Kurds Drill for Oil without Baghdad
Last year, the Kurdistan Democratic Party (K.D.P.), which controls a portion of the Kurdish region in the north, signed a deal with Norway's DNO ASA to drill for oil near Zakho. On uncertain legal ground, drilling for the project began on December 9, 2005. The central government reacted with surprise and indignation as it claimed the K.D.P. did not consult with Baghdad before signing the deal.
The Kurds claim that all new oil projects fall under the jurisdiction of the regional government in which the project will exist. Baghdad points to a clause in the constitution that says the regional governments must act in consultation with the central government when signing any new oil deals. The Kurdish region will not share any proceeds from the new project with the central government, as the constitution does not appear to require it to do so.
The prime minister of the Kurdish northern region, Nechirvan Barzani, clearly stated the Kurdish position on the subject: "There is no way Kurdistan would accept that the central government will control our resources." This oil project is the latest example of how the Kurdish region is preparing to distance, and possibly separate, itself from the central government. Other than because of U.S. pressure and larger geostrategic concerns, the main reason that the Kurdish region has not severed ties with Baghdad has to do with the oil-rich city of Kirkuk. In negotiating the Transitional Administrative Law, the Kurds established a strong legal case for control of Kirkuk; indeed, the new constitution all but guarantees that Kirkuk will join the Kurdish region by simple majority no later than 2007.
Once control of Kirkuk is established, there will be fewer reasons for the Kurds to remain part of the greater Iraqi state. Leading up to this possible point of separation, it can be expected that the Kurdish region will act to firm up its claim to autonomy through similar tactics as the DNO oil deal.
The DNO deal and other agreements in the works have inflamed Sunni Arab fears that Iraq is headed toward fragmentation or regionalization, developments that would leave them with the resource-poor central region. While there is to be a constitutional committee to suggest changes to the constitution that would only require a simple majority in the parliament to pass, there is little chance that the Kurdish and Shi'a members would allow the laws governing oil projects to be rewritten.
Without such a change, the regions in which new oil projects will be founded -- the Kurdish north and Shi'a south -- will gain in power as their coffers fill with new revenue from such projects. The central government can only expect revenue from currently existing projects, while the region in which the project is built can control any revenue from future projects.
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