Saturday, November 03, 2012

Kurdish Oil Boom

The Economist reports on Iraqi Kurdistan's thriving oil industry:
Three years ago when they signed contracts with the Iraqi government, the oil majors were prepared to accept hiccups. But their patience has thinned with the arrival of an alternative source of Iraqi oil. Kurdistan, the semi-autonomous province in the country’s north, has been offering competing and much more lucrative deals. ExxonMobil’s decision last year to acquire six blocks in the region angered the central government, which considers the deal illegal and lays claim to Kurdish oil. But the world’s largest oil company started a trend. In July Total, Chevron and Gazprom all signed contracts with the Kurdistan regional government, potentially dooming their chances of winning future business in the south. BG, a British firm, was in Erbil, the Kurdish capital, on a scouting mission in late October.
If you are an Iraqi Kurd, why make a hard push for independence when you are doing so well as an autonomous region within an Iraq that has a weak central government?  The article, however, situates this development within a region in which Kurdish independence is still the goal of many, and not something where national boundaries can easily stifle the cross-border trends and loyalties.  One can easily see Syria's civil war leading to Kurdish autonomy or outright independence in a few years northeast of the Euphrates.  This puts a lot of pressure on southeastern Turkey, where pro-Kurdish parties were among the winners in the last elections.

As the article explains, Turkey's calculations about whether to allow a pipeline through its territory to get Kurdish oil to markets are tied up in how to response to this growing Kurdish power.  Some want to see Turkey use its geographic leverage to make Iraqi Kurdistan an ally against Turkey's Kurdish population, which seems simply unrealistic.  Another school of thought would accept a future Kurdish political unit but try to dominate in economically.  That may appease Turkey's business community, which tends to favor the ruling AKP, but won't satisfy nationalists.

If I am a Kurdish nationalist right now, I am feeling good about the regional trajectory.  The question on my mind is how to keep building autonomy without either provoking some sort of backlash or allowing the openings being created to eventually slip away.

(Also, if anyone cares, this is my 4000th post.)

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