Thread: Archive Latest News - Think Tank - 01/01/08 - 14/04/08

Oil development or Iraq's division?

The objections to the spate of oil contracts signed by the regional Kurdish government in Iraq are now loud and clear.

These contracts are signed without any recourse to the oil ministry in Baghdad and without reference to a general plan to develop the oil industry in the country as a whole in a way to generate the maximum benefit to the Iraqi people and the Iraqi economy at large.

These objections are a bit late especially on the official front where Shahrestani, the minister of oil, alone has voiced them without a word from the government to support him even though he insists that his objections are those of the government and not just his own. The doubt, however, persists as to where the council of ministers and the presidency stand.

In fact action was needed back in 2004 when the Norwegian company DNO signed the first contract with the Kurdish authority to explore for oil close to the Turkish borders. The government should have immediately declared the blacklisting of DNO. If the government had chosen to act then, Iraq would have avoided the deluge of new contracts in which 15 were signed within six weeks and Kurdish minister Hawrami threatened to "sign two contracts every time Shahrestani objects".

In fact, he is a man of his word when he said about the draft oil law that "it will be thrown in the dustbin" and he proved it by quickly enacting the regional oil law, which according to his interpretation of the constitution, takes precedence over any central law.

Objection

The objectors to these contracts including the oil minister have declared them illegal because, if the oil and gas resources belong to all the Iraqi people according to the constitution, then how can a group of people give itself the right to dispense of these resources without the knowledge and approval of other parties? Doesn't the owner of the whole have the right to see how the parts are developed and managed?

The Kurdish law avoids all these by declaring that "the oil and gas in Kurdistan region belongs to the Kurdish people" in a way compatible with the constitution. This duplicity can only lead to an actual division of Iraq if these contracts are allowed to proceed and become the model for other aspiring regions or governorates in Iraq where promoters of federalism are waiting to cash in on oil and other resources in a similar fashion. A feverish race among governorates will create a situation where upward concessions to the oil companies will be tendered in the unhealthy competitive atmosphere that will emerge.

There are no sufficient details published for the Kurdish contracts to be evaluated economically. Minister Hawrami of the north only says that the companies' profit is about 15 per cent but other people have calculated from the DNO contract a level of internal rate of return of between 70 per cent and 115 per cent on the basis of oil prices between $35 and $70 per barrel. In which oil region in the world is there such enormous profits and is this compatible with the constitution that called for maximum benefit to the Iraqis?

DNO claims that it is marketing its oil locally but nobody knows to which refinery and how it is paid for and how the Iraqi government and the Kurdish ministry or DNO are receiving their shares. There are recent rumours, however, that the produced oil is being smuggled to Iran with the help of the Revolutionary Guards.

The Kurdish oil law was enacted and approved so quickly and was immediately followed by the deluge of contracts to create conditions on the ground and force further amendments to the draft of the central oil law to render it meaningless and deprive the central government from any effective role in the future oil industry. But the most dangerous aspect of the Kurdish activity is its encroachment on lands in governorates that are not under its domain, especially in Kirkuk where it is preventing the development of the Khormala oil field. The field is part and parcel of the ministry of oil plan for the Kirkuk oil field and its equipment have arrived in Iraq months ago.

The same goes for the Kormor gas field destined to feed the major gas processing plant in Kirkuk while the Kurds have signed a different deal to develop the field independently.

These moves can only be taken as indicators of a secessionist attitude wherein the Kurds will implement their own schedule, weakening the central government and extracting further humiliating gains from it.

The world that needs the Iraqi oil reserves badly should be aware that it will be impossible to develop these reserves under such conditions and oil prices that are already high are likely to go even higher to the detriment of the whole world economy. The first step to correct this situation is to do away with the occupation and to admit that the whole thing was utterly wrong.

- The writer is former advisor, Ministry of Oil, Iraq.

Gulfnews: Oil development or Iraq's division?

Iraq Punishes Oil Firms With KRG Deals

Iraqi Oil Minister Hussein al-Shahristani has followed up on threats to punish companies that sign deals with the Kurdistan regional government (KRG) by canceling the memoranda of understanding (MOU) some had inked with his ministry, a ministry source told International Oil Daily from Baghdad Tuesday.

Iraq Punishes Oil Firms With KRG Deals

Iraq factions join against Kurd oil deals

A majority of Iraq's parliamentarians have signed an agreement against Iraqi Kurds' moves to unilaterally develop the oil sector and control oil-rich Kirkuk.

The new agreement between a dozen political factions in Iraq also aligns one-time opponents against a dominant Shiite political party that wants to create a large autonomous region in the oil-rich south.

Dar al Hayat reports leaders of political parties representing 150 of Iraq's 275 parliamentarians signed the pact.

"There must be a formula for maintaining the unity of Iraq and the distribution of its wealth," Osama Najafi, of former Prime Minister Ayad Allawi's secular National List party, said at a news conference.

"Oil and gas are a national wealth and we are concerned about those who want to go it alone when it comes to signing deals," he said, Gulf Daily News reports.

The political parties, which have quit Prime Minister Nouri al-Maliki's coalition government, are also uniting against the Kurdistan Regional Government's move to add oil-rich Kirkuk to its territory.

In doing so, the new allies are taking on two of the key supporters of Maliki's government, the Kurdish Coalition and the Islamic Supreme Council of Iraq, in what could be a bid to rejoin with Maliki.

The deal is only tentative, falling short of officially uniting a new block in Parliament, but the parties' members would make up at least 45 percent of the 275-member legislative body.

Signatories to the agreement include Sunni parties National Dialogue Front and Iraqi Accord Front. A faction of the IAF recently signaled support of the Kurds.

A faction of the Dawa Party, which has opposed Maliki's Dawa Party, also signed on, as did the Sadr Movement, led by Moqtada Sadr, a Shiite Cleric with a large militia force that had, under Allawi's rule, been targeted by coalition forces, the Los Angeles Times reports.

The Iraqi Turkmen Front and the Yazidi Block also agreed to the pact, Azzaman reports.

The Kurds have expressed frustration during negotiations with the central government over the country's proposed oil law. The KRG wants a decentralized governance of the sector; Baghdad and others are pushing for central control over the planning and development of oil.

The Kurds passed their own regional law in August and have signed more than 20 deals with Kurdish and international oil firms since.

Baghdad calls the deals illegal.

Sadr's Sheik Walid Kraimawi said Kurds are demanding too much, the Los Angeles Times reports.

It quoted Kurdish Parliamentarian Mahmoud Othman as saying the groups are against Kurds.

The ISCI Party, which aligns with the Kurds, has wanted to create a region of Iraq's southern oil-rich provinces, similar to the semiautonomy afforded to Kurds in the north. The new agreement is designed to challenge that as well.

International Security - Energy - Briefing - UPI.com

Kurds' Kirkuk demands raised after rebuff

A top Iraqi Kurdish leader says oil-rich Kirkuk's fate will be decided in a vote, a day after a coalition of Sunni and Shiite Arabs united against Kurd plans.

"There is no turning back," Massoud Barzani, president of the Kurdistan Regional Government, told the Los Angeles Times. "The referendum must be conducted in the next six months."

The Shiite and Sunni parties -- which include former allies of the current governing coalition and whose members number 150 of Iraq's 275 parliamentarians -- say the KRG's plans for Kirkuk and their controversial oil deals are bad for the country.

The al-Mutamar newspaper reports the statement of the new coalition backs the national government's right to decide how Iraq's oil sector is developed.

The KRG, claiming the national government is too slow on setting oil policy and unconstitutionally keeping central control, has passed a regional oil law and signed dozens of exploration and production deals with international oil firms.

Baghdad has called them illegal, threatened to blacklist the companies and says it's the KRG that is acting unconstitutionally.

The statement says the deals and the Kirkuk desires by the Kurds are dividing the country.

Kirkuk is a northern Iraq city and its adjacent oil fields are some of the oldest and largest in Iraq. Saddam Hussein kicked out Kurds, Turkomen and others who were living there and replaced them with Arabs.

He also redrew the lines of the provinces, taking Kirkuk and other northern areas out of the three heavily Kurdish provinces that make up the KRG now.

Iraqi Kurds ensured the 2005 Constitution reverses Saddam's move, ending with a referendum by Dec. 31, 2007, to allow voters to decide the future. The KRG wants voters to be able to choose to join its area.

But Iraqi Arabs, backed by nationalists in Baghdad and other parts of the country, and Turkomen, who have the backing of Turkey, are virulently opposed to the plan.

A U.N.-brokered deal late last year gave the issue six months of breathing room. Turkey and others want the fate of Kirkuk to be negotiated, not solved in a vote. The KRG says that's out of the question, saying the constitution mandates it.

But opponents, who back a centralized government and don't want Kirkuk and its oil part of the semiautonomous Kurdish region, say that missing the constitution's deadline makes the article null and void.

The Islamic Supreme Council of Iraq, a large Shiite Arab bloc and partner with the Kurds in the governing coalition, favors forming a KRG-style region in the south, where most of Iraq's proven oil reserves are located.

Al Sharqiyah TV in Dubai reports Iraqi President Jalal Talabani, co-leader of Iraq's Kurds with Barzani, is meeting with the Fadhila Party to shore up support for the fledgling governing coalition.

International Security - Energy - Briefing - UPI.com

A call for establishing an Iraqi nuclear program for peaceful purposes

Iraqi Oil Minister, Hussein Shahrastani, stressed the need for Iraq to have a program of advanced nuclear research for peaceful uses of atomic energy in the areas of health, agriculture and industry.

Shahrastani, an atom scientist, said that Iraq has the cheap sources of energy for use in generating electricity and it does not need to build nuclear reactors for this purpose, adding that Iraq possesses large quantities of hydrocarbon riches, particularly natural gas, that can generate electricity cleanly and at a lower cost.

It is noteworthy that Iraq had a nuclear program during the time of the former regime which tried to exploit it in making a nuclear bomb, and was opposed by international community.

A call for establishing an Iraqi nuclear program for peaceful purposes | Iraq Updates

Iraq raises price of crude exports to America in February

An Iraqi oil official said on Monday that Iraq is raising the official price of exports of Basrah light crude for loading next February to consumers in the United States, to be equal to the price of Texas Intermediate crude minus $6.65 of the price of Texas Intermediate crude minus $9.05 in January. As for customers in Europe, the price of Basrah light crude for loading in February settled on the average prices of Brent, Fortes, Osberg and Ekovsk ( B.F.O.E) minus $5.10 unchanged from January, and for Asian customers the loading price in February settled on the average prices of Oman and Dubai crude minus $1.50 unchanged from January.

The official also said that the selling price of Kirkuk crude to be loaded in February will be decided within days.

Iraq raises price of crude exports to America in February | Iraq Updates

Rice praises Iraq, says more progress needed

Secretary of State Condoleezza Rice praised Iraq on Tuesday for passing the first in a series of critical laws meant to reconcile warring Iraqis, saying progress was remarkable even though more was needed.

Rice, who has been traveling with President George W. Bush on his Middle East tour, gave one of the most upbeat assessments yet by a senior American official of political progress in Iraq during a surprise visit to Baghdad to meet Iraqi leaders.

Calling it a time of hope for Iraq, she said there seemed to be a "spirit of cooperation" between the leaders of the country's ethnic and religious groups, who have often frustrated Washington with their failure to agree on anything of substance.

Rice praises Iraq, says more progress needed | Iraq Updates

New Kirkuk Deputy Governor appointed

Today the Kirkuk provincial council appointed Rakan Saed from the Iraqi Gathering Bloc in the council as Kirkuk deputy governor.

Speaking on condition of anonymity, a source told PUKmedia that a poll was made in the council in attendance of commander of multi-national forces in Kirkuk and U.S. Consulate representative along with a number of officials.

26 members from both blocs, Kirkuk Fraternity Bloc and Gathering Republican Bloc, participated in the poll in which 20 of them voted for a nominee, Rakan Saed, while the rest put clear ballot paper into the box. Depending on the result, Rakan is appointed as the deputy governor of Kirkuk province.

PUKmedia :: English - New Kirkuk Deputy Governor appointed

Update........

President Talabani meets with Condoleezza Rice-update

Today the Iraqi President Jalal Talabani met with the U.S. Secretary of State Condoleezza Rice and discussed several issues related to political situation in Iraq and the area.

Kurdistan Region President, Massud Barzani, Iraqi Vice Presidents, Adil Abdul Mahdi and Tariq al-Hashimi and several other Iraqi officials are attending the meeting.

“Passing the Accountability and Justice Law, previously known as de-Baathification law, oil draft law, and provincial powers law were discussed during the meeting.” Nassir al-Ani, head of the Iraqi presidency office told reporters during a press conference following the meeting.

U.S. Secretary of State Condoleezza Rice praised Iraq's leaders on Tuesday for passing the Accountability and Justice Law.

"This law ... is clearly a step forward for national reconciliation, it is clearly a step forward for the process of healing the wounds of the past," Rice told a news conference.

"Yes, there is still a lot of work to be done. I talked with the leaders today about a provincial powers law, about the need for provincial elections, we talked about the need for a hydrocarbons law," she added.

Rice briefed Maliki on U.S. President George W. Bush's Middle East tour and told him that a secure Iraq was vital for the stability of the region.

Iraqi government spokesman Ali al-Dabbagh said Rice had told Maliki that Bush wants to go ahead with a gradual troop withdrawal of 20,000-30,000 soldiers by the middle of this year.

He said Iraqi forces would be ready to take over security responsibility for all 18 provinces by the end of 2008. The U.S. military has so far handed back seven provinces to Iraq control.

"There will not be any imbalance because Iraqi forces are now capable of filling any vacancy made by withdrawals." "Iraqi forces will be responsible for the security file by the end of this year." Dabbagh added.

PUKmedia :: English - President Talabani meets with Condoleezza Rice-update

Joint Statement by Ambassador Crocker and General David Petraeus
Joint Statement by Ambassador Ryan C. Crocker and General David H. Petraeus on the Passage of the Accountability and Justice Legislation.

We offer our sincere congratulations to the members of the Iraqi Council of Representatives who worked extremely hard to reach a series of political compromises that resulted in passage on January 12 of the Accountability and Justice Law.

Passage of this law represents a signal achievement in that Iraqi political leaders have collectively chosen to reform a de-Ba’athification process that many regarded as flawed, unfair, and a roadblock to reconciliation. This is an Iraqi law, formulated by Iraqi leaders, that addresses uniquely Iraqi issues. We look forward to the smooth enactment and implementation of the law in accordance with the principles laid out in the Leaders’ August 26 communiqué.

Ultimately the impact of this important legislative step will depend as much on the spirit of implementation as on the form of the legislation. In that regard, the fact that the law passed with broad political support is encouraging. The law is a product of compromises and tradeoffs as one would expect from a representative government. But it is clear that the law passed on January 12 sends a message to the people of Iraq and throughout the region that Iraqi political leaders are working together to build a state that will be inclusive and tolerant and wants to look to the future rather than dwell on the past.

We welcome this important step forward on the path and pledge to continue to work closely with the Government of Iraq and the elected representatives of the Iraqi people as they forge the way ahead for the young democracy in the Land of the Two Rivers.

PUKmedia :: English - Joint Statement by Ambassador Crocker and General David Petraeus