Officials in Basra are reportedly trying to cancel a $17 billion Shell gas deal because they want a bigger say, highlighting the pressure on central government to ease its control over the provinces.
According to the report from Reuters, the province is increasingly restless with the slow pace of development and wants more control over its natural resources and revenues.
Demands for more provincial power have simmered for years in Iraq, split by ethnic, sectarian and tribal tensions, but the Basra push and an autonomy drive from Salahuddin [Salahadin, Salah ad Din] province threaten to stir tensions as the last U.S. troops withdraw.
The contract with Shell and Mitsubishi to capture flared gas in three southern Iraqi oilfields was signed on Nov. 24 despite objections from the Basra local council that it was not included in talks or the deal's signing.
Officials from the Basra Provincial Council filed a lawsuit against the Iraqi Oil Ministry on Nov. 25 demanding the cancellation of the gas agreement.
"In principle, we don't have any problem with developing the gas but when the contract is signed, there has to be an article that shows the provincial council has agreed ... Unfortunately, we did not know anything about this contract," said Sabah al-Bazouni, head of the Basra Provincial Council.
"Basra is the most suitable province to become an autonomous region."
Regional autonomy would give the province more power over finances, administration and laws, and an upper hand in supervising public property, which could loosen Baghdad's grip on the oil and gas sector.
The legal case is unlikely to deter Shell and delay the project, but it raises concerns about future disputes over oil and gas rights in Iraq, which is struggling to rebuild after years of violence just as Washington prepares for a full troop withdrawal by the end of December.