Should We Stay Or Should We Go?

[DinarThug]

CNN. Not Broadcasting In Arabish So That U Can Actually Understand Wtf Ur Reading !

 

 

 

Should we stay or should we go?

April 24, 2014



Oil. The resource curse that a nation either benefits or suffers from. The resource that attracts many friends, a lot more foes, opens up opportunities to grow, and irritates relations with the envious. Iraq a country not only known for its growing sectarian and civil rivalries, but also for its oil, has indeed seen a large increase in oil output since the fall of Saddam Hussein; however according to the Wall Street Journal, Iraqi production has fallen since March by some 340,000 barrels a day, a decline of more than 9% from the February high, according to the International Energy Agency. An attack on an oil-export pipeline in northern Iraq was to blame. In addition, due to decades of sanctions, corruption, war, and a huge lack of funding in modernizing the infrastructure to move the petroleum from wells to tankers and keeping up with routine pump maintenance, investors like Exxon Mobil and Royal Dutch Shell, for example, are steadily looking elsewhere. 

Even Turkey, a long time partner in oil import from Iraq, have deemed an oil pipeline carrying crude from Iraq's Kirkuk oil fields to Turkey's Mediterranean port of Ceyhan as unusable because of persistent militant attacks. Turkey has also stated that this is a huge lose for Iraq; referring to the Baghdad-controlled pipeline, which has been pumping way below its 1.5 million barrels per day (bpd) of capacity. 

For these reasons and others, Turkey and other American companies have turned to Iraq’s northern region, the autonomous Iraqi Kurdistan. Sources state that Exxon Mobil Corp. and Chevron Corp. are now the top two investors on the list of the largest foreign companies operating in Northern Iraq independently of Baghdad. In addition, there are at least 40 other US companies operating in the region controlled by the KRG. 


Kurdistan controls a large chunk of Iraq and also a majority of the country’s oil and the Kurds have, in the beginning of this year, discovered a way to export the oil while bypassing the rest of the country. This has angered the Iraqi government and has even threatened to sue those countries and companies who export oil from Kurdistan. In addition to penalizing interested Kurdish oil seekers, the Iraqi government has frozen the Kurdistan Regional Government (KRG) share of the national budget. The President of Iraqi Kurdistan Massoud Barzani also says that Baghdad still has not sent the KRG budget payments for March and April. "They have only sent the budget for January and February's salaries, which wasn't enough, despite having dispensed the share of all other Iraqi provinces.” This has affected civil servants in northern Iraq who are receiving little to no salary.

Now, the KRG and Baghdad are at a standoff, both unable to reach a compromise on how to divide the oil revenues and responsibilities of exporting oil out of Iraqi Kurdistan. Recently it has been publicized that both parties did reach a pre-condition agreement, but the KRG argues otherwise. The problem lies mainly with the fact that the Kurds have built this oil pipeline within their own territory and with the “okay” of Turkey, found their way to the petrol market. The trucking of crude oil from Iraqi Kurdistans, Taq Taq oil field began on Jan. 8 with relatively modest volumes. The field is operated by Genel Energy, an Anglo-Turkish company headed by former BP CEO Tony Hayward. On Jan. 9, Hayward told reporters that the volume was expected to rise to between 10 and 20 thousand barrels per day in the next few weeks.

The Iraqi government of course doesn’t like this because they want control over the petrol in the country, and access to the revenues that they so desperately need given problems with their own oil pipelines. Thus allowing Iraqi Kurdistan to take full control of the oil in that region would shift the balance of power in the Kurds favor, leaving Iraq dry. Basically, there is a lot at stake for Iraq and it has been a struggle trying to negotiate a solution with the KRG. Thus, patience is wearing thin for the Kurds and Turkey. 

Turkey is waiting for Baghdad and Erbil to come to an agreement so that the oil can then be sold to buyers in Turkey and internationally via the Mediterranean port of Ceyhan. However, for technical reasons, Turkey can wait no longer. According to sources from the Turkish Ministry of Energy, about 1.5 million barrels of Kurdish crude oilwww.Ekurd.net have been received to date and Ceyhan port has a storage capacity of around 2.5 million barrels. Regarding this issue, Turkey's Energy Minister Taner Yıldız said, "Whenever we reach this storage limit, we have to decide about the next steps." In addition, the Iraqi Kurdistan’s economy is being strained by Iraq’s relentless attitude towards turning in budget payments to the KRG. 

For these reasons, many argue that this conflict is making the case that independent crude export would decrease dependence on Baghdad for paying the bills and make Iraqi Kurdistan a growing oil hub. Baghdad’s politically motivated delays and uncompromising efforts are driving the KRG closer towards cutting ties with the Iraqi government. Hence Barzani’s latest statement: “If the situation continues like this with Baghdad, we will declare confederation or independence. We have studied that confederation will resolve our issues (Rudaw).

The reason the KRG has been patient with Baghdad, is because it genuinely wants to reach a compromise but the issue of oil, and support for opposing sides in the Syrian war, is souring relations between the two. Many argue that breaking off from the Iraqi government and declaring independence now is in the KRG’s best interest. However doing so could cause many problems in a fragile region where every small shock could cause massive waves. 

However one cannot help but imagine what independence from Baghdad would mean for Iraqi Kurdistan, especially in terms of oil. According to sources, petrol industry estimates indicate that the KRG is sitting on 30 percent of Iraq’s proven oil reserves of 143 billion barrels, and has up to 6 trillion cubic meters in natural gas reserves. If Kurdistan were independent, it would be among the 10 richest countries in the world, expert’s say. This is huge for the Kurds and likely to tempt Kurds in Turkey and Iran to do the same. But Turkey as usual is against this, as well as the USA, Iraq, and much of the MENA countries who are not at all ready for another power player in an already long grueling game of territory claims, human rights abuses, poverty, and relentless Islamic groups and leaders. So what’s the solution? The Kurds are in a very different position today and play a more present and strategic role in this atmosphere of power politics so ignoring the inevitability of their success is of no benefit to anyone. At this point, it may indeed be argued that it is up to the KRG, upon whether independence from Baghdad will be declared and whether the start of a new mark in history is ready to be made.

http://ekurd.net/mismas/articles/misc2014/4/state7927.htm

[siberian_shaddow]

Much appreciated Thugs, I just don't see Iraq letting the Kurds break away from the rest of the country Bagdad would be losing so much money. I also believe the rest of Iraq could learn a Shiite more from the Kurds.

[Brisco]

The Kurds north looks lime ABU DHABI

Why the south looks like MAHAM

[billy goat]

This conflict goes back a long time.  I've long held the shortage of reserve capacity being the motivating factor behind Middle east political positioning.  Bagdad won't release it's claim to what oil is left in country (Kurdistan) and will stop at nothing to garner global support to gain total control of Iraqi proper. Our government is afraid of discourse (see the above) and is worried over perceived upset in markets and yet does little to endorse domestic production.  This is due in part to the Saudi cobal and it's influence in/on our economy.  They are vested in every sector of our society, i.e. banking, research, education, transportation, manufacturing etc. and once you anger them - repercussions abound - based mostly on lies.  The Saudis are no longer the official OPEC directors but their influence carries the majority of weight.  I see this (Sunni influence in Kurdistan) as yet another move on their part to exert control on a global level from a diminishing regional foothold.