Place Your Bets: Erbil or Baghdad

The dispute between Iraq’s central government and the Kurdistan Regional Government over oil contracts in northern Iraq has been dragging on for years, but it recent times we’ve seen developments that push the sides further apart rather than bringing them together.

While the short-term issue of payments for shipments from Iraqi Kurdistan appears to have been resolved, the old problem of recognition of oil-related contracts is causing increasing tensions; the absence of an oil law doesn’t help.

If ExxonMobil really hands back the keys to West Qurna I and sets up shop openly in Kurdistan, it would send shock-waves through the industry. Essentially it would be a gamble that a more risky and speculative prospect in Kurdistan will be worth more in the long run than a relatively secure but low-margin business in the south.

Ladies and gentlemen, place your bets.

17 Responses to Place Your Bets: Erbil or Baghdad

  1. Re da Caste October 25, 2012 at 8:52 am #

    It´s easy to see what’s going on: Kurdistan aligning with Turkey, NATO, and EXXON/USA, while Baghdad and Maliki is aligning with shia Iran, Syria and with Russia (China is still a question mark). Military Kurdistan is stronger than Baghdad today. Saudi and Israel will also support Kurdistan if necessary. The bet is not difficult to choose: go for ERBIL !!

  2. Mohammad October 25, 2012 at 5:09 pm #

    Companies like Exxon does not need to run iraqi politics, seems like their main intrest is to divide Iraq for sole purpose of their oil intrest and with USA behind their back. In my opinoin Baghdad will envetually win if it stay firm on their stance.

  3. Re da Caste October 25, 2012 at 5:51 pm #

    The one trying to divide Iraq is Mr. Shahristani. His (and Maliki’s) policy of no acceptance of the oil agreements signed i Kurdistan as well as their unprofitable service agreements in the south will lead to an economic disaster for the country. Exxon and BP are leaving the south and others will follow. Baghdad looks upon Kurdistan the very same way as Saddam did and upon the country’s economy the same way as the old Soviet leaders did. I hope not, but I’m afraid Iraq will split apart soon. Besides, Maliki is being too soft against Iran – not good.

  4. Mesopotamian Soul October 25, 2012 at 8:34 pm #

    “Military Kurdistan is stronger than Baghdad today” ? Is this a joke? The amount that Iraq spends on its military and counter terrorism equipment is more then the amount that the KRG gets from the central government + all the oil exports that KRG do. Gets your facts right before blabbing false claims.

  5. Re da Caste October 25, 2012 at 9:51 pm #

    The KRG peshmerga barred the national Iraqi army from accessing the border area July 27, starting a tense stand-off between the two forces. KRG’s eighth Brigade of the peshmerga had blocked soldiers from the Iraqi army’s 10th division near the Rabia border crossing town between Iraq and Syria after the Iraqi central government attempted to wrestle control of the post away from the Kurds. Maliki got really mad, but what could he do? He knows very well the odds. You don’t, lost soul!

  6. Uruki-the-Iraqi October 26, 2012 at 1:08 am #

    Re da Caste said “Kurdistan aligning with Turkey, NATO, and EXXON/USA” do you call what Turkey is doing to Iraqi-Kurdistan (all these years) from air raids, daily bombings, constant incursions, border crossings and the sending of 10,000+ Turkish troops into Northern Iraq an alignment of some sort between Turkey and Kurdistan?? What kind of a fool are you? NATO is not involved in Northern Iraq (as of now) and as far as Exxon-Mobil and others are concerned, these international oil companies are the same people who invaded Iraq for the IRAQI OIL and now they want to DIVIDE the Iraqi people, so stop thinking they brought you democracy or what have you!!
    Re da Caste also said “Saudi and Israel will also support Kurdistan if necessary” Keep dreaming because all what the Saudis want to do in Iraq is to support and strengthen their Sunni brothers (the same ARAB people) who supported Saddam Hussein financially when he killed 180,000+ Kurds and caused the genocide against the Kurdish and Iraqi people of Iraq (are you ready for their support and their more genocides by these so called friends?) and as far as Israel (you give Israel too much military credit they do not deserve) because if you think about it they cannot even battle their own internal problems (Gaza strip and South Lebanon) and you expect them to come to the aid of your self-proclaimed rulers of Kurdistan?? Israel perceived power is to dived and conquer the Arab world and without that, Israel will be just another tourist attraction consisting of mainly coastal roads by the sea!!
    We (the free minded and socialist Iraqis) just have one question to the dictator rulers of Kurdistan “Why are you so eager of selling the IRAQI oil to these GREEDY IOCs and signing PSCs with them instead of service contracts like the rest of OPEC countries??” and “How much lucrative kickbacks and secret commissions are these Kurdish clans getting from these IOCs while the rest of the Kurdish people and the Iraqis are kept below the poverty level”???

  7. Daddy WarBux October 26, 2012 at 3:19 am #

    We wait and watch as usual. What else is there to do?

  8. Re da Caste October 26, 2012 at 1:08 pm #

    Well, as far as I know the people in the south are living in poverty and without electricity power, while the kurds are doing much much better. In spite of the PSCs and kickbacks and secrets. To not talk about the security in Erbil and in Baghdad. You, Uruki, are also wrong about the contracts. In most of the world PSCs are the main stream. What makes you believe the services contract give more to the Iraqi people? Besides, if you had the strength you could have removed Saddam yourselves. But you didn’t “free minded and socialist” as you are. I suppose you are socialist as Saddam was, but now you are also “free minded”, due to the invasion that allows you to be. Now that the Americans did your work, you still unhappy?

  9. Uruki-the-Iraqi October 27, 2012 at 10:34 pm #

    Mr. “Re da Caste”, the prosperity enjoyed today in Iraqi-Kurdistan (population 5+ million) is paid by 17% from Iraq’s total GDP (income generated mostly — 80% from the south of Iraq) and the electricity generated in the KRG today (about 3+ GW) is enough and more than sufficient for KRG, while the rest of Iraq (population 28+ million) requires (or demands 15+ GW) but Iraq is currently generating (about 9+ GW) not to mention how the two regions are different in size (3 provinces for KRG) compared to (15 provinces for the rest of Iraq)… I agree with you regarding the impasse of many issues from Iraq’s current MPs due to political quarrels between the three main groups in Iraq, and we all hope they ALL come to their senses SOON… Saddam was not a socialist leader, he was a brutal dictator and a psychopath (just count the number and size of his palaces) manipulated and used by the illuminati to gain foothold on the largest underground lake containing OIL in the world by initiating three senseless wars (against Iran, Kuwait and against the Iraqi people)… Tell me about any PSCs signed by any OPEC member (which Iraq is also a founding member) and do not fool me by the main stream propaganda of the IOCs signed with small and 2-bit landlords… The Americans did not liberate the Iraqis (they only fractured Iraq for their own geo-political and financial reasons) and they ALSO did not bring the Iraqis ANY happiness!! If you think a socialist system is a bad thing then I guess the countries of Sweden, Finland and now France are ALL bad examples … All humans are born free with a free mind to think… I am not like Saddam the dictator but I support Dr. Shahristani who is working on what is GOOD for Iraq and improving the standard of livings for ALL the Iraqis (from the north to the south, from the west to the east of Iraq)

  10. Re da Caste October 28, 2012 at 4:20 pm #

    OK, let’s calm down this dispute. I believe one needs to understand the differencies what comes to oil explotation between the south (old) and the north (recent). The needs and the urgency are very differents and PSA/PSCs are indeed commonly used in countries with economies in transition, like Kurdistan. Read: http://en.wikipedia.org/wiki/Production_sharing_agreement. The other important issue is that after all opression and genocide during Saddan the Kurds don’t trust any CG anymore and they have learned they must be the lords of their own destiny. As for Kuwait, Baghdad has also an imense debt to Kurdistan. The 17% are just peanuts. To call Sweden, Finland or France for socialist examples is a bit odd. Have you been there? I do!
    What is important to think, and this is a matter of trust and confidence, is that the very fundament for Maliki’s government is the Erbil agreement. Now he is PM, he refuses to implement that agreement! For me this is a dishonest and fraudulent behavior, similar as during Saddam era.

  11. Re da Caste October 28, 2012 at 5:54 pm #

    Pls all, read this article accuratly. http://www.foreignpolicy.com/articles/2012/10/26/the_backfire_in_baghdad

  12. Uruki-the-Iraqi October 29, 2012 at 12:24 am #

    Mr. “Re da Caste”, we are discussing this issue with you calmly… The only obvious reasons for the KRG to insist on PSCs are due to your Kurdish clan members (the same leadership that is ruling the region for the past 40+ years) who are also personally going to benefit from these dubious and shady deals with ExxonMobil and other IOCs (Greedy executives which care about no one else but themselves and care less about IRAQ or IRAQIS) on behalf of the rest of the Iraqi and the Kurdish people… Today you do not trust the PM, yesterday you did not trust Saddam and before that you NEVER trusted anyone else… GOD knows if you are going to trust the next Iraqi PM (whoever he might be)… Yet Kurds are currently sharing the Iraqi government and are at top positions in Iraq (as you call it CG) from president Talabani to foreign minister Zebari to 53 other Kurdish MPs residing in the Iraqi parliament and you always try to blame others… That same 17% you call peanuts mounts to over 40 billions dollars since 2003 that went to rebuilding Iraqi Kurdistan… YES Sweden, Finland and others are not considered socialist countries but fundamentally they are socially motivated under their constitutions… You have to understand we love ALL of Iraq and we want what is BEST for ALL the Iraqis including our beloved Iraqi-Kurdistan and honorable brothers, the Kurds and whoever else lives in OUR beautiful KRG

  13. Re da Caste October 29, 2012 at 9:09 am #

    Mr Uruki, please answer two small questions that would resolve the all problem:

    1. when will the Erbil agreement be implemented?

    2. when will Kirkuk status referendum be implemented?

    Without a positive answer to these questions, I assure you there will not be any BEST FOR ALL the Iraqis.

  14. Uruki-the-Iraqi October 29, 2012 at 11:32 pm #

    Mr. “Re da Caste”, if we want to resolve ANY outstanding political issues in Iraq, we have to be flexible, accommodating, accountable and responsible… Not by demanding from the others and wanting to pass ONLY our agendas without respecting the opinions of others … If you pay attention to your questions they only concern Iraqi-Kurdistan (not the whole of Iraq)… But I will attempt to explain my opinions… First, the Erbil agreement is an ambiguous deal (not transparent) struck between the current RULING clans (Arabs and Kurds) never explained in detail to the rest of the Iraqi people (meaning scratch my back and I will scratch yours in return) and therefore, the true Iraqis are sick and tired of all the current politicians (we do not trust any one of them and THEY ALL must be replaced in the next elections)… Second, Kirkuk belongs to all the Iraqis (Kurds, Turkmens, Assyrians and Arabs) and not just to one particular group that wants to claim sole ownership to that city and great IRAQI province… Tell me, WHO wrote that referendum? And what purpose? Kirkuk, like the rest of beloved Iraqi cities and provinces belongs to ALL the IRAQIS… By the way, these conflicts, problems and issues (land, resources and control or rule) exist in all countries of the world, not just in Iraq… So, It is up to us (ALL the Iraqis), coming out of decades of dictatorship rules and tyranny, must work together jointly and positively to resolve our conflicts understandably, peacefully and responsibly away from negative means of threats, divisions and violent acts… I agree with you, it is a tough JOB for ALL of us, but with God’s help and mercy, we shall overcome!!

  15. Re da Caste October 30, 2012 at 2:54 pm #

    Kurds history is similar to the Palestinian one. After decades of opression and genocide they trust nobody. Why should they support a centralist Iraq? Either a federation with a weak CG or full independence. Everything else is s ilusion.
    I believe you are very naiv dreaming on going back to the Great Babylon and after all wars in the name of God, I don’t believe there is a God to help Iraq. But I wish you best of luck! End

  16. Mohammad October 31, 2012 at 11:12 pm #

    Mr. Re da Caste why are you so insistant on IRAQI division what is your agenda?

  17. Re da Caste November 1, 2012 at 12:18 am #

    My “agenda” is perhaps to tease out paranoid persons, who knows. END