Thursday, November 29, 2007
Seeing Other People, At Least that's What We Say We Are Doing
Two top Kurdish leaders are a long way from the mountains of northern Iraq this week.
On Monday night, Omer Fattah Hussain was the toast of a dinner held at the 10,000-square-foot McLean mansion of Ed Rogers, a Reagan White House political director and current chairman of the lobbying firm Barbour Griffith & Rogers. In an opulent living room just off an art-filled entryway with a curved double stairway, the deputy prime minister of the Iraqi Kurds' autonomous region mingled with such luminaries as former assistant secretary of defense Richard Perle, former White House aide I. Lewis "Scooter" Libby and former White House press secretary Tony Snow.
One wonders whether such staunch war supporters such as Richard Perle were warning Hussain that the oil deals he was seeking would serve to undermine the central government's authority and make the passage of an equitable oil sharing law an even more remote possibility.
Today, Hussain travels to Houston with Ashti Abdullah Hawrami, the Kurdish regional oil minister, to woo an even more important audience: U.S. oil companies.
After more than a year of political deadlock in Iraq over a national petroleum law, the Kurdistan Regional Government unanimously adopted its own petroleum legislation in August. In the past month, it has signed a dozen oil exploration contracts and hopes that foreign firms will ultimately invest $10 billion in the oil sector and bring 1 million barrels a day of new oil production from the Kurdish region over the next five years. [...]
Hawrami said the contracts posed no conflict with Iraq's federal constitution. The Iraqi central government, however, is irate over the Kurdish contracts -- and the State Department isn't happy either. The Bush administration has been striving mightily over the past year to get a national petroleum law approved before international firms jump in.
In addition, a group of 60 Iraqi oil professionals signed a letter saying that the recent Kurdish contracts were a "dangerous step that has no legal or political standing whatsoever." Iraqi oil union leaders have also opposed the contracts.
An additional fear is that Kurdish unilateralism could set off an arms race of sorts by spurring other regions to abandon the effort to forge a national accord governing oil industry practices. Expecting other groups to stand down while the Kurds start reaping profits from the oil located in Kurdish controlled regions might be too much to ask. It could create a haphazard and chaotic framework of one-off deals and localized arrangements with highly specialized terms as other regions rush to get a piece of the action:
Several major international oil companies have been talking to Baghdad about resuming work in the same giant southern fields where they had worked when Saddam Hussein was in power. And the central government indicated to them that it might rely on Hussein-era oil laws or offer service contracts if the new petroleum legislation is delayed, according to Kamal Field Aldasri, an economic adviser to the Iraqi government.
That isn't stopping key Bush allies from putting their personal, pecuniary interests ahead of what is often touted as the most important foreign policy challenge of our era - by the President himself:
Some of the recent signing activity may have begun when Dallas-based Hunt Oil, whose chief executive Ray L. Hunt is a member of the President's Foreign Intelligence Advisory Board and a major contributor to Bush's campaigns, signed a contract in September. Smaller U.S. companies have followed suit.
The Hunt contract upset the State Department, which has been pressing Iraq to adopt a petroleum law that would delineate the division of authority between the central and regional governments.
If the various oil producing regions begin to pursue, in earnest, oil deals that cut the central government out of the loop, this will only exacerbate the devolution of power that has been abetted by the recent Sunni outreach efforts undertaken by General Petraeus. Once that process begins, forging a national oil law out of a patchwork of side deals with inconsistent terms and conflicting interests will be made all but impossible absent a widespread re-negotiation process that could meet stiff resistance from several quarters.
And where would that leave the aggrieved Sunni parties that inhabit the mostly oil-barren western region? It is highly unlikely that Sunni groups will be willing to continue their forbearance and tacit cooperation as Kurdish and Shiite groups begin to exploit oil resources independent of the Sunnis. These developments may also have wider-ranging implications:
According to one person at the meeting, the officials warned that some of the blocs being offered by the Kurdish government lay outside its territory and might extend into Turkey or Iran.