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Daily Column
Iraq Papers Saturday: Oil Politics
Oil Ministry and Kurdistan Battle over Deals, ICG Report Causes Stir in Baghdad
By AMER MOHSEN 11/16/2007 4:28 PM ET
On its front page, Az-Zaman focused today on the ongoing feud between the Iraqi Oil Ministry and the Kurdistan Government over the legality of oil deals signed by the Government of the Kurdistan Region. The issue began when the Kurdish Government passed a “local” oil law, regulating the exploitation of mineral resources in Iraqi Kurdistan and allowing the local government to strike deals with foreign companies, while a national oil law is yet to be approved by the Iraqi legislature. Furthermore, following the approval of the Kurdistan oil law, the local government started handing out contracts to foreign companies to explore and exploit mineral resources in Kurdistan.

The Iraqi constitution allows autonomous Regions, such as Kurdistan, to pass laws governing local affairs, but the scope of such laws and their status when they conflict with national laws remain murky. Husain al-Shahrastani, the Iraqi Oil Minister, decided that any deals struck with the Kurdistan Government, without the approval of the central Iraqi Government, would be illegal, and that any oil extracted under such agreements will not be exported from Iraq. Despite Shahrastani’s threats, Az-Zaman said, the Kurdistan Government has signed a total of seven deals with foreign companies to exploit oil fields in the regions of Suleimaniya and Arbil. Furthermore, the paper added that these deals involve production-sharing agreements.

Az-Zaman said that on Thursday, Shahrastani announced from Riyad that all companies involved in the Kurdish oil deals will not be allowed to operate in Iraq, that their oil will not be exported (the Ministry of Oil still supervises all exports of Iraqi oil), and that “(these companies) will not have the opportunity to do business with any official institutions in the future.”

Shahrastani’s threats are double-edged: on the one hand, the Minister is pressuring the Kurdistan Government to re-negotiate the deals with the Central Government and accept the sovereignty of the Oil Ministry over oil exploitation in the future; on the other, Shahrastani is trying to scare off potential investors in Kurdistan, by indicating that their companies may face legal trouble, and will be excluded from future investment opportunities.

According to Az-Zaman, the Kurdistan Government riposted, calling Shahrastani’s threats “irresponsible and illegal,” adding that “Shahrastani’s threats will not scare away the (oil) companies, who will move forward in executing their contracts with the (Kurdistan) Region.”

In other news, according to al-Hayat and al-Mada, conflicting reports are spreading in regards to a Turkish cross-border operation in northern Iraq. While Turkish military sources affirmed that their forces have started an anti-PKK operation in Iraqi Kurdistan, al-Mada quoted a “high-level Iraqi officer in the border guards” who said that there were no signs of Turkish intrusions in the North.

Al-Mada said that the number of Turkish forces stationed along the borders has risen sharply in the last few days, which could be seen as preparation for a coming invasion, but that Iraqi sources are yet to report any Turkish actions within Iraqi territory.

In Az-Zaman (international edition), Sadrist leader Baha' al-'A’raji claimed that the US is extending “intelligence and logistical support” for the Supreme Islamic Iraqi Council (SIIC) in its conflict with the Sadrist Current. Al-'A’raji added that the US support comes in the context of a broad agreement struck with the governing “four-party Coalition,” which groups the SIIC along with Da’wa and the two mainstream Kurdish Parties.

Al-'A’raji’s statements come in the aftermath of the publication of a report by the International Crisis Group citing US support for the SIIC, and describing its implications on Iraqi politics. The ICG report caused a stir in Baghdad, with groups like the Sadrist Current viewing the report’s findings as validating their past claims, especially the infiltration of security agencies by SIIC loyalists. While the SIIC found itself in a defensive position, being accused of waging a US-funded war against the Sadrists; the paper quoted an SIIC leader as saying “we deny such reports; we receive no support from any side against another.”

Lastly, al-Hayat described an escalating controversy between major Sunni groups over the closure of the headquarters of “the Association of Muslim Scholars.” While the Association indirectly accuses the Islamic Party of standing behind the decision, other Sunni leaders came out in support of the Association.

While the Islamic Party refused to answer the Association’s accusations, al-Hayat said, and called the matter “an internal affair,” ‘Adnan al-Dulaimi, leader of the largest Sunni bloc in the Parliament, defended the Association and called for the decision to close its mosque to be rescinded.

While the Association claims that the closure of its headquarters comes because of its “opposition to the US occupation and to the sectarian militias that infiltrate the government,” the Sunni endowment says that it closed down the mosque because of the Association’s apologetic position towards al-Qa’ida.


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