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Kurdistan...the new American focus.

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Kurdistan...the new American focus.
« on: October 22, 2006, 05:04:33 PM »
October 22, 2006



Tussle between Baghdad, Kurds over crude resources



By Syed Rashid Husain

DAWN



RIYADH, Oct 21: Temperatures are soaring. And the apples of discord are the energy riches of northern Iraq -– now firmly under Kurdish control. Stakes are getting higher as the issue enters a new, defining phase in the war-torn Iraq.



Already there are reports of a December deadline to the Iraqi government to finalise the oil law. Analysts are pointing out that the law will offer a much higher rate of return to the oil majors than currently offered by any other regional producer. Many say the new draft would lock the oil majors' control over Iraq’s ‘patrimony’ for decades. Little wonder that the major western oil majors, who have been complaining of little access to the oil riches of the region, are expecting to get the best of the option in Iraq.



And this is happening at a point in time when the Iraqi oil industry is beset with issues of all sorts and the battle to gain control over its energy riches is assuming critical dimensions. Marred by decades of neglect and lack of investments, crippled by years of embargo and non-availability of smart technology, the Iraqi energy infrastructure is currently confronted with major insurgency, targeting its oil and energy infrastructure. And compounding the problem is the ongoing tussle between the central government in Baghdad and the Kurdistan regional government (KRG) on the issue of controlling the crude resources of the energy rich region.There is a considerable infighting going on in the corridors of power in Baghdad and Irbil. The situation is holding the future of the Iraqi oil industry to ransom in many ways. The Kurdistan regional government headed by Masoud Barzani is accusing the central government of sabotaging oil investments in the region. “The people of Kurdistan chose to be in a voluntary union with Iraq on the basis of a constitution. If Baghdad ministers refuse to abide by the constituent the people of Kurdistan reserve the right to reconsider the choice,” he warned.



Earlier the Iraqi oil minister had argued that all the oil deals signed between the KRG and the international companies needed to be ratified by Baghdad. The KRG has signed production sharing agreements with four consortiums for fields in its autonomous areas and more are in offing.



“Since 2003, IOCs have invested more than $100 million in exploration activities in our region and significant discoveries have been made in our region. Baghdad has done nothing to encourage investment is other parts of Iraq,” Barzani argued as the heated debate continues.



Kurdistan is oil rich. With a federal structure, apparently in sight in Iraq, the issue of who controls the oil riches of Iraq is assuming greater importance. The Kurdistan regional government is basing its arguments on the Iraqi constitution, approved in August last year that concedes that Baghdad would not have exclusive control of Iraqi oil and gas reserves.



A new law drafted by the KRG will seal its claim to all oil reserves in the north. KRG has thus proposed to set up five new companies that will operate all the existing fields in the north, explore new ones and market all petroleum produced. The regional government of Kurdistan is also holding direct negotiations for concessions with foreign companies, bypassing the central government in Baghdad.



Iraqi Kurdistan has proven reserves of 25,000 million barrels. Another 20,000 million barrels are in the category of probable reserves. Put statistically, this is about 22.5 per cent of the Iraq’s total reserves. Production which is minimal currently is targeted to reach 200,000 barrels per day over the short term and one million barrels a day thereafter, in the comparative longer run. The region also has substantial gas reserves to boast of.



Add to this Kirkuk, Iraq’s oil rich northern city, which is today probably the most critical and prized area in determining the future of Iraq. The giant Kirkuk oil field is estimated to have 10,000 million barrels and this is believed to be only a fraction of its true potential. In operation since 1927, it currently pumps about one million barrels per day, almost half of Iraq’s total current output.



The ongoing insurgency has also prevented the Iraqi government and international oil companies (IOCs) from undertaking the urgently required development work in many areas. The current Iraqi oil minister earlier in August signalled the race for official deals worth $20 billion would start this autumn. However, in the wake of the prevalent security environment in the country, much exploration activity seems improbable.However, the IOC’s are reportedly working behind the scene to collect data and be ready to undertake assignments as soon as the situation on the ground improves. Oil majors Shell, ExxonMobil, BP, Total and Chevron are among the companies eager to get back into Iraq -– as soon situation permits -– for Iraq’s oil is ‘cheap and easy to produce’.



Over the past three years, scores of international firms have signed up for technical studies and training programmes that granted them regular access to oil ministry officials outside Iraq. Consequently, some of the oil majors have gained and gathered a wealth of information on Iraqi assets. These oil majors have also been reportedly scrutinising data on some of the biggest assets in country, especially in south. Total for instance has been in line for Majnoon and Bin Umar fields, ENI and Repsol have expressed interest in Nassiriyah and Shell was known to be keen on Ratawi.



When fully tapped, these southern fields as well as West Qurna and Halfaya could help boost Iraqi output to three million bpd. Oil majors are also helping to trouble shoot at the North and South Rumaila oilfields, as well as at other problem fields currently ensuring the country’s production and exports capacity. A big if indeed!



And in the meantime, Baghdad and Irbil also need to settle issues between them before any major movement could be made. In order to achieve this, KRG will ultimately need to patch up with Baghdad. This will not be only to the benefit of Baghdad but KRG also has reasons for reaching a compromise with the central government in Baghdad on the issue. For the land locked Kurdistan, finding exports outlet is crucial. The existing Ceyhan pipeline to Turkey, according to experts, was not able to sustain any additional crude exports from north. Hence coordination with Baghdad is an imperative for KRG too.



It’s a two way process and despite political differences, pure economic reason commands a more mature posture. For the sake of the people of the country, the ongoing tussle needs to be resolved -– one way or the other -– before concrete steps could be taken towards exploiting the energy riches of Iraq.


Julie Fern

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Re: Kurdistan...the new American focus.
« Reply #1 on: October 24, 2006, 12:22:22 PM »
we always knew what you were, *&^%-for-brains.

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Re: Kurdistan...the new American focus.
« Reply #2 on: October 26, 2006, 05:37:15 PM »
ah...freeing an oppressed people...it irks ya don't it...

some pathetic liberal you are busterboy...you forget that iraq is their land...let them work it...if they wish to change the name to kurdistan...so be it.

let freedom ring!

Julie Fern

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Re: Kurdistan...the new American focus.
« Reply #3 on: November 01, 2006, 12:52:43 PM »
yes, americans really care about turds.  better find another girlgoat, goatfucker.

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Re: Kurdistan...the new American focus.
« Reply #4 on: November 05, 2006, 01:30:44 PM »
liberals should keep an eye on this issue...aye will maintain the focus for them. :)

Julie Fern

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Re: Kurdistan...the new American focus.
« Reply #5 on: November 06, 2006, 08:44:05 AM »
then we totally screwed, just like your goat-girl.

Julie Fern

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Re: Kurdistan...the new American focus.
« Reply #6 on: December 19, 2006, 08:12:29 AM »
putz.

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Re: Kurdistan...the new American focus.
« Reply #7 on: January 01, 2007, 03:44:12 PM »
kurdish people in charge of northern iraq...

hussein and sons dead...

Bush legacy as liberator carved...