The battle for Iraq’s oil goes on. Iraqi Kurdistan is intent on controlling its own oil, Baghdad is intent on wresting that control from them. Will the impasse ever be solved? Only if both sides see reason, one commentator argues in this article from NIQASH.

Ever since oil was found in Iraq nearly a century ago, there has been a battle to control the most important commodity the country has known. In the beginning, the struggle over oil played out between foreign or colonial powers. Then when the Iraqi oil industry was finally nationalised in the early 1970s, the struggle for control of the oil industry became internal. Today it dominates domestic politics.

Ever since the government of the semi-autonomous region of Iraqi Kurdistan, in the north of the country, decided to come up with its own version of oil and gas laws in 2006 and 2007, the Kurdish and the Iraqi federal government in Baghdad have been on a collision course.

The Kurdish formulated their own laws because they were largely frustrated by the federal government’s inability to come up with such a law and to start to develop the oil industry. Iraqi Kurdistan then began to negotiate contracts with international oil companies and to move on without Baghdad’s explicit approval.

Since then the powers-that-be have been deadlocked, with neither side willing to compromise. Baghdad is refusing to recognise contracts made by the Kurdish region and threatens to blacklist international companies operating there. In return the Kurdish halted oil exports from out of their region.

In fact, it is only relatively recently that the Kurds have been able to control the oil under their own feet – and it is hard to imagine they would ever give up those rights, especially now that huge companies like Exxon Mobil and other major oil companies are lining up to do business in the region.

Advertising Feature

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

ExxonMobil, Total

Action Calls:

• Sadr threatens no-confidence within 15 days:Not likely to result in no confidence, but may result in movement on some issues.
• Exxon signs contract to drill 20 wells with IDC: Signals Exxon’s commitment to West Qurna 1, and tacit support at Ministry of Oil.
• Our take on 4th Round contracts: Auction will only be first test for viability of exploration under fixed payments.

Headlines:

• Qubad Talabani to return to Erbil: Most likely succession planning and sign of unity, but also signal to Baghdad?
• Tensions with Sadr in Baghdad, Basra: Look to Maliki’s relations with Sadrists as signal of how far he’s willing to push.

Calendar Events Discussed:

• May 23 – P5+1 Nuclear Talks in Baghdad
• May 30-31 – 4th Round Oil and Gas Auction

Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.

The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford and currently based at the Norwegian Institute of International Affairs. It is reproduced here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Over the past week, much fanfare has attached to a 9-point ultimatum letter that was written by the Maliki critics convening in Arbil on 28 April (Kurdish president Masud Barzani, Ayad Allawi and Usama al-Nujayfi of Iraqiyya, Muqtada al-Sadr) and then sent to the bloc leader of the Shiite alliance, Ibrahim al-Jaafari. It has been clear for some time that the letter demanded Maliki’s adherence to the contents of the letter within 15 days or a move to sack him would be initiated in parliament. However, the 9 points themselves have not been published before they appeared in the hardcopy version of the Sabah newspaper this morning [Saturday].

Unfortunately, the letter exudes the usual Iraqi grandiosity and abstraction that have also been the main weaknesses of previous “agreements”. The first two points include generalities like providing services to the Iraqi population, adherence to the constitution, striving for consensus and maintaining democracy! Which Iraqi wouldn’t subscribe to that in theory?

The third point is somewhat more specific, in that it calls for the adoption of the Arbil agreement, the 18 recent points of Muqtada al-Sadr (all of which are useless generalities except for a praiseworthy call for Iraqi support for the oppressed peoples of Bahrain and Syria alike), and, apparently added for good measure, the “memorandum of understanding which the Kurdistan Alliance presented and to which the chief of the government agreed”. The latter sounds perhaps like the Kurdish 19 points of autumn 2010 which were augmented to 25 points in bilateral dialogue with the Shiite alliance in late October that year? Maliki is supposed to have said yes to that and possibly signed as well, but this is difficult stuff that is even harder to implement than Arbil.

The fourth point of the leaked letter is a little bit more specific in that it addresses the problems of ministries governed by deputies and acting ministers. It also underlines the independent commissions and the importance of them staying independent. The electoral commission, in particular, is highlighted as an area of concern.

Alas, with the fifth point it is back to hopeless generalities. Revive the role of parliament. Yeah right. Bring it to life! Maybe that is not for the executive to take care of after all. Sixth point, unsurprisingly, bring an end to dictatorial tendencies in government, please. Seventh, avoid a politicized army and security forces.

The eighth point contains the ultimatum: Unless there is adherence (iltizam) to these principles the matter will be left in the hands of the Shia alliance to initiate a move to withdraw confidence in the government and form a new one – a “real partnership government”. Oh, and just one more: Ninth, the premiership will be limited to two terms to secure peaceful transfer of power and democracy and avoid dictatorship. Just an afterthought, apparently.

In a way, the hapless language of the letter rescues Maliki and the Arbil conventioneers alike. What is demanded, after all, is “adherence” not “implementation”. Probably the safest thing for Maliki is to make that declaration before 13 May. “I adhere”. He will probably add, as long as everything is within the constitution. Most of it isn’t, of course, and actually requires several years of special majority votes in parliament, popular referendums and possibly supreme court reviews. But that is a different story. It is one that was conveniently forgotten at Arbil in 2010 and it can be forgotten again.

Both sides will declare victory; Maliki will remain premier as long as the Sadrists don’t get even more exasperated than they already are. Perhaps the one remaining hope now relates to the electoral commission: Maliki is unhappy with the current one and needs a new one. That can only happen via a majority vote in parliament. Maybe that – more than letters from Arbil – can serve as an effective reminder that he also sometimes needs to broaden his alliance beyond its current state.

By Michael Aron, Ambassador of the United Kingdom to Iraq. This article was originally published by Rudaw, and is re-published with permission by Iraq Business News.

Rather than the usual one or two day visit to Erbil, I have just spent a week in Kurdistan Region travelling to Suleymaniya, Dohuk, Soran and Shanidar. What a country; a land blessed with breathtaking mountain views, hydrocarbons, fertile plains, fast-flowing rivers, a deep and remarkable history and, more important than all of that, a resourceful, determined and tolerant people thirsting for international exchanges. All around me as I travelled and spoke to people I heard about change, progress and optimism for the future.

Iraq over the last few decades has been broadly inward looking; Kurdistan which has had more than its fair share of isolation is now determinedly outward looking. That is the mark of a confident society and body politic and surely in this globalised world a necessary ingredient for sustainable growth. It was good to see Iraq generally more confident and outward looking following the successful Arab League Summit in Baghdad.

I heard this confidence in a series of discussions Chris, our Consul General in Erbil and I had with students in Suleymaniya, Dohuk and Soran. Judging by the students we met, Kurdistan Region will have a vibrant and dynamic future. And so, I am thrilled that UK seems to be Kurds’ partner of choice for higher education. I was able to open the new centre for language and academic development in Soran. The centre is jointly run with University College, Plymouth. Soran and Plymouth had their first discussions in June 2011. Only ten months later the centre was opened. That shows the ambition and energy of Soran and the responsiveness of UK higher education.

It looks as if Bristol University’s groundbreaking collaboration with Suleymaniya on researching and reducing gender based violence will continue for another three years. Kurdish society is at its best and bravest when it tackles head-on such difficult issues.

The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford and currently based at the Norwegian Institute of International Affairs. It is reproduced here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

At first there appeared to be some good news from the Iraqi parliament today. After several attempts and much discussion, altogether 23 judges for the Iraqi court of cassation received parliamentary approval.

The cassation court vote had previously exhibited the usual problems of Iraqi politics. Sadrists had complained that some of the candidates had Baathist pasts. Iraqiyya had called for individual votes, attacking Prime Minister Nuri al-Maliki for attempting to impose “political” candidates through his demand for a single vote on the whole batch of candidates. Shiite alliance members had attacked the Kurds for insisting on a Kurdish quota of judges.

So when news broke today that 23 judges had been approved, it seemed to represent a positive development. Reports that a 24th judge had not been approved would seem to suggest that Iraqiyya’s call for individual votes had been respected. Early reports said as “many” as 212 MPs had been present (out of 325 deputies altogether – this pathetic figure is unfortunately above average). If true, it would have meant cross-party support for one of the main pillars of the Iraqi judiciary.

But, alas, there are some problems in the official parliament report. Attendance figures here often differ from initial reports, and today’s number is given as no more than 165. Additionally, news report suggest that the votes on the judges often split along party lines, with some votes splitting the chamber almost in half. For example, one particularly disputed judge supported by Iraqiyya and opposed by Maliki first received 71 votes (less than a majority) but then there was a second vote due to alleged technical issues where he got 99 votes.

What these numbers show above all is the continued failure of Maliki critics to get close the magical 163 mark needed to unseat him. At the same time, of course, it shows Maliki himself is far away from reaching the “political majority” alternative his allies sometimes talk about.

Perhaps the first thing all sides should address is the scandalously high number of absent deputies. Simply filling up the parliament chamber could in itself have some valuable impact on this stalemated situation.

In 1993, the United Nations General Assembly proclaimed 3rd May to be World Press Freedom Day (WPFD), a day which, among other objectives, serves as a reminder to governments of the need to respect their commitment to press freedom.

According to UNESCO figures, since 2008 a total of 26 Iraqi media workers have been killed, the most recent of which was just weeks ago in Tikrit.

The Committee to Protect Journalists (CPJ) currently ranks Iraq as worst in the world in its Impunity Index for the fifth consecutive year, with not a single case brought to justice.

Meanwhile, Iraq pushes ahead with new laws that have the potential to further stifle freedom of expression.

This is a concern not just from a social perspective, but also from a business perspective; the United Nations cites a correlation between press freedom and economic development, and says, “a free press is not a luxury that can wait until better times; rather, it is part of the very process through which those better times are achieved“.

So on this World Press Freedom Day, we remind ourselves of Article 19 of  the Universal Declaration of Human Rights:

“Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.“

Advertising Feature

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

ExxonMobil, WesternZagros

Action Calls:

• Sadr in Erbil to mediate on crisis : Sadr won’t resolve stalemate. Watch Baghdad and Erbil for signs.
• WesternZagros discovers new oil field, shares rise 20%: Hopefully those who may have sold into strength were able to get back in.

Headlines:

• NA Still Supports Maliki…With Conditions: Reminder of limits of Maliki’s power.
• Second SPM exports two million barrels in first shipment: Kurdish oil becomes less relevant, though not totally irrelevant.

Calendar Events Discussed:

• May 23 – P5+1 Nuclear Talks in Baghdad
• May 30-31 – 4th Round Oil and Gas Auction

Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.

Iraq’s the deputy head of the parliamentary security and defence committee, Iskander Witwit, has told Reuters that Iraq will take delivery of the first 24 of 36 F-16 fighter jets it has ordered from the United States at the beginning of 2014.

He said the first 24 planes would make up two air force squadron, and Iraq would be in the market for more planes in the future.

“Iraq intends to have equipment which is more developed than neighboring countries have. Small neighboring countries like Kuwait even have five squadrons,” Witwit said.

The announcement has increased tensions between Erbil an Baghdad. According to AFP, Massud Barzani, the president of Iraq’s autonomous Kurdistan, said he opposes the sale of F-16 warplanes to Iraq while Nuri al-Maliki is premier, as he fears they would be used against the region.

“The F-16 must not reach the hand of this man [Maliki],” Barzani said. Placing some hope in the region’s relationship with ExxonMobil, he added: “If ExxonMobil came, it would be equal to 10 American military divisions … they will defend the area if their interests are there.”

(Sources: Reuters, AFP)

would be in the market for more planes in the future