How Fighting in Iraq Is Helping the Kurds — and Oil Companies

An employee works at the Tawke oil field in the Kurdish region in northern Iraq, on May 31, 2009.

Hadi Mizban/AP

AA Font size + Print

An employee works at the Tawke oil field in the Kurdish region in northern Iraq, on May 31, 2009.

The current offensive in Iraq may be the tipping point for Kurdistan and the disputed, oil-rich province of Kirkuk. By Steve LeVine

An early apparent loser in the Iraq upheaval is prime minister Nuri al-Maliki, who seems certain to come out of the fighting substantially weaker. And among the early winners is the autonomous region of Kurdistan that encompasses northern Iraq—Kurdistan and international oil companies that have defied Baghdad to work there now appear to have a clearer shot at exporting their crude.

Over the last three years, Kurdistan has signed a series of contracts with foreign oil companies,  including ExxonMobil, Chevron and France’s Total. Al-Maliki has complained bitterly about the deals, yet the companies have continued to explore and develop local oil fields, and the financial and political impact of this activity has given Kurdistan the effective status of semi-statehood.

The Kurds have an estimated 45 billion barrels of oil and have a long planned to be exporting 400,000 barrels a day this year, but until now dividends have been limited.

Kurdistan and foreign oil companies have managed to export some of the crude, transported first by truck and then tanker, despite the Baghdad government’s declaration that all their activities are illegal. But, although a big export pipeline is now complete and millions of barrels of oil have been shipped through it to the Mediterranean port of Ceyhan, none of these volumes has been actually sold.

Tankers containing 2 million barrels of Kurdish oil are at sea awaiting buyers, who are apprehensive while Baghdad threatens to sue anyone who purchases it.

The current offensive by an al-Qaeda affiliate may be the tipping point. Disciplined Kurdish forces now control not only Kurdistan but the disputed, oil-rich region of Kirkuk, which lies just to its west. The region has been autonomous since the first Gulf War in 1991, and its army has steeled itself to defend Kurdistan against Baghdad’s forces.

The Kurds’ army, called the peshmerga, are skirmishing with fighters from the al Qaeda militia outside Kirkuk, and the fighting could go on for some time. The Kurds are likely to prevail—they not only are seasoned fighters but outnumber the militants more than 10-1—and some analysts think they will parlay Kirkuk and a battle victory into agreement by Baghdad to allow the oil exports.

The exports do seem far likelier. But given the turn of events, the Kurds are not likely to settle for just exporting any longer. Baghdad seems highly unlikely(paywall) to get Kirkuk back.

Close [ x ] More from DefenseOne
 
 

Thank you for subscribing to newsletters from DefenseOne.com.
We think these reports might interest you:

  • Software-Defined Networking

    So many demands are being placed on federal information technology networks, which must handle vast amounts of data, accommodate voice and video, and cope with a multitude of highly connected devices while keeping government information secure from cyber threats. This issue brief discusses the state of SDN in the federal government and the path forward.

    Download
  • Military Readiness: Ensuring Readiness with Analytic Insight

    To determine military readiness, decision makers in defense organizations must develop an understanding of complex inter-relationships among readiness variables. For example, how will an anticipated change in a readiness input really impact readiness at the unit level and, equally important, how will it impact readiness outside of the unit? Learn how to form a more sophisticated and accurate understanding of readiness and make decisions in a timely and cost-effective manner.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • A New Security Architecture for Federal Networks

    Federal government networks are under constant attack, and the number of those attacks is increasing. This issue brief discusses today's threats and a new model for the future.

    Download
  • Information Operations: Retaking the High Ground

    Today's threats are fluent in rapidly evolving areas of the Internet, especially social media. Learn how military organizations can secure an advantage in this developing arena.

    Download

When you download a report, your information may be shared with the underwriters of that document.