Iraq Oil Report

The U.S. State Department says an oil law implemented under Saddam Hussein is good enough for Iraq’s national government to sign oil deals, though it would prefer a new national law — mired in controversy and far from approved — to be used instead.

The new position is a shift for the U.S. government, or at least a nuance in its stance, which has pressed hard for a new hydrocarbons legal regime and condemned deals signed between a regional government and private firms — especially when it’s an American company.

“We would prefer these laws to be passed before any deals are signed,” Deputy Assistant Secretary for Near Eastern Affairs Lawrence Butler told United Press International. “However, in the absence of passage of the hydrocarbon law, Iraq as a sovereign state can continue to use the Saddam-era laws to manage the sector in the meantime.”

It’s not clear what effect the U.S. stance will have on the international oil industry, salivating at the prospect of entering the third-largest oil reserves in the world, as Iraq’s Oil Ministry says it will not wait forever for a new law before signing deals.

This raises an interesting quandary for Iraq, the United States and oil companies: What’s more important, adopting a national oil law that sets the oil policy and strategy – be it the long-term one now disputed or a short-term law – or signing oil deals?

Read my entire story for UPI HERE.

Iraq’s Oil

The oil capital of Basra is not ready to take over its own security, the province’s deputy governor said.

Iraq’s Oil, Electricity and Trade Ministers should be fired for not spending enough of their budget, the Parliament’s integrity chief said.

Michael Schwartz, director of Stony Brook University’s College of Global Studies, argues U.S. policy in Iraq, for years, as well as foreign policy in general, largely considers oil.

The Turkish Invasion

More checkpoints along the Iraq-Turkey border are intended to keep supplies from passing to the separatist Kurdistan Workers’ Party, Sinan Salaheddin reports for AP. As Turkey shells PKK guerilla camps on its side, Iraq is trying to deter Turkey from an incursion into the Iraqi Kurdistan region, which could cause an uproar.

Turkey will press Iraq’s Kurdish leadership to act against the PKK — which Turkey alleges Iraqi Kurds harbor and support — with economic sanctions. Gareth Jenkins writes for the Eurasia Daily Monitor sanctions have already begun.

This could have a negative effect on non-PKK business, both Iraqi and Turkish. Truck and taxi drivers say the border closure will put them on the unemployment lines, Deborah Block and Ibrahim Khalil write for Voice of America.

The is the Bush administration’s fault, UPI Editor Martin Sieff argues in the Middle East Times.

US President George W. Bush and his Secretary of State Condoleezza Rice need to realize that when Erdogan flies into Washington for talks next week, it will be their last chance to prevent what could prove to be a very dangerous escalation of the ongoing crisis in Iraq, with consequences they have not foreseen.

So far, the Bush administration has proven to be largely ineffectual - one might even call them naïve liberals - in their refusal to rein in the Kurdish authorities and force them to prevent the Kurdistan Workers’ Party (PKK) from carrying out cross-border operations inside Turkey from their strongholds in the caves of Mount Cudi.

This myopia on the part of Bush and Rice is especially striking when one remembers that, in the eyes of Turkey - America’s oldest and most powerful Middle East ally and a strategically crucial member of the North Atlantic Treaty Organization anchoring the alliance’s vulnerable southeastern flank - the PKK are terrorists who are responsible for attacks and ensuing counterinsurgency operations that have killed 20 times the total number of Americans who died in the 9/11 attacks. (Around 70,000 people are believed to have died in the Turkish-Kurdish conflict over the past decade-and-a-half compared with the 3,000 Americans who were killed on September 11, 2001.)

If there is one thing Bush should understand, it is the determination of a nation that has suffered from rampant terror to root out the groups it holds responsible from the mountain caves in which they are hiding.

Security, Society and Politics

In Kirkuk, Iraq’s second oil capital, the U.S. says it’s hunting al-Qaida as violence increases, the AP reports.

Attacks in Iraq are going down, according to a new Government Accountability Office report, Ann Scott Tyson reports for the Washington Post.

But the number of refugees –- more than 4 million — is increasing, prompting Shirouk Alabayachi of the Iraqi Studies Center and Robert Lowe of Chatham House to ask in the The Japan Times: Is Iraq really safer?

The slight downward trend of violence has been attributed to the surge. Mark Kukis writing for Time asks:
Has the surge reached its limits?

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