Lawless Oil Posted by Ilan Goldenberg

One common element of the "bottom up" approach and the Gelb-Biden Federalism approach is that both believe that without an agreement on equitable distribution of oil resources, these plans won't work.  The basic problem is that because the oil is all in the Shi'a South and the Kurdish North, the Sunnis would never agree to any kind of settlement that did not allow them to share in Iraq's wealth.  So this latest news about oil in Iraq should be a bit disturbing. 

While the national government has continued to dither the Kurdish regional government has gone ahead and started to sign agreements with foreign oil companies to develop their reserves.  They now have 15 different production sharing agreements to develop oil in Northern Iraq. Now, the Iraqi central government is threatening to blackball any company who signs a deal with the Kurds.  That's not a very credible threat.  Oil that sits under a war zone is much less valuable than oil that is below a stable and growing economy.

The likelihood here is that the Kurds are going to continue developing their oil and create a new defacto status quo.  Once this happens a national oil deal will likely be dead and with it the chance for any kind of sustained national political reconciliation along the federalist line.  In fact a number of people who I've talked to have worked these issues and sat it on negotiations believe that the train many have already left the station.

Comments

[Don Bacon]

Here's some (inaccurate) information from various sites, including the linked Kurdistan Regional Government site. Some of these listings could be dupes. It's difficult to see the specifics, and all the numbers don't add up. Note the absence of Big Oil.

"The latest contracts bring to 15 the number of deals finalised by the regional government since it passed its own oil law in August. Twenty international oil companies are now working in the region."

Contracts to:
*Texas-based Hunt Oil
*Kalegran Ltd, a wholly-owned subsidiary of MOL Hungarian Oil and Gas Plc
*Gulf Keystone Petroleum Ltd, a subsidiary of Britain's Gulf Keystone
*Texas Keystone
*India's Reliance Energy Ltd
*Reliance Exploration and Production DMCC, a wholly owned subsidiary of Reliance Industries Limited
*"a Western company"
*Kurdistan Exploration and Production Company, a government-owned firm
*OMV Petroleum Exploration GMBH, a wholly-owned subsidiary of OMV Aktiengesellschaft
*TNK-BP affiliate Norbest Limited
*a Korean consortium headed by Korean state-owned oil company KNOC Bazian Ltd.
*Hillwood International Energy company HKN Energy
*Sterling Energy (International) Limited, a wholly-owned subsidiary of Sterling Energy LLC
*General Exploration Partners Inc, a wholly-owned subsidiary of Denver-based Aspect Energy LLC.

"A further 24 blocks in the region are the subject of intense interest from international companies. There will be more announcements soon. These contracts will help the KRG achieve its goal of producing a million barrels of oil a day."
http://www.krg.org/articles/detail.asp?rnr=223&lngnr=12&smap=02010100&anr=21329

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