Iraq’s autonomous Kurdistan region is pumping crude
from the disputed province of Kirkuk into its own oil infrastructure, raising
the stakes of a worsening political conflict with the central government in
Baghdad, reports Erika Solomon in Beirut and Anjli Raval in London Erika
Solomon in Beirut and Anjli Raval in London in a Financial Times
articles published last week.
The Kurdish Regional Government (KRG) appears to be making a serious effort to consolidate its control of the area, which is claimed by both Erbil and Baghdad, amid increasingly loud calls for Kurdish independence. Last week, Kurdish "peshmerga” forces seized control of two oilfields in Kirkuk.
"There has been a plan for several weeks now to sell
the oil from Kirkuk,” said a member of parliament, who confirmed that pumping
had begun but asked not to be named due to the sensitivity of the issue. "They
will try to sell oil as soon as possible, I believe, because Turkey is in
agreement, even though legally, the oilfield belongs to Iraq.” He said the KRG
parliament was preparing draft laws that it would use to claim its right to run
disputed areas such as Kirkuk – and its oilfields.
Kurds have long claimed Kirkuk, which sits atop some
of Iraq’s largest oilfields, as their historic capital. But it has been under
central government control and is also home to large Arab and Turkmen
populations, who have been wary of Kurdish moves to solidify control there. The
Kurds seized much of Kirkuk during a month-long blitz offensive by Sunni
insurgents led by theIslamic State of Iraq and the Levant(Isis),
who have seized swaths of territory in northern and western Iraq. Iraqi armed
forces fled military sites across northern Iraq and handed many of them over to
the peshmerga.
Laura El-Katiri, a research fellow at the Oxford Institute for Energy Studies, said it was unlikely the central government would be able to retake Kirkuk.
"This would give more impetus to more Kurdish oil exports independent from the central Iraqi government in Iraq,” she said. "We are seeing a state falling apart.”
Relations between Prime MinisterNouri al-Malikiand the KRG have been worsening since January, when political disputes led Mr Maliki to cut the region’s budget and the KRG moved tosell its oil directly to international marketsthrough a newly made pipeline that leads to Ceyhan, a port belonging to its main business partner, Turkey. "The central government owes us a lot of money and I think the KRG could very well claim that they will use any oil sales from Kirkuk as compensation,” the Kurdish MP said.
The KRG and the North Oil Company, which has long run Kirkuk oil production, appear to have made a deal with Baghdad’s knowledge to build a pipeline connecting to KRG infrastructure after insurgents in March sabotaged the Iraqi pipeline that ran through Kirkuk into Turkey. The Iraq Oil Reportsays Kirkuk flow rates can reach as high as 120,000 barrels a day.
Baghdad appears to be concerned Kurdish forces will
continue seizing central government-held oil infrastructure, the Iraq Oil
Report said, citing Iraqi units deployed to protect the Naft Khana oilfield
near Kurdish-controlled parts of northeastern Diyala province. The KRG is
currently producing about 125,000 bpd and its aim is to reach over 400,000 bpd
to compensate for their lost budget. That target could be reached if Kirkuk oil
is sold.
But it is unclear how easily the KRG will be able to
offload its oil – only one of four tankers loaded from Ceyhan has reportedly
been purchased, though Kurdish officials insist all have been sold. Baghdad had
already vowed to sue anyone who buys Kurdish oil and last week said it had
halted cargo flights to the region.
The Kurdish MP shrugged off concerns over retaliation, saying, "They’re not powerful enough right now to make problems with us . . . We are very confident.”
