Kurdistan 'Hunts' for Oil: The Kurds Make Their Own Rules

The Kurdistan Regional Government (KRG) recently passed their own benchmark
oil revenue sharing legislation, separate from Baghdad, and has just signed
their first oil production sharing contract with an outside company:

Texas' Hunt Oil Co. and Kurdistan's regional government said Saturday they've signed a production-sharing contract for petroleum exploration in northern Iraq, the first such deal since the Kurds passed their own oil and gas law in August. Link.

According to this press release issued by the KRG, the Hunt Oil Company, working with Impulse Energy Corporation, will start with a geological survey of seismic activity in the Duhok area of Kurdistan, followed by the first exploration well in 2008:

The Kurdistan Regional Government (KRG) together with Hunt Oil Company of the Kurdistan Region, a subsidiary of Hunt Oil Company of Dallas, Texas, and Impulse Energy Corporation (IEC) announced today that they have signed a Production Sharing Contract (PSC) covering petroleum exploration activities in the Duhok area of the Kurdistan Region.

The specifics of the deal were not released, but the existence of the deal, a result of the Kurdish Regional Government's own legislation on oil revenue sharing, is bound to make Baghdad take notice after the KRG spoke out against the al-Maliki government's draft legislation of an oil law in July, 2007. It was this rift that led the KRG to pass their own legislation in August, 2007, legislation now seemingly legitimized by Hunt Oil's Production Sharing Agreement with the KRG.

Which leads to questions about the Bush Administration's involvement in the deal, given that Ray L. Hunt, the head of Hunt Oil (and one of President Bush's guests to the May, 2007 State Dinner for Queen Elizabeth II), was appointed to a two two-year terms on President Bush's Foreign Intelligence Advisory Board, first on October 5, 2001 and again on October 27, 2005 - a board which, according to this webpage, is:

Unique within the government, the PFIAB traditionally has been tasked with providing the President with an independent source of advice on the effectiveness with which the intelligence community is meeting the nation's intelligence needs and the vigor and insight with which the community plans for the future.

Established by Eisenhower in 1956, the PFIAB was formed "as a nonpartisan body offering the President objective, expert advice on the conduct of U.S. foreign intelligence." The question then becomes, considering the known oil affiliations within the current administration, how objective is that advice and how is information from the board being utilized by its membership?

This is not to say that Hunt Oil itself is an illogical choice for the Kurdish Regional Government in their oil exploration effort. Hunt Oil has been successful in finding oil for regional governments, as evidenced by their similar partnership with Yemen at a time when the rest of the world had assumed that oil had bypassed that country:

In 1981, Hunt Oil Company signed a production sharing agreement with the government of Yemen and began operations. The only active oil company in the region, Hunt discovered a major oil field in 1984. The company subsequently constructed a 423-kilometer (263-mile) pipeline across harsh mountains to the Red Sea, and Yemen joined the ranks of oil exporting countries reaching production levels in excess of 150,000 barrels per day. Large reserves of natural gas, estimated at 10 trillion cubic feet, have also been discovered.

General David Petraeus has described the situation in Iraq, during his testimony before Congress last week, as an "ethno-sectarian competition for power and resources." He went on to add, during further interviews, that "you can't win if you don't play." But what is the game? If the surge's purported effort is to buy time for Baghdad to come to a political reconciliation, why has one of Bush's closest allies, the Hunt Oil Company, gone north to Kurdistan instead of waiting for Baghdad to finalize their own oil revenue sharing law (one of those unmet benchmarks)?

Which leads to the question: What is the newly near-independent Kurdistan's role in the region as General Petraeus' "hard lessons" of Iraq unfold? Are they trying their best to survive amidst chaos? Are they securing their alliance with the United States through cooperation with Bush Administration's corporate allies? Are they turning to an experienced bidder within the oil exploration industry? Are the Kurds hedging against a potential conflict with Turkey, given the presence of the outlawed Turkish Kurdish PKK's bases on their side of the border, by securing their position as a US ally, since Turkey is a US ally, as well? Are they looking to strengthen their ties to the US as Op-Ed reports/rumors of possible conflict between the Iranian Government and their Kurds, which is on their eastern border, begin to surface, as well?

Another question: Does this mean that Hunt Oil, Impulse Energy and the other Bush Administration affiliated corporations, as it becomes clear that whatever happens with the ongoing 'surge', the Iraqi situation outside of Kurdistan - the resolution of which will require the inclusion of the Sunni factions in the central government and the end of untold amounts of blood feuds that have been initiated by the factional fighting and extreme loss of life -- is not likely to be settled until well after the Bush Administration is voted out of office and, as such, they are cutting their own deals to secure the oil contracts in the one part of Iraq that is not waiting for a central government to resolve their problems?

This is not to imply that the Kurdish Regional Government's initiative in passing their own oil revenue sharing law was meant to undermine the central government. The Kurds reside in a landlocked region of northern Iraq surrounded by potential enemies and a large population of Kurds that are minorities within those outside governments (Turkey, Iran, Syria). The pressures on the Kurdish Regional Government is likely enormous within the chessboard/hornet's nest that Iraq has become and their decision to make the Hunt Oil deal while a Bush Administration friendly to them was still in power, along with the possibility that the entire deal was done with, if not the Bush Administration's blessing, at least their foreknowledge, may have been the only course available to them.

Whether the deal will motivate Baghdad to finalize their own oil and gas revenue sharing law and/or influence world business to see the al-Maliki government as less legitimate is unknown. What is known: The Kurds have provided an opportunity for corporate oil to join the 'competition for power and resources' by passing their own revenue sharing law and Texas' Hunt Oil will now be hunting for Iraqi Kurdistan's oil in a deal modeled after their own agreement that lead to the establishment of Yemen's oil and gas industry.

Here's a link to the KRG press release.

To the text of the KRG Oil and Gas Law.

To the Washington Post article on the Hunt/KRG contract.

For those with NYT access, Paul Krugman's take on the deal.

And more about the Kurds.

Comments

[Joeseo]

Good point including Patraeus' view of active participation. Thanks for the analysis. It covers many pertinent factors. I wish the role of Saudi Arabia was included, but I am betting no data or information from Aramco is attainable.

Our lads in Texas should begin cloaking themselves in shawls and sandals.

[amberglow]

We're only there to keep everything unstable and to protect Oil Company interests at this point. If the Iraqi Govt ever really did get their act together, deals like the Hunt thing wouldn't happen. Bush is ensuring it doesn't happen.

They're using our military as private security guards for Oil and US Oil Companies, and we're paying for it multiple times--and in lives and in future danger. We're there til there's no more oil.

Even Greenspan is telling the world is was for oil.

[MatoSka]

Ms. Ritz has chosen to focus on the action of the KRG in regards to the deal with a private corporation. The KRG release on the agreement has stated that it is consistent with the Iraqi Constitution and therefore totally within their power to do so. What she has NOT written about is the attempts to delay the Kirkuk Referndum by various political forces in the region, both within Iraq and outside of it. This referendum was established in Article 140 of the Iraqi Constitution. What she has not mentioned is the violation of the Kurdistan Autonomous Region's territory by Turkey and Iran. What she has not addressed is the US and Turkey armed forces operating covertly to assassinate PKK leaders currently residing in southern Kurdistan. What she has not addressed is the legal entitlements of the Kurdish nation for reparations and restoration of the Kurdish forced displacements from Kirkuk, the Anfal Campaign's mass murders and the Halabja gassing by the regime of Saddam Hussein.
It seems she is more focused on oil companies then she is on the welfare of the Kurdish peoples.

[oldpotsmuggler]

The CIA has a long involvement in the oil industry. This was made possible by the fact that the U.S. really created modern oil exploration and production from scratch. The rotary drill bit still used around the world was invented by the father of Howard Hughes. The connections between Hughes and the CIA are well documented, and were based on the fact that every oil discovery of any significance anyweher on earth was made with a Hughes bit leading the way.

For the Kurds to come to the U.S. to develop their oil, then, makes sense on two possible levels. To this day, no one does oil as well as we do, and it may go no deeper than that. On the other hand the territorial designs of the Kurds have never been kept secret, and they would cut any sweetheart oil deal in the world if the quid pro quo was seen as helping to lead to the development of the nation of Greater Kurdistan.

And that's weher it gets fun. Turkey has promised to never let that happen, and appears to be able to be taken at its word on this. Also, Turkey is a member of NATO, and if the Kurds intrude on Turkish soil the NATO Treaty requires all signatories, in cluding the U.S., to come to their aid.

Could anybody but BUSHCO have let the lure of oil wealth blind them to the point where we end up fighting ourselves in some god forsaken place in the Middle East?

[bethinCary]

How ironic since just a few weeks ago news of Al Maliki had made a deal with Iran to build a proposed pipeline between them. How ironic that Hunt Oil-also the man who dedicated 38 million dollars to GW's Library and helped get it established at Southwestern (whatever the college name is).

[Podewumun]

Oh, where is the rightwingnut rabble when the truth comes out...?

[Podewumun]

IRONIC?

Try FELONIOUS!

[RobertPaul]

I think this could be good news!

The Kurds are acting in rational self interest.

They know that the only way for them to survive is to be "needed" by the central government in Iraq.

By providing their own resources they hope to became a "state" within the new (if EVER formed) country.

They know that eventually they will need the backing of a central military force to keep the Iranians and Turks on the right side of the border.

This will also allow them to become an "Israel" model for displaced Kurds to return to their "homeland" from Syria, Turkey, et al.

Now it depends on the Maliki gov't. to see the example and form a federation of Iraqi states.

It's a start. It just depends on how they go from here.

[freespeach]

Divide and conquer.

It has worked all over the world for thousands of years as a military/political tactic.

It is why we needed to destroy Iraq before we could "secure" the oil.
Many who favor partitioning of Iraq in the name of peace know full well that screwing them out of their oil is easier with three fighting factions, refugees, fear and confusion in the streets.

This deal for the Kurds will help bring Shia and Sunni back to the table.
As for Kurds getting all nationalistic and doing terrorism in Turkey and Iran.....not America's fault, we know nothing.

More greed, more American meddling and eventually more violence. We are an evil presence in the middle east.

We need to impeach Cheney and Bush. Democrats are down with the theft of the oil, they are just more sneaky about it than repukes.

Consider this option.

http://www.gp.org/

Peace.