IRAQ OIL TROUBLE, 1

Even on the assumption to expect the worst in Iraq, this is all unimaginably, self-destructively difficult.

Interview: Iraq Kurd Leader On Oil Law
Ben Lando, May 9, 2007 (UPI)
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WHO
Qubad Talabani, son of Iraqi President Jalal Talabani and the Kurdistan Regional Government's representative to the United States

WHAT
Talabani’s views on the ability of Iraq’s leaders to reach a deal on sharing the country’s oil wealth

WHEN
The deal was ratified in February by the executive cabinet and passed (or more accurately passed on) to the Parliament, where is has found only contention. The Parliament has promised to resolve the matter by the end of May.

WHERE
Among the Gordian knots at issue is how to parcel the revenues of the (2 million barrels/day, 115 barrel reserves) oil fields in the Kurdish north and the Shi’a south between the three, largely ethnic, factions in the country. This may be more resolvable if reports of previously unrecognized oil deposits in the central Sunni region prove true, will be more difficult due to rival factions within both Shi’a and Sunni contingents but will be explosive if the (Sunni, non-Arab) Kurdish region is not satisfied.

WHY
- The Kurdistan Regional Government (KRG) is Sunni but non-Arab and has long represented a “break-away” segment of the Iraq “construct” created by the San Remo Agreement following from the Paris Peace Conference that settled World War I. The KRG was unrecognized and violently abused by Saddam-era Sunni powers until, in the wake of the 1991 Gulf War, the US and its allies established no-fly zones against Saddam’s Air Force, allowing the region to become autonomous.
- The KRG rejects the cabinet’s “Draft Hydrocarbon Law” of February. It is dissatisfied with the provision on revenue sharing. The KRG wants the oil apportioned, not the revenues sent to a Baghdad Central Bank by an Iraq National Oil Company (INOC). It also advocates an INOC independent of control by outside interests such as multinational oil companies.
- Tariq Shafiq, drafter of the original law last summer, has come out against the law because of negotiated alterations.

QUOTES
Talabani: "The oil issue for us is a red line…If a centralized oil regime is imposed on us, we will not participate in the state of Iraq…And we have to make it absolutely clear to our friends in Washington, to our brothers in Baghdad, this is a make-or-break deal for Iraq."
Talabani: "Trust is lacking in Iraq, and unfortunately it's been Iraq's miserable history that has created this system, this society that mistrusts each other, which is why something as critical as oil can be a trust-building measure…By putting in place mechanisms and institutions that can ensure that I will not get robbed again, that my resources will not be used against me again, will eventually over time build my trust."