Felix the Cat
12-04-2005, 01:39 AM
Alarm as Kurds drill for oil (http://news.ft.com/cms/s/69b2f3b2-6317-11da-be11-0000779e2340.html)
The Kurdish regional government’s surprise announcement that it had begun drilling for oil in the north of Iraq sparked alarm yesterday, two weeks ahead of national elections.
Iraqi politicians questioned the invocation of a disputed constitutional clause suggesting regional governments had the right to enter independently into contracts to develop new fields.
The KRG announced on Tuesday that Norway’s DNO company had begun drilling the Tawke well in the province of Dohuk near the Turkish border as part of a production-sharing agreement concluded in June 2004.
However, prime ministerial spokesman Laith Kubba said yesterday the central government had yet to be formally informed and would refer the matter to its legal adviser.
Concern about how Iraq’s oil resources will be shared has been a source of discontent among Sunni Arabs, who fear autonomous deals by Shi’ites in the south and Kurds in the north will cut them off from oil wealth.
Earlier Iraqi governments had contested the KRG’s right to enter into independent contracts. Sunni Arab politicians, meanwhile, said the Kurdish decision was a takeover of oil resources that ought to belong to the nation.
“This shows that the Kurdish administration in the north is not interested in safeguarding resources for all of the Iraqi people,” Reuters quoted Hussein al-Falluji, a prominent Sunni lawyer, as saying. “If they do not reverse their position we will fight this through diplomatic and political channels.”
The deal hinges on the controversial article 109 of Iraq’s constitution, which gives the federal government the right to manage oil and gas from “current” fields in co-operation with the regions and distribute it to the governorates according to their population. It does not spell out the division of responsibilities for exploration and production in new fields.
Kurdish leaders have previously asserted that the resources from new fields in the north are to be controlled by the KRG.
“The fact that they mention existing fields implies that there is reference to unexploited fields, and the inference is because they are not under the federal government’s powers they are under the control of the regions,” said Nicholas Somerville, executive director of the Kurdistan Development Corporation (KDC), a public-private initiative with the KRG.
In negotiations over the constitution, a regional right to develop unexploited fields was opposed by many Sunni Arabs from the oil-poor centre of the country, and is presumably one of the main points to come up in a discussion of possible constitutional amendments scheduled for early next year.
Since the lifting of sanctions on Iraq following the 2003 invasion, the KRG has been in negotiations with a number of parties, to explore the self-rule zone. At 115bn barrels, Iraq’s proven oil reserves are the world’s third largest, but 90 per cent of the country is unexplored.
In August 2004, then-oil minister Thamer Ghadhban said Iraq had “unconfirmed or potential” reserves of 214bn barrels. Of this, the KDC estimates the Kurdistan region contains some 45bn barrels.
The Kurdish regional government’s surprise announcement that it had begun drilling for oil in the north of Iraq sparked alarm yesterday, two weeks ahead of national elections.
Iraqi politicians questioned the invocation of a disputed constitutional clause suggesting regional governments had the right to enter independently into contracts to develop new fields.
The KRG announced on Tuesday that Norway’s DNO company had begun drilling the Tawke well in the province of Dohuk near the Turkish border as part of a production-sharing agreement concluded in June 2004.
However, prime ministerial spokesman Laith Kubba said yesterday the central government had yet to be formally informed and would refer the matter to its legal adviser.
Concern about how Iraq’s oil resources will be shared has been a source of discontent among Sunni Arabs, who fear autonomous deals by Shi’ites in the south and Kurds in the north will cut them off from oil wealth.
Earlier Iraqi governments had contested the KRG’s right to enter into independent contracts. Sunni Arab politicians, meanwhile, said the Kurdish decision was a takeover of oil resources that ought to belong to the nation.
“This shows that the Kurdish administration in the north is not interested in safeguarding resources for all of the Iraqi people,” Reuters quoted Hussein al-Falluji, a prominent Sunni lawyer, as saying. “If they do not reverse their position we will fight this through diplomatic and political channels.”
The deal hinges on the controversial article 109 of Iraq’s constitution, which gives the federal government the right to manage oil and gas from “current” fields in co-operation with the regions and distribute it to the governorates according to their population. It does not spell out the division of responsibilities for exploration and production in new fields.
Kurdish leaders have previously asserted that the resources from new fields in the north are to be controlled by the KRG.
“The fact that they mention existing fields implies that there is reference to unexploited fields, and the inference is because they are not under the federal government’s powers they are under the control of the regions,” said Nicholas Somerville, executive director of the Kurdistan Development Corporation (KDC), a public-private initiative with the KRG.
In negotiations over the constitution, a regional right to develop unexploited fields was opposed by many Sunni Arabs from the oil-poor centre of the country, and is presumably one of the main points to come up in a discussion of possible constitutional amendments scheduled for early next year.
Since the lifting of sanctions on Iraq following the 2003 invasion, the KRG has been in negotiations with a number of parties, to explore the self-rule zone. At 115bn barrels, Iraq’s proven oil reserves are the world’s third largest, but 90 per cent of the country is unexplored.
In August 2004, then-oil minister Thamer Ghadhban said Iraq had “unconfirmed or potential” reserves of 214bn barrels. Of this, the KDC estimates the Kurdistan region contains some 45bn barrels.