12 December 2011

Is Iraq Headed for a Crackup?

The attached report by Patrick Cockburn, one of the best reporters now covering the Middle East, describes the growing tensions in Iraq over the question of sharing its oil wealth among its constituent regions. Specifically, Exxon is cutting an independent oil drilling deal with the Iraqi Kurds in northern Iraq despite the objections of the Iraqi central government in Baghdad.  Although Cockburn's report is important in its own right, and I urge you to read it carefully, the implications become even more ominous when they viewed in a larger historical context:

The long view of history is likely to record the greatest 'sins' of Iraq, Iran, and Libya prompting interventions by the West have been related to the control of oil -- not nuclear weapons; not any communist leanings during the Cold War; not support of worldwide terrorism.  

Each country committed the unforgivable sin of being governed at one time by nationalistic leaders who believed the oil under each country belonged to that country and should be controlled by the government of that country -- therefore, these leaders had to be removed: 
  • Iran - Mohammed Mosaddegh, a popularly elected Prime Minister of Iran, and a modernizer and social reformer, removed by a CIA/MI6 coup in August 1953. 
  • Iraq - Saddam Hussein, a murderous neo-Stalinist dictator, but also a modernizer and social reformer (e.g., major achievements in women's rights and education), removed by military force in 2003. 
  • Libya - Muammar Qaddafy, a quirky tribal dictator, but also a moderniziner and social reformer (e.g., major achievements in women's rights and education) removed by military force in 2011.  
One short-term common denominator in these imposed regime changes was that, regardless of how the regime change was justified or rationalized, the nationalist leader was replaced by a more compliant government that agreed to an opening of that country's oil fields to exploitation by privately owned western oil companies.  

While history does not repeat itself, memories of the past do condition events in the future.  Over the longer term, perceived wrongs are not forgotten, and such interventions can provoke blowbacks, which in turn provoke counteractions that further enmesh the intervening party in a growing welter of increasingly complicated conflicts.  

In the case of Iran, for example, the 1953 coup eventually backfired in 1979, when  Reza Shah Pahlavi was overthrown by the Islamic revolution led by the Ayatollah Khomeini.  Khomeini then established a regime retook control of Iran's oil fields, among other things.  But the Iranian game is not over, and the historical pattern of move and countermove is in play, with the nationalist (Islamic) regime of Iran again in the West's crosshairs, allegedly because of its nuclear ambitions and support of international terror.  Nevertheless, the glittering temptations of re-privatizing Persian oilfields are lurking in the background, attracting the private oil interests of the West like flies to honey.  

It is too early to tell if or how blowback will unfold in Libya or Iraq, and the histories, cultures, and the unfolding conditions in these countries are very different from those in Iran.  The privatization of Libya's oil fields is just beginning.  On the other hand, as Cockburn points out, a process of divide-and-conquer privatization is well underway in Iraq; and it is already creating potentially explosive ramifications.   

Furthermore, in Iraq, the potential for a regional blowback from the privatization of Iraq's oilfields is complicated by the unique detritus left over from the destruction of the Ottoman Empire, including the hypocritical colonialist assumptions implicit in 1919 Versailles Treaty, the empty promises of Woodrow Wilson's 14 Points, and the nationalist assumptions implicit in the 1923 Treaty of Lausanne  (see summary & text) which established the boundaries for the modern Turkish nation -- which in fact were a fait accompli imposed on the Allies by the stunning military accomplishments of Kemal Ataturk. In so doing, Ataturk (1) nullified the cynical Anatolian partition plan envisioned by the Allies in their stillborn 1920 Treaty of Sèvres and (2) forced the British to renege on their promise to give the Kurds an independent nation in what is now southeastern Turkey (but significantly the British did not include the oil rich Kurdish regions in Iraq in their promise of Kurdish nationhood), among other things.  

Thus the Exxon maneuver has the potential for inflaming the still unresolved Kurdish Question is all sorts of ways.  The the map hints at this complexity by telling use Kurds live,  and interested readers will find a short but excellent historical summary of the Kurdish question here.  

There are 20 million or so Kurds, and they are probably the world's largest ethnic group without their own nation.  While they are a tribal based society, and are by no means unified, their nationalist aspirations and minority rights have been ignored -- sometime brutally -- since the Treaty of Lausannne nullified the question of Kurdish statehood.  This has been true especially for the areas now encompassed by eastern Turkey and northern Iraq, but oppression has also occurred in Syria and Iran.  

The 2003 invasion of Iraq reinvigorated the Kurds' separatist ambitions once again.  But this time, the ambitions are being fueled by the oil wealth described below by Cockburn.  The emergence of an economically viable Kurdish nationalism changes the separatist game fundamentally.  Moreover, the increased the restiveness of the outlawed Kurdish Workers Party (PKK) in Turkey despite Turkeys recent efforts to accommodate itself Kurdish demands, threatens to spill over to destabilize and provoke violent reactions in Turkey as well as Iraq (see here for a recent example of this dynamic in action) -- and perhaps even Iran and Syria.  Interested readers can go here for a contemporary Turkish point view or here for a contemporary Kurdish point view on the separatist question.

If there is one thing the Wars of the Yugoslavian Succession ought to have taught the sclerotic elites shaping US foreign policy in the post-cold war era, it is that breaking up an ethnically diverse country previously held together by an iron hand does not necessarily improve protections of minority rights.  Just ask the Serbs in Northern Kosovo who have roots roots in the region reaching back a thousand years whether or not Kosovo's independence has improved their lot in life.

My guess for the future of Iraq and its immediate environs: Add oil to this volatile Kurdish Question, and we ain't seen nuttin yet. And that, dear reader, is why, if you have not already done so, you ought to read Cockburn's report.  


Published on Friday, December 9, 2011 by The Independent/UK

Exxon's Deal with the Kurds Inflames Baghdad
The oil giant has defied Iraq's government by signing up to drill in disputed territory
by Patrick Cockburn

The great Iraqi oil rush has started to exacerbate dangerous communal tensions after a major oil company ignored the wishes of the central government in Baghdad and decided to do business with its main regional rival.
The bombshell exploded last month when Exxon Mobil, the world's largest oil company, defied the instructions of the Baghdad government and signed a deal with the Iraqi Kurds to search for oil in the northern area of Iraq they control. To make matters worse, three of the areas Exxon has signed up to explore are on territory the two authorities dispute. The government must now decide if it will retaliate by kicking Exxon out of a giant oilfield it is developing in the south of Iraq.
Political leaders in Baghdad say the company is putting the unity of their country at risk. Hussain Shahristani, the Deputy Prime Minister in charge of energy matters, told The Independent in an interview in Baghdad that any oil or gas field development contract in Iraq "needs the approval of the federal government, and any contract that has not been presented to the federal government has no standing and the companies are not advised to work on Iraqi territory in breach of Iraqi laws".
Baghdad has had oil disputes before with the Kurdistan Regional Government (KRG), but the present row is far more serious because it is the first time "Big Oil" has moved into Kurdistan, showing that at least one of the major oil companies is prepared to disregard threats from the government of Nouri al-Maliki. Previously, only small independent foreign oil companies, without other interests to protect in the rest of the country, have risked signing contracts with the Kurds.
"Exxon Mobil was aware of the position of the Iraqi government," says Mr Shahristani, a former nuclear scientist who was tortured and imprisoned by Saddam Hussein. "We hear from the American government that they've advised all American companies, including Exxon Mobil, that contracts should not be signed without the approval of the federal government."
Whatever the prospects of finding oil in the north of Iraq, observers are surprised that Exxon is prepared to hang its future in Iraq on the outcome of the power struggle between Iraqi Kurdistan and the central government. Control of the right to explore for oil and exploit it is crucial to the authorities on both sides since they have virtually no other source of revenue.
The Kurds have won a degree of autonomy close to independence since the fall of Saddam, and the ability to sign oil contracts without reference to Baghdad will be another step towards practical independence and the break-up of Iraq. A parallel would be if the Scottish government were to sign exploration contracts in the North Sea without consulting London.
What makes the Exxon-KRG deal particularly inflammatory, says Mr Shahristani, is that three of the six blocs where Exxon is planning to drill are understood to be "across the blue line – that is outside the border of the KRG". This means they are in the large areas in northern Iraq disputed between Arabs and Kurds since 2003, but where the Kurds have military control.
The government must now decide if it will make good on its threats and replace Exxon at a mammoth oil field called West Qurna 1 at the other end of the country, north of Basra. Iraqi oil officials hint that Royal Dutch Shell might replace the American company.
Both sides have much at stake. The Iraqi government is totally reliant on its oil revenues to pay its soldiers, police force and civilian officials. It needs vast sums to rebuild the country after 30 years of war, civil war and sanctions. In 2009, it began to expand its oil industry by signing contracts with firms such as BP, Royal Dutch Shell and Exxon to boost production in under-exploited and poorly maintained fields.
These companies thereby gained access to some of the largest fields in the world, each with reserves of more than five billion barrels. Vast sums are being invested, mostly around Basra in the south of Iraq. Oil output, now at 2.9 million barrels a day, is due to rise to a production capacity of 12 million b/d by 2017, potentially putting Iraq on a par with Saudi Arabia as an oil exporter.
Mr Shahristani is pleased with progress so far, saying that what "we are doing in Basra is at least five times larger than the largest oil projects in the history of the oil industry so far."
Sitting in his vast office in a cavernous palace originally designed for one of Saddam's senior lieutenants, he holds up a chart showing the surging production from the Rumaila oilfield of 1.4 million b/d, more than Britain's entire current output of crude from the North Sea.
Iraqis are split on whether Exxon is being cunning or naive. 
  1. One explanation is that the oil company feels so powerful, or so essential to Iraqi oil development, that it can disregard the Iraqi government. 
  2. An alternative argument is that Exxon is dissatisfied with the West Qurna 1 deal and so does not mind walking away from it and looking for oil elsewhere. 
  3. A third is that the company got suckered by the Kurds.
Iraqi Arabs know that the Iraqi Kurds want to control as much of Iraq's oil reserves as possible to buttress their independence. Less easy to understand is why Exxon should willingly make its activities a central issue in the Arab-Kurdish confrontation which has for so long destabilised Iraq.
Flashpoint: Iraqi military bases
The transfer of Iraq's military bases [as US leaves] to local control is another flashpoint between the Kurdistan Regional Government and Baghdad, and some fear the dispute may boil over when US forces pull out at the end of the year.
Last month saw a tense standoff between the Iraqi army and local Kurdish forces at a US airbase in the northern city of Kirkuk, an oil-rich area long a point of dispute. The Kurdish police force reportedly blocked an army team from entering the base for an official handover from the US, unhappy that it was being transferred to Baghdad.
In an effort to calm the drama, the US ambassador, James Jeffrey, met Kirkuk's Governor, Najmaldin Karim, and Iraq's Prime Minister, Nouri al-Maliki, in the capital.
"We did not want a situation where we ended up shooting at each other," said Mr Karim.
The situation was defused when the central government made assurances that the base would be used for civilian aircraft only, a key demand of the Kurds.
However, once the base is handed over to Iraqi control, Washington will have little control over whether Baghdad sticks by its verbal agreement. Indeed, Ali Ghaidan, the commander of Iraq's ground forces who led the army team that eventually entered the base, has since publicly ruled out the possibility of the base being turned into a civilian airport – saying it is of too much strategic importance to Iraqi forces.
Reports of Kurdish security forces, known as peshmerga, bolstering their presence in Kirkuk have raised questions over how long the lid can be kept on this simmering conflict.