Iraq Oil Report

Iraqi Prime Minister Nouri al-Maliki and Nechirvan Barzani, prime minister of the Iraqi Kurdistan region, are meeting in Baghdad.

The two talked about next year’s budget and oil, the Voice of Iraq news agency reports.

This is a prelude to what is expected to be a rancorous session in Parliament with the new arch rival oil ministers of the national and regional governments, respectively.

Iraqi Oil Minister Hussain al-Shahristani has called the Kurdistan Regional Government’s dozens of oil deals with foreign firms “illegal,” roiling the KRG.

KRG Natural Resources Minister Ashti Hawrami says Shahristani isn’t doing enough in his position and should not criticize him.

Both claim each side has derailed a stalled draft oil law.

Both claim the constitution backs up their positions.

For more details: the first post in Monday’s Iraq Oil Report.

More Iraq Oil News

Russian giant Lukoil expects to get an offer from Iraq’s South Oil Company for a service contract for the W. Qurna oil field, Andrea Mihailescu reports in UPI’s daily Energy Watch.
An intersting note: “If they announce a tender, I’m not so sure we would be interested. If they make us a commercial proposal, then we are ready to look at it,” a top Lukoil official said.

Iraq-Syria pipeline is being studied, but Iraq’s foreign minister wants the work sped up, Khaled Yacoub Oweis reports for Reuters.
The pipeline was built in the 1950s, was used as a major source of Saddam Hussein violations of sanctions restricting oil exports, and was bombed by the United States during the 2003 invasion.

The Fight for Basra

All eyes are on the main rivals fighting for power in the south, and specifically in the oil capital of Basra, the province where most of the oil reserves are in or around, and from where nearly all the exports are sent to market.

The political and militia forces of the Fadhila Party, Sadr Movement and Islamic Supreme Council of Iraq met in a mosque along with others and signed an agreement to lay down arms, respect the rule of law and the state-approved security forces. (This is unlikely, but we’ll get to that soon.)

Reuters has the latest on the meeting of factions in Basra, which United Press International reported last Friday, and was included in Friday’s Iraq Oil Report.

The British have been the coalition force in charge of the area, and are en route to London, slowly, having pulled all 5,000-plus troops back to the airport and readying to leave altogether. Next week is to be an official handover of the security file to Iraqis, and we’ll see to what extent the powers that be either a)uphold and progress the rule of law and the positives it can bring to a population; b)abuse it in the way power can corrupt; or c)get sucked into a power vacuum of religious and factional fighting to rule the area and control the oil sector, from the raw crude from the ground to the oil and fuel being sent to market.

Option C has been the prime modus operandi over the past few years, and a particularly bloody one.

“We didn’t create the mess in Basra,” a senior U.S. official said in Baghdad last week, Reuters reports.

Um, yes you really did, considering that even under Saddam’s wrath Basra had become the cosmopolitan capital of the country, with a vibrant culture. Check out a three-part series by The Christian Science Monitor’s Sam Dagher, which you can find in theIraq Oil Report post of Sept. 18. Dagher explores Basra’s dubbing as the “Venice of the East,” but no more as a Taliban-style, though Shiite, extremism takes hold.

I’ll defer to the experts for more analysis, in this case University of Michigan Middle East expert Juan Cole, from his website, Informed Comment:

Formerly warring Shiite militias in the southern port city of Basra have called a truce. My own guess is that they believe such rhetoric of sweet reasonableness will hasten the departure of the British troops (there are still 5500 out at the airport, scheduled to go down to 2500 by March). It is also possible that, like crime families in New York, each has established a ‘turf’ within which it runs protection rackets and does gasoline and kerosene smuggling, so that the ‘truce’ is just a recognition of current turf boundaries. But obviously if any of them tried to expand into someone else’s territory, it would ignite fighting. I have seen the value of the gasoline smuggling and embezzlement from the state oil company by militias estimated at $2 billion a year. That these activities have suddenly ceased is not plausible.

The allegations by some interviewees that there isn’t much militia violence in Basra does not accord with other reports, of waves of assassinations, killings of unveiled women, and occasional gun battles. (See above). And the idea that the Iraqi 10th Division is likely actually to keep order in the city seems to me overly optimistic based on past behavior.

Be sure to check Juan Cole’s full post for a lot more.

Oil-Rich Kirkuk

Areas to be voted on in the referendum should become part of the Kurdistan Regional Government at the end of the year, if the referendum isn’t held by then, the deputy speaker of the Kurdistan Regional Government’s Parliament Kamal Kirkuki said, Kawa Jam reports for The Kurdish Globe.

“If the committee is not able to carry out the referendum on December 31, 2007, then the disputable areas should be joined to Kurdistan Region according to the demands of people in those areas. After that, we will discuss extending the period of the referendum,” Kirkuki said.

He added: “People in these areas demand that we return them to Kurdistan Region because their situations are worsening day by day.”

Kirkuk is where some of Iraq’s first oil production flowed from, back in the 1930s. The Kirkuk field contains at least 15 billion barrels of Iraq’s 115 billion barrels of proven reserves. Historically very, but not solely, a Kurdish area, Saddam uprooted many of the long time citizens and replaced them with Sunni Arabs, part of his bloody Anfal campaign.

As part of negotiations over the Constitution in 2005, Article 140 says the Saddam displacement should be reversed, a census taken and then the voters of Kirkuk and other disputed territories officially just outside the official KRG area should decide whether to join the KRG jurisdiction.

KRG President Massoud Barzani told reporters the Kirkuk referendum is not a prelude to Kurdish independence — long a fear of countries with sizeable Kurdish populations such as Turkey, Iran and Syria — M. Alİhan Hasanoğlu reports for Today’s Zaman.

This week’s poll on the website of The Kurdish Globe:

Should the Kurdistan government incorporate Kirkuk into Kurdistan Region, if Iraqi government fails to hold the constitutional referendum by the end of this year?

Of the 521 respondents as of this writing, 78 percent said “yes.”

Security, Society and Politics

Three seemingly connected bombings in Amarra, the Shiite capital of Maysan province, have killed at least 26 and injured at least 100, Voice of America reports.

This follows the bombing near the homes of former Iraqi Prime Minister Ayad Allawi, a Shi’ite, and Sunni lawmaker Saleh al-Mutlaq on Tuesday.

Iraq’s deputy prime minister has credited Tehran with helping curb the activities of a radical Shia Muslim militia, Roxana Saberi reports for Inter Press Service.