In early December 2008, Baghdad and the Kurdistan Regional Government (KRG) seemed like they were on the verge of a groundbreaking agreement over the country’s oil. This would not only have been important for the development of Iraq’s most important resource, but also a major step towards reconciliation. The deal was to allow the Kurds to ship oil through the northern Iraq-Turkey pipeline in return for concessions to pass a new hydrocarbon law. Talks broke down almost as soon as they began. The Iraqi Oil Minister Hussain Shahristani demanded that the Kurds rescind the independent oil contracts they signed, while the KRG wanted a percentage of the oil profits coming from their fields. Neither side would budge and the deal collapsed. Since then, Oil Minister Shahristani has made a series of statements attacking the Kurdish Regional Government, pointing to the increasing divisions between Arabs and Kurds.
For example, the Oil Minister recently gave two interviews with the Iraqi paper Azzaman. On December 22 the newspaper published an interview with the Oil Minister. In it, Shahristani repeated his long-standing belief that only the central government has the right to sign oil deals and collect profits from them. This is in opposition to the Kurdish stance that the regional government has the authority to sign and develop its own oil. On January 3, another talk with the Oil Minister was printed where he claimed the Kurds were exaggerating how much oil they were producing. More importantly he said that most of it was being smuggled to other countries. Despite having signed over twenty independent oil contracts, only one company and field is actually producing crude. That is Tawke in Dohuk operated by the Norwegian DNO company. They produce about 10,000 barrels a day. Some of it is for local consumption, but most of it is actually being smuggled into Iran. The Kurds are doing this because they are prohibited from exporting oil legally without permission from Baghdad.
Oil Minister Shahristani is one of the many new Iraqi nationalists emerging since the invasion. He, along with Prime Minister Nouri al-Maliki, have been exploiting the nationalist banner through their control of the government. Both have agreed to run together in the upcoming elections, and have opposed the aspirations of the Kurds to annex disputed territories and gain greater autonomy by fashioning and profiting from their own oil deals. Shahristani and Maliki also advocate a strong central government in Baghdad. This shows that increasingly, Iraqi nationalism is being defined in terms of opposition to the Kurds as much as anything. This will likely lead to more divisions within the country, yet that is part of the post-sectarian war status quo that is forming. Political competition and the ethnic rivalry between the Arabs and Kurds are now driving issues, and are only going to become more important as elections near and the Americans begin drawing down most of their forces in the next couple years.
Amara, Mostafa, “Kurds cannot collect oil royalties, says minister,” Azzaman, 12/22/08
Hanna, Michael Wahid, “Through the cracks,” The National, 12/19/08
International Crisis Group, “Oil For Soil: Toward A Grand Bargain On Iraq And The Kurds,” 10/28/08
Shattab, Ali, “Kurds illegally sell oil produced in their region, minister says,” Azzaman, 1/3/09
Visser, Reidar, “Iraq’s Provincial Elections: Another D-Day Approaching,” Historiae.com, 6/16/08
- “The Map of Electoral Coalitions South of Baghdad Is Taking Shape,” 10/31/08
Zaair, Karim, “Kurds will not export oil unless they rescind deals with foreign firms, oil minister says,” Azzaman, 12/6/08