Iran, Syria, and Turkey and have long sought an
Iraq, with a land mass slightly more than twice the size of
Idaho, is home to peoples who don't like each other. Between
Kurds and Arabs, tensions run deep. An estimated 4 million Kurds
live in Iraq out of a total population of roughly 32 million.
Relations between Sunni and Shiite groups, both Muslims,
throughout Iraq have deteriorated since the country's prime
minister, Nouri al-Maliki, a Shiite, issued an arrest warrant for
its vice president, Tariq al-Hashemi, a Sunni, on charges of
Kurdish officials granted Hashemi asylum and allowed him to
escape the country via a chartered flight.
Meanwhile, Iraq's president, Jalal Talabani,
is a Kurd.
Power-Sharing Goals Fail
At the heart of the Kurdish-Arab dispute is a constitutional
Kurdistan Regional Government President Massoud Barzani said last
week hasn't been implemented by Baghdad. Speaking in Washington,
he said the provision is designed to set governing and
power-sharing agreements between the two governments. The law
would also repatriate strategic oil-rich parts of Iraq to
The constitution was cobbled out between the administration of
U.S. President George W. Bush, who invaded Iraq in 2003, and
representatives of the interim government. It was finally
ratified in 2005.
Barzani's comments came as tensions between Iraq and Kurdistan
intensified, and followed an announcement that a reconciliatory
meeting between Kurdish, Shiite, and Sunni groups had been
"We cannot anymore wait for unfulfilled promises and
undelivered promises. There has to be a specific and a certain
timeline for this to be delivered," Barzani said. "Therefore,
what we will do is we will work on the preferred option: to
[work] with the other Iraqi groups to find a solution. If not,
then we go back to our people and put all of these realities in
front of the people for the people to be free to make their own
In effect, Barzani, the son of one of Saddam Hussein's most
bitter enemies, the late Mustafa Barzani, issued a general threat
to Iraq's central government. In Iraq, history keeps repeating
'The Big Problem Is Kirkuk'
Now that Kurdistan
is targeting fast exploitation of its oil reserves, Iraq's
northern oil fields could become prime flash points between the
Kurdish Regional Government and Baghdad, warned Najim Abed
Al-Jabouri, a retired major general in the Iraqi army and
international fellow in the Near East South Asia Center for
Strategic Studies at the National Defense University in
"The big problem is Kirkuk and the disputed areas," Al-Jabouri
said. He forecast "big problems" in the future regarding the
ownership of that city and its resources.
Al-Jabouri said Kurdistan claims oil-rich and valuable parts
of northern Iraq, like Kirkuk, as part of its sovereign
Kurdish regional authorities don't have a close relationship
with Iraq's prime minister. Relations are so bad that certain
communities and mayors in the region don't observe the central
government's laws, Al-Jabouri added.
Kurdistan and Iraq are at odds over oil revenue and mineral
rights. Regional ethnic differences have been the source of
violent tensions in the past.
Since 2003 and Saddam Hussein's demise, Kurdistan has become
an active player in the shaping of a new Iraq. Old tensions die
hard, and Iraq's central government doesn't want to lose control
over the country's energy resources.
During the height of Saddam Hussein's rule, he ousted Kurds
from major urban areas like Kirkuk so that Sunni Arabs could move
in, recalled Marvin Zonis, professor emeritus at the Booth School
of Business at the University of Chicago and an expert on Middle
Iraqi History Repeats Itself
Under Saddam Hussein, the intent was to consolidate Arab rule
over the country's resources. Now that his regime is gone,
Kurdish officials worry that Prime Minister al-Maliki may follow
in his predecessor's footsteps.
"Al-Maliki has become as authoritarian without the violence
that is characteristic of Saddam Hussein," Zonis said, who added
the prime minister is "squeezing out Sunnis" from the
Zonis said al-Maliki has won the loyalty of the country's
armed forces, and essentially has his own militia.
Barzani, the Kurdish boss, said al-Maliki is guiding Iraq
toward another dictatorship.
Despite the tensions, Zonis doesn't think they will escalate
to violence. Both sides have shed enough blood, he said, and he
suspects they will be wary of further fighting. They prefer the
profits from oil.
In Washington last week, Barzani said he's still willing to
iron over ongoing differences, and reaffirmed his government's
commitment to upholding the country's current constitution -- but
with a warning.
"This government is one that came into being as a result of
the blood we have shed, and we will not leave it for any other,"
the Kurdish leader said. He added: "If we were able to address
the problems and solve then, that is the most preferred option.
Otherwise, the current status quo in Baghdad is in no way our
option, and we will not accept that as an option."
Last week, the Kurdistan government
halted the import of crude oil, originally developed in
Kurdistan, to Iraq pending Baghdad's payment to oil companies
The halt prompted Iraqi minsters to accuse Kurdistan of
smuggling oil to Iraq's archenemy -- Iran.
Barzani called the rising tensions a "serious crisis."
Iraqi ministers last week championed a minor success over the
Kurdish government by announcing Exxon Mobil had frozen its oil
exploration deal with the Kurds -- a claim disputed by Kurdish
Kurdistan is trying to bring in outside companies to help
boost its oil production, but Iraq doesn't recognize contracts
drafted without the approval of Baghdad.
The Kurds are also considering building an oil pipeline to
Turkey, which, if completed, would be seen as a slight to the
country's sovereignty by Iraqi officials.
"It's really dicey," Zonis said, who added the U S. tried --
and failed -- to create a democratic, peaceful, and unified
country. "This is all testimony that we have lost the war in