Monthly Archive for October, 2007

Iraq’s oil law lags but the looming war is less of a threat to the crude

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While the Turkish threat looms in northern Iraq, Simon Webb reports for Reuters oil will not be in harm’s way.

Iraq’s controversial oil law has enough support in Parliament, but won’t be put forward until there is greater backing, Deputy Prime Minister Barham Salih told Reuters.

But the Iraq war as a whole has helped keep prices up, Chip Cummins and Russell Gold report for The Wall Street Journal.

Heritage Oil caught in Turkey-Kurd dispute, Shawn McCarthy reports for the Globe and Mail.

U.S. claims advances in Iraq reconstruction, electricity, medical clinics nationwide, the AP reports.

The Marsh Arabs play an interesting and pivotal role in southern Iraq. They were terrorized by Saddam Hussein, like nearly everyone else. Now they make up a major faction in the ongoing violence in Basra. Will Di Novi of PBS’ NewsHour reports on the Challenging New Chapter for Iraq’s Marsh Arabs.

Matthew Warshaw of D3 Systems talks with World Public Opinioin’s Mary Speck about polling in Iraq and Afghanistan.

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Iraq’s oil in the north could face Turkey’s wrath

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While Turkey’s government decides whether to enter Iraq in response to ongoing attacks blamed on Kurdish separatists hiding in the northern Iraq mountains, Iraq’s oil sector pumps, and waits. Oil skyrocketed to $88 at one point Tuesday, before declining a few dollars, as concerns over global oil supplies and a new Iraq war strike nerves.

The pipeline from Kirkuk, Iraq, to Ceyhan, Turkey, has largely been offline because of Sunni insurgents’ successful sabotage tactics. The country, then, relied on the south to shoulder the 1.6 million barrels per day of exports, which brought in nearly the entire federal budget last year.

That pipeline has been working for the past two months, Simon Webb reports for Reuters. That’s a bright spot for Iraq.

But the Kurdistan Workers’ Party, or the PKK, is drawing a U.S. and Iraqi ally, Turkey, into a possible invasion. Ankara blames the United States and Iraq for not doing enough to stop the attacks from the PKK, a separatist group advocating for an independent country of Kurdistan, including the Kurdish areas of Turkey, Syria and Iran. And Turkey particularly blames the Kurdistan Regional Government, the autonomous and relatively secure area of Iraq in the north, with the same, although less public, aspirations as the PKK.

Turkey’s Parliament is set to give war authority as early as Wednesday, and as Daniel Dombey, Demetri Sevastopulo and Vincent Boland report for the Financial Times, Iraqi Vice President Tariq al-Hashimi has flown to Turkey to try to ease tensions.

Turkey’s prime minister says a war resolution doesn’t mean an invasion will take place, Christopher Torchia reports for the AP.

If Turkey does launch an attack, it could either send in ground troops or make it a more precise incursion from the air, though the bombs and missiles will still result in unknown amounts of civilian deaths.

Al Jazeera has a reporter at the border. Watch the report HERE.

The U.S. badly needs a new game plan in Iraq, writes Leah Bower in Gulf News. (Bower is a former Business Editor at Gulf News, and has covered energy issues in Central and Eastern Europe, the Baltics and the Middle East.)

Sadly, and much like the war against the spread of communism in Vietnam, the US has not only bungled any chance of getting Iraqi oil, it has shot itself in the foot and driven prices up too.

Fouad Ajami is a little more optimistic, writing for U.S. News and World Report there’s A Decent Outcome For Iraq.

But optimism and good news/analysis are a rarity, not regular, for Iraq. Robert Dreyfuss writes about Iraq: The Other Surge for The Nation.

The war in Iraq has multiplied the terrorist threat by seven, write Peter Bergen and Paul Cruickshank in Mother Jones Magazine.

The Senate’s ‘Rebuke’ to Bush’s Iraq Policy Is a Blueprint for Ethnic Cleansing, write Joshua Holland and Raed Jarrar for Alternet.

And back in the states, the war will be felt for generations. It is immortalized in new literature, and the best books are by the grunts, NPR reports.

Troy Turner and his family’s life will be forever marked, however, by an aspect of war the United States is not ready to deal with, Anne Hull writes in an amazing piece for the Washington Post.

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House Oversight Committee Wants Answers from Hunt Oil, State Dept.

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Reps. Henry Waxman, chair of the Committee on Oversight and Government Reform, and Subcommittee on Domestic Policy chair Dennis Kucinich have sent a letter to Ray Hunt, the CEO, and Ambassador Ryan Crocker demanding answers to questions regarding the September deal between Hunt Oil and the Kurdistan Regional Government.

Specifically, the Committee wants to know what, if any, information Ray Hunt received as a sitting member of the President’s Foreign Intelligence Advisory Board and used in deciding the deal.

The letters, which can be viewed here, also call for communications between Hunt, the State Department, and Iraq’s federal or regional governments.

Ray Hunt initially said there were no talks between his company and the government, but I discovered the real deal and reported it Friday.

Read my entire story for UPI here.

Kucinich, a vocal war critic from the start, who typically highlights the oil issue, has called for an investigation already. The Waxman-Kucinich letters give Crocker and Hunt until Nov. 2 to reply. They say they’re deciding whether to launch a formal investigation.

Rep. Edward Markey has sent a second letter to Secretary of State Condoleezza Rice demanding answers to questions he has on the oil deal.

Walid Khadduri writes in Dar Al-Hayat on The Impact of Oil Contracts for the Government of Iraqi Kurdistan.

The New York Times Editorial Board also takes a stab at Iraqi Oil Spoils.

While attention in the states focuses on the U.S. connection, a battle has been brewing between Irbil and Baghdad on this and other oil contracts. KRG Prime Minister Nechirvan Barzani defends the deals.

Iraq’s Oil

An attack on a Basra pipeline marks a potentially huge problem for the oil sector. It already faces critical attacks on a northern pipeline, but violence in the south, where most of the oil is located, processed, transported and exported, has stayed away from oil.

“It’s The Oil,” argues Jim Holt in the London Review of Books.

Society, Security and Politics

It’s Only Bad Luck, McClatchy Newspapers’ Iraqi staff write on their Baghdad bureau’s blog.

The intense amount of bad news leaves Jim Golby wanting something good. The Army captain on his second tour of duty in Iraq writes about Getting Iraq To Work in the Washington Post.

U.S. statements on Iraqi improvements have Claude Salhani of UPI thinking about The Five O’Clock Follies from Vietnam.

“Not So Fast” writes William S. Lind for UPI, arguing the limited decrease in violence in Anbar province does not mean victory.

The Iraq Press Roundup by UPI’s Hiba Dawood.

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Hunt Oil talked to State Dept. prior to signing KRG deal, contrary to prior statements

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A representative from Dallas-based Hunt Oil Corp. did talk with the U.S. State Department prior to signing a controversial oil deal with Iraq’s Kurdistan Regional Government, according to an internal department communication obtained by United Press International.Hunt Oil, whose chief executive officer is connected to the Bush administration by campaign donations and a seat on an intelligence advisory board, had previously denied the meeting. …

On Sept. 5, according to the State Department communication transmitted Sept. 6, the Hunt official in charge of the region met in Irbil, the KRG capital, with officials from the U.S. Agency for International Development.

“Hunt is expecting to sign an exploration contract with the KRG,” the communication stated. …

When asked about the conflicting statements, Jeanne Phillips, Hunt senior vice president for corporate affairs and international relations, confirmed the Sept. 5 meeting and a Hunt delegation led by David McDonald, Hunt general manager for Europe, Africa and the Middle East.

Read the entire story for UPI here.

Iraq Oil Report was passed along this translated copy of a letter sent to Iraq Oil Minister Hussain al-Shahristani by 11 Iraqi technocrats. Most, if not all, have criticized the incarnation of the draft oil law. They take issue, however, now with the KRG’s oil deals. The letter is below in full.

Attention: Dr. Hussain Shahristani
Minister of Oil
We, the undersigned, Iraqi oil professionals who have previously expressed concern and reservation with regard to the proposed draft oil law, would like to express our endorsement for your stance with regard to the contracts signed by the Kurdistan Regional Government and to consider them as illegal and that any foreign company who signs such deal, as well as their sub-contractors, be subject to legal consequences including blacklisting and deprived from further business in Iraq.
We are sure that many other colleges will be willing to support this message but we thought of expediting this message in view of the campaign that is being staged currently by the KRG.

Yours,
Issam al-Chalabi
Tariq Shafiq
Farouk al-Kassim
Fadhil Chalabi
Mohammed al-Jibouri
Karrim al-Shamma
Dhia al-Bakka
Noori Al-Al-Ani
Mohammed-Ali Zainy
Kamel Mhaidi
Falih al-Jiburi

Former Iraq Oil Minister Accuses KRG Of Licensing Oil Operations Outside Its Territory

Former Iraqi Oil Minister Issam Chalabi, in an interview published in the latest edition of Middle East Economic Survey (MEES), says a contract awarded by the Kurdistan Regional Government (KRG) to a US oil company relates to areas of northern Iraq outside KRG control. If confirmed, the development would suggest the KRG may have broader political ambitions for control of oil and gas in the disputed areas adjacent to its territory in northern Iraq.

According to ‘Amman-based former Iraqi oil minister Issam Chalabi, a production-sharing contract (PSC) signed with Hunt Oil of the US in early September will be the source of further friction between the Baghdad government and the Kurdish authorities. The government has already criticized the KRG for signing deals with international oil companies before the federal oil law has been approved.

The Hunt deal covers four structures in Blocks 6, 7 and 8 - Jabal Kand, Fajir, Nerjis and Ain-Sifni - in the Duhok area in the northwest of the KRG region.

According to Mr Chalabi, who held the Iraqi oil portfolio from 1987 to 1990, “the first three structures fall outside the jurisdiction of the KRG, in the Ninewa Governorate.”

He told MEES Hunt’s signing with the KRG for acreage outside the KRG’s three governorates of Dihok, Irbil and Sulaimaniyah would have negative implications from the legal as well as the political perspectives. “This will be considered a very serious matter from a political point of view between the central government and the KRG,” he said, adding that this was especially true since Hunt Oil is a US company.

Mr Chalabi said his suspicions about the Hunt agreement were raised because, in contrast to other awards made by the KRG, no information about the blocks concerned or their location was announced by the Kurdish authorities. Several attempts by MEES to get clarification from the KRG or Hunt Oil on the location of the structures failed to yield a response by press time.

If as is claimed the structures are outside the KRG jurisdiction, the issue is bound to inflame the Baghdad-KRG political relationship. Such a deal would imply the KRG is creating facts on the ground, prejudging any referendum on the status of disputed areas while exceeding its present geographical jurisdiction. Under the federal constitution, the referendum on the disputed areas around Kirkuk and elsewhere is due to take place by the end of 2007 but that deadline is now unlikely to be met.

But Mr Chalabi takes issue with the Kurds’ notion of disputed territory, saying there was “no such thing as ‘disputed areas’ as far as the Iraqis are concerned. They are disputed only from the perspective of the KRG.”
Speaking in general terms about the KRG’s contracts with international oil companies, Mr Chalabi said he supported the Iraqi government’s denouncement of the contracts as illegal.

“I think they are absolutely right, because even if you go to the Constitution it says in Article 111 that oil and gas are the property of all the Iraqi people. This means agreements ought to be signed by the only body that represents those Iraqi people, and in the absence of an oil law that gives particular authorization to anyone else, it must be only the central government that has the right to sign these contracts,” he said.

Instead, the former Iraqi minister said, the KRG went ahead and passed its own oil law without “the approval or consent - or even consultation with - the Ministry of Oil.”
–
Republished with permission from Middle East Economic Survey

Georgia’s Sailors Protect Iraq Oil, writes Margaret Coker of Cox News Service.
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Iraq’s Kurds to international oil firms: ‘now or never’

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The Kurdistan Regional Government, is offering the global oil industry its first and, so far, only chance at entering the Iraqi crude sector. Despite anger in Baghdad, the KRG plans to sign even more controversial oil deals and is waving the “For Sale” sign proudly.

“We have many opportunities to excite you,” KRG Natural Resources Minister Ashti Hawrami told United Press International when asked what the “sales pitch” is to international oil firms. “And if you don’t come forward now, you will lose.”

Read the entire story I wrote for UPI here.

KRG is Pro-Union

The Kurdish government also says it must embrace the oil workers.

“Our key objective is maximize returns for Iraq,” Hawrami said, “so we have no problems with unions and professional organizations, because in a democratic society we must be inclusive of all these requirements.” …

“We must win the unions over and not label them being illegal,” Hawrami said.

Iraq’s Electricity

A new magazine from the U.S. Army Corps of Engineers’ reports on two reconstruction efforts: Overhead transmission line doubles Nasiriyah, Shatra link and Solar street lights in Fallujah.

Society, Security and Politics

Rise in Violence Puts Kirkuk’s Future in Doubt, Ivan Watson reports for National Public Radio.

In the south, where most of Iraq’s oil is located, the situation spirals away.
The director of the Basra airport and Mark Kukis asks in Time.com Has the U.S. Ceded Southern Iraq?

Unable to Defeat Mahdi Army, U.S. Hopes to Divide It, Gareth Porter reports for Inter Press Service.

Anthony Cordesman of the Center for Strategic and International Studies has a new report titled: Pandora’s Box: Iraqi Federalism, Separatism, “Hard” Partitioning, and US Policy

The Iraq Press Roundup by Hiba Dawood for UPI.

The U.S. ‘reputation for accomplishment’ gives added challenge to the Iraq effort, Bernd Debusmann writes for Reuters.

The troubles of the United States in Iraq have been blamed on many causes: too few troops, wrong strategies, flawed intelligence, a very stubborn commander-in-chief.

The Man on the Moon rarely rates a public mention.

But the Man on the Moon looms so large in relations between the U.S. and 28 million Iraqis that every U.S. field commander knows his job would be easier if no American had ever set foot on the moon.

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Politics on the mind as Turkey threatens invasion, while Big Oil decides on waiting for Baghdad

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Turkey is being pressed to respond to an increase in Kurdish rebel attacks by invading Iraq, where the rebels are allegedly holing up. More after the energy-related news.

Meanwhile, Lionel Laurent writes for Forbes.com that the small oil firms are making their mark in Iraq and Big Oil is betting on Baghdad. He asks, Is Big Oil Losing The Race For Iraq?

The Kurdistan Regional Government’s Minister of Foreign Affairs Falah Mustafa Bakir speaks Thursday, Oct. 11, in New York City at Columbia University (of recent Ahmadinejad fame) on “Federalism, the Oil Law and Regional Issues.”

The event is sponsored by Columbia University’s Middle East Institute.

Child: “Mother, mother! Daddy was electrocuted!”

Mother: “We have power?”

This is a popular Iraqi joke, according to McClatchy Newspapers, which uses it to start their story on the status of electricity in Iraq.

Jay Price, Jenan Hussein and Sahar Issa write In Baghdad, elusive electricity is rare delight.

It was the second of two hours of electricity they get each day from the state-run power grid. Four and a half years after the U.S.-led invasion of Iraq, it’s never certain when the power will arrive, just that one electrified hour will come in the morning, another at night. U.S. reconstruction officials say that on average, electricity is available 10 hours a day, but Akhbal, a small woman whose face is worn beyond her 48 years, doesn’t know anyone who gets close to that much.

Aside from ongoing warfare, a large part of the reason Iraqis are left wanting for electricity (as well as fuels, health care and more) is because of the inability of the federal ministries to deliver.

The U.S. Government Accountability Office explains why in their updated report, Stabilizing and Rebuilding Iraq: U.S. Ministry Capacity Development Efforts Need an Overall Integrated Strategy to Guide Efforts and Manage Risk.

The Turkish Invasion

Upsurge in Kurdish attacks raises pressure on Turkish prime minister to order Iraq invasion, reports Ian Traynor for The Guardian.

Selcan Hacaoglu reports for the AP Turkish troops are targeting the Kurdish rebels.

Meanwhile, Turkey says it can send troops into northern Iraq, Hidir Goktas and Gareth Jones report for Reuters.

But the United States, torn between allies in Ankara and Irbil, as well as a nearly 55-month long war in Iraq that might not handle another front for fighting, warned Turkey not to enter Iraq.

Society, Security and Politics

An article in Iraq’s constitution, aimed at keeping the government from mucking with marriage, is being used to impose sexist restrictions on the rights of women, Los Angeles Times’ Tina Susman reports.

Article 41 is just one line in the 16-page document, but to critics, it is the worst.

Opponents, including women’s rights activists and legal scholars, say the one poorly worded sentence opens the door to rule by draconian interpretations of Islamic law that could sanction the stoning of adulterous women, allow underage girls to be forced into marriage and permit men to abandon their wives by declaring, “I divorce you,” three times.

In the southern city of Basra, there are already signs of religious extremism being used to rein in women. Police say gangs enforcing their idea of Islamic law have killed 15 women in the last month.

Kareem Zair writes in Azzaman on the conditions in a women’s prison in Baghdad, where all lack medical care and many detained because their sons or husbands were accused of crimes.

Which country has the third largest contingent of coalition troops in Iraq behind the United States and Britain? Andrew E. Kramer reports the answer for The New York Times: Georgia.

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An Iraqi Kurdish leader explains their oil prerogative, plus sales of Kirkuk oil and electricity developments

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The Kurdistan frame of mind in the Iraq oil debate is laid out by Nechirvan Barzani, prime minister of the Kurdistan Regional Government, in a Wall Street Journal op-ed over the weekend.

This August, the Kurdistan Regional Government (KRG) of Iraq passed an oil and gas law to regulate the oil sector in our region. So far, we have signed eight production-sharing contracts with international oil and gas companies. We expect to sign another two in the near future. …
We hope our friends and supporters in the U.S. will understand that this is not an attempt to usurp the nation’s oil resources, but rather our best effort to move the process forward, leading by example to make these valuable resources work for the people of Iraq.

The referendum to decide who controls the territory of oil-rich Kirkuk and other disputed areas depends on voting procedures, which must be outlined in legislation from Parliament, Reuters reports.

Shell, BP, Cepsa, Tupras, Erg, and Exxon Mobil will take home a combined 5 million barrels of Kirkuk oil from Ceyhan, Reuters reports.

Basra

Reidar Visser of the Norwegian Institute of International Affairs and the Iraq website historiae.org tells the British Now is the Worst Possible Time to Leave Basra

Even if the idea of a gradual withdrawal of British forces from Iraq is a sound one, the specific timing that is now being considered seems unwise and strikingly detached from the local political process. The immense size of the energy resources involved makes Basra an extraordinary case, in which the prospect of internal violence between competing Shiite factions is unparalleled.

Basra’s police chief says he’s ready and willing to take on the growing presence of armed militias in his area. The numbers are growing in the power vacuum, and all want a piece of the lucrative oil and fuels smuggling trade, Basil Adas reports for Gulf News.

The oil-rich city consists of 40 to 55 private militia who specialise in oil smuggling to Iran and stealing copper wires from electric grids.

Iraq’s Electricity

Nearly $80 million is being used for renovating electrical substations aimed at helping boost North Rumaila’s oil production, NewsBlaze reports.

Another $8.8 million U.S. Army Corps of Engineers project brought online a substation in Basra, which feeds residential needs and an oil/gas separation facility, Black Anthem Military News reports.

Maysan province has approved a new 400 megawatt power station, to be online by the end of next year.

Society, Security and Politics

The Sadr Movement-Supreme Iraqi Islamic Council pact announced over the weekend was not signed in Iraq, but in Iran, Iraq Slogger reports.

Tamara Walid in ArabianBusiness.com asks: Iraq: where has the money gone?

Basic services are key to winning the Iraq war, said the top operational U.S. commander in Iraq, Army Lt. Gen. Ray Odierno, Andrew Gray reports for Reuters.

“We now need to start to improve the basic services. If we can do that, I think we will see a tipping point.” Odierno told a news conference in Washington.

“We must bring the economic and political processes in now or we could squander this opportunity that we’ve developed,” he said.

“Ultimately the government of Iraq must overcome the Sunni-Shia divide. Only the government of Iraq can truly reconcile.”

Actually, “improving the basic services,” as Odierno puts it – “quality of life,” it could also be termed – is the ONLY thing that will halt the trend of violence in Iraq and, possibly, reverse it.

The often touted dual agenda, used by Democratic and Republican Party politicos alike, that there needs to be success on the military and political fronts in order to achieve reconciliation, is false.

Every day, most Iraqis fear being kidnapped, raped, tortured and killed.

Every day there is 60 percent poverty and unemployment.

Every day Iraqis lack adequate amounts of food, fuels, clean and running water, and electricity.

Every day there is no longer a high-quality education and health care system.

Every day religious ideology decides more of their human liberties.

Every day there is less and less faith in their political leaders (which are largely considered illegitimate anyway).

Every day all of this is the reality of living in Iraq, it’s a day with less hope than the yesterday.

And every day there is no hope, it’s a day joining the insurgency or being caught up in violence is more likely.

Change this, and then you’ll see success militarily and politically. Not a day before.
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Iraq’s National Security Chief says an oil law compromise where everyone is “unhappy” is drawing near

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Mowaffak al-Rubaie was largely optimistic Friday in a speech during a Washington visit, including on plans to protect and bolster the crucial energy sector.

“That’s the best compromise I think, whereby everybody goes home partly unhappy. And that compromise, I think we are very close to that. We need some tweaking on that.”

Click HERE for the story.

Rubaie also said the security situation is improving and will allow them to focus on oil economics.

C-SPAN has the video of the speech and QandA.

Iraq’s Oil

Iraq’s Kurdistan region is moving forward on its own to develop the expected oil reserves found beneath its three Iraqi provinces, as I explained Tuesday.

They’re moving this way because Baghdad has been unable to reach a deal with the Kurdistan Regional Government on some key issues like federalism and the extent of privatizing the sector.

Tariq Shafiq helped write the oil law. An Iraqi who now is a petroleum consultant in London, he now opposes it because it has weakened the central government’s role.

Iraqis should no longer keep quite about the attitude of KRG. With this KRG attitude, a confrontation is inevitable. If you may observe, more and more anti-statements are coming out of Iraqi politicians from the rest of the country.

A vivid example of Kurds behaving as if from a separate independent state is (Kurdish leader and Iraqi President Jalal) Talabani’s statement vis-a-vis Biden’s declaration and its Senate approval. His pro-Biden sectarian divided Iraq came to contradict all Iraqi politicians’ declarations including the official Iraqi Parliament and the PM’s stands; when all condemned it. He certainly behaved as a head of KRG and not Head of Iraq State.

Such KRG attitude can only bring about a confrontation sooner than later, which in my opinion is best for both. KRG should not behave as a con-federal if not an independent state while it meddles in the affairs of Iraq, the State, from within and without.

More on the Biden-Talabani meeting in Thursday’s Iraq Oil Report.

Translation of the Kurdish daily Rozhnama: Census to be held in Iraqi oil-rich Kirkuk in mid Nov 07

The process of conducting a full census in the Kirkuk Governorate will begin in mid November 2007, the deputy head of the commission on implementing Article 140, Narmin Uthamn, told the Rozhnama daily.

She said: “Some points relating to the census were thought to be the parliament’s responsibility, but it has been concluded after detailed research that all of these issues come under the responsibility of the executive authorities. Hence, a committee has been set up to look into the mechanisms for carrying out a census and problems that might face the process.”

It is noteworthy that, in accordance with Article 140 of the Iraqi constitution designed to resolve the status of Kirkuk and other disputed areas the census will be followed by a referendum to decide on the city’s fate: whether to be incorporated into the Kurdistan Region or remain as part of the rest of Iraq. The deadline for the referendum is the end of 2007.

Western Zagros, the Iraqi Kurdistan subsidiary of Canada’s Western Oil Sands, announced on its website its board of directors and officers as well as an update on Kurdistan operations.

Zagros is being spun off of WOS as part of Marathon’s purchase requirements. As a major with an eye on the rest of Iraq, owning a company operating in the KRG is a no-no.

Zuhair al-Laithi reports for Azzaman Minister hails 2008 budget, boosted by higher oil prices.

Security, Society and Politics

Iraq Slogger reports 22 Armed Groups Announce Common Front

Ali Al-Mawsawi reports in Azzaman in English Kurds losing $1 million a day on Iran’s closing of border

McClatchy Baghdad bureau’s blog post: Happy Birthday to You My Son

Greg Bruno of the Council on Foreign Relations: Going Long in Iraq

Hiba Dawood writes for UPI: the Iraq Press Roundup
———

Iraqi Kurd oil deals continue to make headlines while the export of the oil may be tricky

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The rest of the U.S. and global media have now picked up on my story for UPI from Tuesday on the four new approved and two already signed production sharing contracts with foreign firms.

Iraq’s Kurdistan Regional Government made a sudden but not unexpected announcement Tuesday it had signed four more controversial oil deals. While the move highlights success in the region, it comes as the central government in Baghdad struggles to meet long-term agenda items like a national oil law.

Iraq’s government reacted to the news in the same vein it has to similar deals in the past: criticizing the KRG for a perceived unilateral move in an oil sector lacking needed identity and saying it is fueling the fire separating KRG-Baghdad compromise.

There are few new updates, but each outlet has its own take. Here are the best:

Ilnur Cevik in The New Anatolian: The Oil War of Iraq, with a unique lede:

Iraqi Kurds: We will run our oil industry

Defiant Iraqi Kurds say they are fed up with the delays in the legislation of the oil law in Baghdad and have passed their own hydrocarbons bill and signed agreements with Hunt Oil and Dana Gas

Baghdad : But will I allow you to sell it?

Iraqi government says the deal with Hunt and Dana are null and void and see the Kurdish moves as secessionist. They say KRG has to get Baghdad’s approval to sell the oil in world markets.

Ankara: How will you export it abroad?

Turkey says the Iraqi Kurds can extract the oil, develop the fields and may even get permission from Baghdad to sell it but it has to pass through Turkish territory and Ankara’s approval is needed.

AlsumariaTV: Kurdistan working aside from Iraq government

The Canadian Press: New Kurdish oil deals strain ties with Baghdad; Canada’s Heritage Oil involved

Richard A. Oppel Jr. in The New York Times: Kurds Reach New Oil Deals, Straining Ties With Baghdad

Mark Gregory in the BBC: Iraqi Kurds sign four oil deals

Iraq’s Oil

Simon Webb of Reuters reports more on the difficulty Iraqi Kurdistan may face in sending oil to the international market.

Two weeks following a bomb blast on the habitually attacked and nonfunctioning Kirkuk(Iraq)-Ceyhan(Turkey) pipeline, both Marketwatch and Reuters report oil is flowing north again.

Gerry J. Gilmore writes in the American Forces Press Service Iraq Reconstruction Efforts Make Meaningful Progress, General Says

Oil and electricity production and availability constitute the bedrock of Iraq’s economic recovery, (Brig. Gen. Michael J. Walsh, commanding general of the U.S. Army Corps of Engineers’ Gulf Region Division, told reporters at a Baghdad news conference). Refineries need dependable electrical power to process fuel, he noted, and electrical generation requires high-quality petroleum-derived fuel to run plants.

More than 95 percent of Iraq’s economy is dependent on petroleum exports, he added. The country’s inefficient 1960s- to 1970s-era infrastructure was poorly maintained and requires intensive rehabilitation, he added.

“And, you can imagine if you were to drive a sports car for 30 years without changing its oil, its belts and its filters, how well it would run,” Walsh said.

However, many petroleum-production goals in post-Saddam Iraq have now been met, Walsh said, noting that about $1.7 billion worth of oil-sector projects were completed in June. Iraqi industry also has reached its daily goals of producing 3,000 tons of liquefied petroleum gas, 3 million barrels of crude oil, and 800 million cubic feet of natural gas.

While nearly all of U.S. reconstruction funds have been spent, Iraq is NOWHERE near producing 3 million barrels per day, more like 2 million at best. The Corps of Engineers officially pegs capacity at 3 million bpd, but that is too optimistic.

Iraq’s Fuels

Iraq Slogger reports on Household Fuel Speaks of Iraq’s Restive Summer: Data Reveals a Story of Propane and Politics

What story hides in the price of propane? IraqSlogger’s exclusive data documents major fluctuations in the price of cooking gas, a widespread household fuel, in August and September, in Baghdad and in the Iraqi provinces. In a striking way, the data capture the history of the last two months in Iraq.

Cooking gas (ghaz al-tabkh) is a staple purchase for Iraqi households. The fuel, usually a mix containing butane or propane, is used for food preparation in the home. Cooking fuel is sold in reusable standard-sized cylinders which are exchanged at fuel stations when emptied.

Iraq’s Electricity

Iran Daily writes a very strange article that Iran soon will be able to supply all Iraq’s electricity needs.

Ken Dey of the Idaho Statesman on Idahoan workers working for Boise-based firm Washington Group International’s work on Iraq reconstruction, including the electricity sector.

Society, Security and Politics

University of Michigan Middle East expert Juan Cole writes about the state of new foreign fighters coming to Iraq to fight.

A Saudi cleric has given a fatwa forbidding Saudi youth from going abroad (i.e. Iraq) to fight jihad. Al-Hayat reports in Arabic Al-Maliki Arab nationalists such as Abdel Bari Atwan at al-Quds al-Arabi are incensed by it. Atwan can’t see much difference between the US occupation of Iraq and the Soviet occupation of Afghanistan, which lots of Saudis went to fight.

The US military captured a cache of information on foreign jihadis fighting in Iraq, with 500 names. Gen. Petraeus has made a special effort to track down and capture the foreign jihadis, who have been behind some massive and destabilizing bombings (though I think the US press over-emphasizes the foreigners and underestimates the indigenous Iraqi guerrilla groups).

Iraqi society is mixed on Sen. Joseph Biden’s legislation calling for a decentralized federalism in Iraq, which was approved by three-quarters of the Senate.

Nearly all but the Kurds are against it, but the Shiite-dominated Parliament has been unable to approve a resolution rebuking the Biden amendment to the 2008 defense funding bill.

This week the Iraq Federation of Oil Unions and General Union of Oil Employees in Basra issued a brief statement:

The General Union of Oil and Gas denounces the statement from the U.S. Congress that suggest the partitioning of Iraq into different parts. At the same time that we are denouncing such statements, we also reject this cowardly act that is aimed at the security and stability of our country, Iraq. Such a statement on the part of the U.S. Congress demonstrates clearly that U.S. occupation forces have failed to control Iraq.

Iraq will be united in spite of what the U.S. says. We are calling on the Iraqi government and Iraqi Parliament to reject such statements that signify the U.S. government’s hatred and meanness toward the people of Iraq – the people who managed to confront all sorts of conspiracies and il-fatd schenes during the past period.

- Hassan Juma’a Awad, IFOU and GUOE president

Biden insists the resolution, which is non-binding, is being misinterpreted. He and co-strategist Leslie Gelb of the Council on Foreign Relations explain in a Washington Post op-ed.

He also met with visiting Iraq President Jalal Talabani, a Kurd, Wednesday and issued this release:

At the meeting, President Talabani welcomed the Senate’s approval of the Biden-Brownback amendment last week supporting federalism in Iraq, on a bipartisan vote of 75-23. He expressed his strong belief that the amendment promotes the unity and territorial integrity of Iraq and is not, as some have mischaracterized it, a call for partition. He also emphasized that the amendment is completely consistent with the decision Iraqis have made to adopt a federal form of government in their Constitution.
In addition, Prime Minister Nouri al-Maliki, speaking in Arabic on Tuesday to al-Iraqiyah Television, made the following remarks regarding the Biden-Brownback Federalism Amendment: “They said they welcomed federalism. If federalism is what they really meant, why not? Federalism, after all, is stipulated in the Constitution. We, too, talked about federalism as this is a constitutional issue.”
Senator Biden said, “I welcome President Talabani’s support for the Biden-Brownback amendment, and also Prime Minster Maliki’s comments. Some – both in the United States and Iraq – have tried to mischaracterize our amendment as calling for the partition of Iraq. It is nothing of the sort. It calls for keeping Iraq together by bringing to life the federal system enshrined in its constitution. A federal Iraq is a united Iraq and the best path to a political settlement that virtually everyone agrees is necessary if we are to leave Iraq without leaving chaos behind.”

Trudy Rubin of the Philadelphia Inquirer writes a scathing review of the plan: Why a plan for Iraq’s soft partition would backfire

The Government Accountability Office has issued a new report: Stabilizing and Rebuilding Iraq: Serious Challenges Confront U.S. Efforts to Build the Capacity of Iraqi Ministries.

Hiba Dawood writes for UPI: the Iraq Press Roundup

Congress wants answers on Hunt deal while its CEO denies any State Dept. conversation

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Rep. Edward Markey has demanded answers to 12 questions from Secretary of State Condoleezza Rice. In a letter Tuesday, he said the Hunt Oil-Kurdistan Regional Government deal is sketchy and hurts the U.S. agenda in Iraq.

Bob Davis, Chip Cummins and Neil King Jr. report for the Wall Street Journal that Hunt CEO Ray Hunt denies any discussions on the deal with the U.S. government, despite claims by State it advised Hunt not to sign a deal with the KRG.

Meanwhile both the State Department and White House maintain U.S. efforts are at pressing Baghdad to pass national legislation.

Bob Fryklund of the global consulting firm IHS – owner of CERA – says the earlier firms sign with the KRG, the better the fields they’ll get. He says the independent firms are the ones mostly courting the KRG, while the bigger firms – national and international oil companies – are waiting for Baghdad.

Iraq’s Economy

John Dizard reports for the Financial Times that Iraq’s bonds market may be a bright light for a struggling economy.

Society, Security and Politics

In Iraq’s south, where intra-Shiite violence has so far taken a back seat to Sunni-Shiite fighting in the rest of the country (minus the KRG), the oil-rich area could be the next big problem for U.S. forces there. Ken Fireman reports for Bloomberg military and private analysts differ on the extent of the problem. But it is real, and will be a further drain both on coalition troops and on Baghdad’s ability to govern.

The U.S. military tactic of bringing Sunnis tribesman into the security forces fold is putting them at odds with the Shiite majority. Joshua Partlow reports for the Washington Post they are accused of allegiances to al-Qaida in Iraq.