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Iran Interferes in Iraqi Kurdistan

12:40 PM, Dec 1, 2011 • By STEPHEN SCHWARTZ
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The largest number of oil and gas agreements with the KRG have involved investors from Canada (14 licenses) and South Korea (12 licenses), with U.S.-based enterprises accounting for 8 licenses. Other interested parties are based in Kurdistan itself, Turkey, Britain, the United Arab Emirates, Austria, Hungary, Norway, China, Australia, India, France, Russia, Moldova, and Spain. In February 2011, thanks to an interim agreement with Baghdad, the KRG resumed exporting oil, which had stopped in 2009.

Firms investing in the KRG’s energy potential were typically small (except for the Chinese SINOPEC and Spanish Repsol), until ExxonMobil became the first “supermajor” firm to announce, at the end of October, that it had signed accords with the KRG for oil and gas exploration at six locations. The Baghdad government responded angrily, claiming that ExxonMobil acted without the authorization of U.S. authorities. Iraqi second deputy prime minister for energy affairs Hussain Al-Shahristani, who is independent of any party, denounced the ExxonMobil involvement with the KRG as illegal. The latest SIGIR report notes that Hess Corporation, an American energy company, was banned by the Baghdad authorities from a fourth round of licensing for 12 new exploration blocks elsewhere in Iraq after it signed a contract with the KRG.

Baghdad has further warned it would cancel approval of exports by ExxonMobil from its large oilfields near Basra in southern Iraq, as retaliation for the company’s KRG efforts. In mid-November, Royal Dutch Shell withdrew from development talks with the KRG, to protect its assets in southern Iraq, which include a natural gas project worth up to $17 billion. Baghdad then threatened to hand over ExxonMobil’s southern holdings to Shell. Baghdad has expressed concern that Chevron and the Italian firm ENI may enter Kurdistan.

Iraqi Kurdistan has succeeded in attracting such outside investors because of its security. SIGIR reports that no American soldier or civilian has been killed there since 2003, and only two major terrorist bombings have taken place in eight years. The KRG has accomplished an important social advance in adopting legislation prohibiting domestic violence, including the practice of female genital mutilation, which was widespread in Kurdish culture, forced marriage, child marriage, arranged marriage between young women and old men, marriage by trade-off of women between different families, demands for dowries, forced divorce, and marriage as a payment in lieu of money to settle blood feuds.

As SIGIR points out, on August 30, 2011, the KRG became the first Iraqi region to provide its residents with electric power 24 hours daily, and exports electricity to Kirkuk. By contrast, Baghdad, on average, has power only four hours each day. The KRG’s positive example of steady improvement in its people’s lives began when it came under U.S. protection in 1991, during the presidency of George H.W. Bush, and it has achieved more since George W. Bush acted to remove Saddam Hussein in 2003. But according to Kurdish blogger Shwan Zulai, “The KRG was taken by surprise when . . . the scale of the U.S. drawdown became clear.”

The prospect of major U.S. and foreign hydrocarbon enterprises operating under Iranian “protection” in the KRG should indicate that something had gone very wrong. Much remains to be done in extirpating corruption and other abuses in the KRG, but if it falls into Iranian hands, or its resources are usurped by Baghdad, or both, it will be an indictment of Obama's policy of a rapid and heedless ending of the U.S. presence in Iraq.

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