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Exxon deal stokes territorial disputes
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An Iraqi soldier (right) and a Kurdish peshmerga fighter, belonging to a combined security force along with U.S. troops, chat inside a military camp in Mosul on Sept. 21, 2010. (AHMAD AL-RUBAYE/AFP/Getty Images)
By Ben Van Heuvelen and Staff of Iraq Oil Report
Published December 22, 2011
BAGHDAD - ExxonMobil's contracts in disputed territories are aggravating a tense eight-year standoff between Arabs and Kurds, and the company risks seizure of its equipment and attacks on its personnel if it begins work, according to senior members of the Iraqi government, members of Parliament from across the political spectrum, and leaders from Mosul and Kirkuk.
Exxon signed production sharing contracts on Oct. 18 with the Kurdistan Regional Government (KRG) for six exploration blocks, three of which - Bashiqa, Al-Qush, and Qara Hanjeer - overlap contested internal boundaries.
"If any company brings equipment or machines or anything into these territories, we are going to seize them - legally, through the security forces that represent the central government," said Yahiyah Mahjoub, a member of the Ninewa provincial council's legal committee.
Mahjoub was part of a delegation from the Ninewa governorate that visited Baghdad on Dec. 10 to bring complaints directly to the government. The local leaders met with Deputy Prime Minister for Energy Hussain al-Shahristani, Oil Minister Abdul Karim Luaibi, and Minister of State for Provincial Affairs Turhan Abdullah, airing concerns that Exxon should not start working in disputed blocks until their status is formally resolved.
"If the Iraqi people... feel that ExxonMobil is party to the disintegration of the country, or undermining the authority of the Iraqi government," Shahristani said in an interview with Iraq Oil Report, "I wouldn't be surprised if there would be strong reaction from the population."
Mosul and Kirkuk are the two main cities in the swath of land claimed by both Arabs and Kurds. The territorial disputes are rooted in atrocities committed by Saddam Hussein's regime, which altered the demographics of key areas through campaigns of forced migration, intimidation, and murder.
Kurdish officials say any areas now under Kurdish administration, or with a majority-Kurd population, are part of the KRG. On this basis, Kurdistan's Minister of Natural Resources Ashti Hawrami maintains that all of Exxon's blocks are within the boundaries of the region.
"We are administering, we have elections, we have everything which is run from Kurdistan," Hawrami said. "It comes down to who is in charge of it."
The territorial struggle is especially intense because of the reservoirs of oil beneath the land. Oil sales bring in nearly all of the state's income, totaling more than $80 billion in 2011.
Overlapping conflicts
The KRG-Exxon deals add fuel to a number of related controversies - not only territorial disputes, but also conflicts over oil sector authority, federalism, and ethno-sectarian dominance.
Baghdad claims sole authority to sign oil and gas deals, and has condemned all of the KRG's 48 contracts, including its latest with Exxon, as illegal.
Exxon is currently developing the 8.7 billion barrel West Qurna 1 oil field in Basra, but it risks losing that deal - as well as a key water pipeline project and qualification for an upcoming bidding round for southern exploration blocks - now that it has run afoul of Baghdad.
Shahristani has maintained that diffusing oil sector authority could lead to the balkanization of the country, while Kurds have countered that decentralized power is a bulwark against oppression.
The Exxon-KRG deal has also been politically explosive because of its timing. The contract was signed just before the final withdrawal of U.S. military, which has played a key role diffusing tensions between security forces loyal to Arabs and Kurds.
Iraq's explosive identity politics have outlasted the American troop presence. As the last U.S. soldiers crossed the Kuwait border Sunday morning, the government was descending into a political crisis with sectarian undertones.
Prime Minister Nouri al-Maliki has called for the arrest of Vice President Tariq al-Hashimi on terrorism charges, and has banned Deputy Prime Minister Saleh al-Mutlaq from Cabinet meetings. Hashimi and Mutlaq are leading members of the Sunni-backed Iraqiya coalition, which has announced boycotts of both the Parliament and the Cabinet to protest what they call Maliki's abuses of power.
Iraq now appears to be heading towards a zero-sum political and constitutional showdown. Hashimi and Mutlaq have sought refuge in the Kurdistan region and Maliki is demanding Hashimi's extradition to the south.
Against this volatile backdrop, Exxon's new contracts with the KRG continue to raise controversial questions about not only the shape of Iraqi federalism but also the basic geography of the country.
The open wounds of history
During the previous regime, Saddam Hussein perpetrated policies of ethnic cleansing against Iraq's Kurdish and Turkomen minorities, forcing them to relocate from the oil-rich city of Kirkuk and other areas and chasing them from villages throughout the north using chemical weapons in the notorious Anfal campaign.
In the aftermath of this genocidal gerrymandering, and following the first Gulf War of 1991, the U.S. enforced a no-fly zone over Kurdistan, creating a nation without a state - stymied economically, but relatively safe from Saddam's tanks. In 2003, after the U.S.-led invasion, the Kurds continued their administrative control of the north, which remained largely insulated from the instability of the south.
Iraq's 2005 Constitution formally recognizes the Kurdistan region's territory to include the provinces of Dohuk, Erbil, and Sulymaniya, and it also acknowledges competing claims to parts of Ninewa, Kirkuk, Salahuddin, and Diyala provinces. Article 140 of the Constitution designates a process for resolving those territorial disputes.
The implementation of Article 140, however, has been beset by controversy and delays. Without formal resolution of the boundaries, the KRG has maintained control of areas beyond its universally recognized territory - providing services, government administration, and security.
The de facto boundary between Kurdistan and southern Iraq has been a flashpoint for tension and conflict. In the past, the Iraqi Army and Kurdish peshmerga forces have been arrayed in opposing formations along the contested border, which the International Crisis Group has called the "trigger line" because of its potential to erupt into violence.
At least twice since 2007, confrontations at the Kirkuk oil field's Khormala Dome formation have nearly erupted into violence. That structure is within Erbil province but the federal Oil Ministry sent teams to develop it. It has since reverted to KRG control.
The U.S. has played a mitigating role along the trigger line, conducting tripartite patrols with the Iraqi Army and the peshmerga and running joint coordination centers designed to help ensure that minor incidents and misunderstandings don't escalate into firefights.
Now that American forces have left Iraq, a few Americans remain inside a coordination center in Kirkuk in a diplomatic capacity; but for the first time in years, the U.S. troops are gone.
Threats to Exxon
Into the vacuum left by the U.S. military now steps the largest American company.
"When an oil company comes and puts its nose into such delicate internal affairs, it reminds people of the role of the oil companies in the '50s and '60s in the region," said Shahristani, referring to Iraq's domination by foreign companies before the country nationalized its oil sector. "I don't think that will serve at all to change the image of ExxonMobil, in particular, in the region."
The conflict over disputed territories has often focused on Kirkuk, home to Iraq's longest-producing oil field and a focal point of Saddam's Arabization campaigns. Exxon's new Qara Hanjeer block is just north of Kirkuk city.
The most controversial block, however, may be Bashiqa, which is just north of Mosul. In contrast to the Qara Hanjeer block, which is largely within the territory currently administered by the KRG, Bashiqa is populated by many non-Kurds and its status is more ambiguous.
"If [Exxon] start any activities in that area, I don't think the people of the Ninewa governorate will allow them to do so," Shahristani said.
Shahristani did not clarify whether the central government has agreed to use security forces to keep unauthorized companies from operating in disputed territories, but his suggestion that Exxon would meet resistance from locals resonated with militant statements from provincial leaders.
"If we are forced to, we are going to seize their equipment," Mahjoub said. "If we have to, we will form a security force from the sons of the people of Ninewa."
ExxonMobil has declined all requests for comment.
KRG leaders have also not spoken about the contracts' impact on territorial disputes. A spokesman for the KRG Ministry of Natural Resources did not respond to numerous requests to comment for this article.
Hawrami has not acknowledged that the territory in question is even contested.
"We don't have anything in disputed territories," Hawrami said. "We have everything contracted by Kurdistan, within Kurdistan."
Such statements are based on the assumption that if the long-delayed referendum were to be held, voters would choose to align with the semi-autonomous northern region.
Absolutist rhetoric exists on both sides of the debate and underscores the sensitivity of the issue. Wisal Saleem Ali, a parliamentarian from Mosul, said the blocks in Ninewa being claimed by Kurdistan clearly belong to the Arab south.
"These contracts are in the territories of Ninewa province," she said. "I don't want to call them 'disputed areas.' They were already decided after 2004, and they belong to Ninewa."
As one adviser to the Sunni-backed Iraqiya political block put it, "There are undisputed disputed territories and there are disputed disputed territories."
Changing the facts on the ground
The two sides disagree not only about the line between north and south but also about how to implement the mechanism designated in Article 140 to resolve the conflict.
Kurdish leaders have interpreted the article to mean that residents should essentially vote on their own territorial status; others, including UN and American diplomats, have suggested a negotiated solution by which stakeholders would compromise on boundaries and then submit that proposed solution for an up-or-down vote.
Yet the KRG's hard-line public stance might not reflect its internal strategic thinking. In private, Kurdish officials have reportedly acknowledged the possibility of a negotiated solution.
At a Jan. 12, 2010 meeting with U.S. officials, Kurdistan's senior member of Parliament Fuad Masoum "suggested, but did not say explicitly, that the way ahead on Kirkuk would entail a negotiated political agreement," according to U.S. Embassy Baghdad cable dated Feb. 5, 2010, which was published by Wikileaks.
Kurdish leaders have never openly endorsed this possibility partly because such an agreement would likely not result in the wholesale incorporation of Kirkuk into the KRG. Especially in light of Saddam's ruthless Arabization campaigns, Kurdish nationalists have said a compromise on Kirkuk would be an unacceptable capitulation to historical atrocities.
Yet, another leaked U.S. Embassy cable also suggests that Kurdish leaders have become more flexible on Kirkuk than their public rhetoric would suggest.
On Dec. 21, 2009, KRG Minister of Interior Karim Sinjari reportedly told Turkish Minister of Interior Besir Atalay and Turkish Ambassador to Iraq Murat Ozcelik that "the KRG understood that Kirkuk would not be attached to the Iraqi Kurdistan Region," according to a U.S. Embassy cable dated Jan. 24, 2010, reporting on conversations with the Turkish diplomats.
"Sinjari said it was understood in the KRG that 'some sort of compromise' on Kirkuk and implementation of Article 140 was necessary, and the Kurds were prepared to 'work on that,'" the cable said.
That position apparently reflected the thinking of the most senior Kurdish leadership.
"Ozcelik said he was 'certain' Sinjari, a close confidante of (KRG President Massoud) Barzani, would not comment directly on a subject as sensitive as Kirkuk unless he was accurately reflecting... Barzani's thinking," the cable said.
The evolution of Kurdistan's strategy appears to have coincided with increasing production of oil and gas from fields firmly inside KRG territory. With these new volumes, the super-giant Kirkuk oil field might have started to seem less critical as an economic life line for Kurdistan.
Kurdish leaders now seem to be approaching the issue with a hidden pragmatism, despite their doctrinaire public statements. Indeed, in a 2009 report, the International Crisis Group argued that the KRG was establishing de facto control over large swaths of territory in order to acquire leverage for an ultimate territorial bargain.
Such a strategy would help explain why Kurdistan signed Exxon to these three controversial blocks, said Joost Hiltermann of the International Crisis Group.
"The KRG has always seen the careful allotment of blocks as a strategic imperative," Hiltermann said. "Attracting companies from the U.S. and other countries... could help it both in protecting the Kurdistan region against future threat and in furthering its objective of incorporating major chunks of the disputed territories."
Exxon's most controversial blocks are farther into the disputed territories than any others the KRG has ventured to license.
"They managed to get the world's biggest oil company, work with them on political issues, without necessarily realizing it, but helping them with political negotiations with Baghdad and push their agenda," the Iraqiya adviser said about the KRG leadership. "Exxon now is a political issue between Erbil and Baghdad."
Yet, despite the educated conjecture about Kurdish thinking on the topic, the KRG's motivations ultimately remain unclear.
In general, the KRG has maintained that its oil development benefits all of Iraq because export revenues flow to the central government. But officials have declined to speak specifically about the impact of oil contracts on territorial disputes.
Dangerous territory
Since the signing of the Exxon contract, leaders in Baghdad and Erbil have opened back-channel discussions, according to a senior advisor to Maliki familiar with the talks.
Kurdish leaders have reportedly suggested that unresolved territorial status should not stop the Exxon contracts from going forward. If a negotiation or referendum ultimately decides that a certain area is outside of Kurdish control, they say, then the corresponding contracts could theoretically be transferred to a different government party.
Such a course would present at least one obvious difficulty, however: Exxon's presence makes the land more desirable.
"Does Exxon think it will be easier with the existence of oil in these areas?" Mahjoub said. "Finding oil in these areas will mean it takes longer to solve these problems."
Many non-Kurdish leaders from across the political spectrum have echoed this skepticism.
"Before, there was a dispute just over the land; now, it also becomes a dispute over wealth, over money - a dispute about land becomes a dispute about oil," said Abbas al-Bayati, a leading MP from Prime Minister Nouri al-Maliki's Dawa party, who represents Baghdad but is a native of Kirkuk.
It's an issue on which Maliki's allies and members of the rival Iraiqya block can agree. Wisal Saleem Ali, an Iraqiya MP from Mosul, characterized the KRG-Exxon deal as an affront to Iraqi nationalism.
"Signing these contracts, they don't just violate the territories of Mosul, or Ninewa province, or the people of Mosul, but they are violating the rights of people in all of Iraq," Ali said.
Hakim al-Zamali, a leading member of the Sadrist bloc in Parliament, wondered aloud if Exxon understood the volatility of the areas it was set to enter.
"It is a risky thing to do, to sign a deal in disputed areas," he said. "Maybe there will be fighting. What is the fate of the money they will spend on the project? The equipment they will put there?"
Mahjoub said that the Ninewa provincial council has established a "joint operation center" with the federal Oil Ministry, which will report violations and coordinate the government reaction if companies try to operate without Baghdad's permission.
"Of course it will be dangerous for (Exxon) to work there," said Mahjoub. "I'm telling you, we are not going to allow them to bring their equipment and put their machines to work in our territories, unless they get the approval from the central government."
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An Iraqi soldier (right) and a Kurdish peshmerga fighter, belonging to a combined security force along with U.S. troops, chat inside a military camp in Mosul on Sept. 21, 2010. (AHMAD AL-RUBAYE/AFP/Getty Images)
By Ben Van Heuvelen and Staff of Iraq Oil Report
Published December 22, 2011
BAGHDAD - ExxonMobil's contracts in disputed territories are aggravating a tense eight-year standoff between Arabs and Kurds, and the company risks seizure of its equipment and attacks on its personnel if it begins work, according to senior members of the Iraqi government, members of Parliament from across the political spectrum, and leaders from Mosul and Kirkuk.
Exxon signed production sharing contracts on Oct. 18 with the Kurdistan Regional Government (KRG) for six exploration blocks, three of which - Bashiqa, Al-Qush, and Qara Hanjeer - overlap contested internal boundaries.
"If any company brings equipment or machines or anything into these territories, we are going to seize them - legally, through the security forces that represent the central government," said Yahiyah Mahjoub, a member of the Ninewa provincial council's legal committee.
Mahjoub was part of a delegation from the Ninewa governorate that visited Baghdad on Dec. 10 to bring complaints directly to the government. The local leaders met with Deputy Prime Minister for Energy Hussain al-Shahristani, Oil Minister Abdul Karim Luaibi, and Minister of State for Provincial Affairs Turhan Abdullah, airing concerns that Exxon should not start working in disputed blocks until their status is formally resolved.
"If the Iraqi people... feel that ExxonMobil is party to the disintegration of the country, or undermining the authority of the Iraqi government," Shahristani said in an interview with Iraq Oil Report, "I wouldn't be surprised if there would be strong reaction from the population."
Mosul and Kirkuk are the two main cities in the swath of land claimed by both Arabs and Kurds. The territorial disputes are rooted in atrocities committed by Saddam Hussein's regime, which altered the demographics of key areas through campaigns of forced migration, intimidation, and murder.
Kurdish officials say any areas now under Kurdish administration, or with a majority-Kurd population, are part of the KRG. On this basis, Kurdistan's Minister of Natural Resources Ashti Hawrami maintains that all of Exxon's blocks are within the boundaries of the region.
"We are administering, we have elections, we have everything which is run from Kurdistan," Hawrami said. "It comes down to who is in charge of it."
The territorial struggle is especially intense because of the reservoirs of oil beneath the land. Oil sales bring in nearly all of the state's income, totaling more than $80 billion in 2011.
Overlapping conflicts
The KRG-Exxon deals add fuel to a number of related controversies - not only territorial disputes, but also conflicts over oil sector authority, federalism, and ethno-sectarian dominance.
Baghdad claims sole authority to sign oil and gas deals, and has condemned all of the KRG's 48 contracts, including its latest with Exxon, as illegal.
Exxon is currently developing the 8.7 billion barrel West Qurna 1 oil field in Basra, but it risks losing that deal - as well as a key water pipeline project and qualification for an upcoming bidding round for southern exploration blocks - now that it has run afoul of Baghdad.
Shahristani has maintained that diffusing oil sector authority could lead to the balkanization of the country, while Kurds have countered that decentralized power is a bulwark against oppression.
The Exxon-KRG deal has also been politically explosive because of its timing. The contract was signed just before the final withdrawal of U.S. military, which has played a key role diffusing tensions between security forces loyal to Arabs and Kurds.
Iraq's explosive identity politics have outlasted the American troop presence. As the last U.S. soldiers crossed the Kuwait border Sunday morning, the government was descending into a political crisis with sectarian undertones.
Prime Minister Nouri al-Maliki has called for the arrest of Vice President Tariq al-Hashimi on terrorism charges, and has banned Deputy Prime Minister Saleh al-Mutlaq from Cabinet meetings. Hashimi and Mutlaq are leading members of the Sunni-backed Iraqiya coalition, which has announced boycotts of both the Parliament and the Cabinet to protest what they call Maliki's abuses of power.
Iraq now appears to be heading towards a zero-sum political and constitutional showdown. Hashimi and Mutlaq have sought refuge in the Kurdistan region and Maliki is demanding Hashimi's extradition to the south.
Against this volatile backdrop, Exxon's new contracts with the KRG continue to raise controversial questions about not only the shape of Iraqi federalism but also the basic geography of the country.
The open wounds of history
During the previous regime, Saddam Hussein perpetrated policies of ethnic cleansing against Iraq's Kurdish and Turkomen minorities, forcing them to relocate from the oil-rich city of Kirkuk and other areas and chasing them from villages throughout the north using chemical weapons in the notorious Anfal campaign.
In the aftermath of this genocidal gerrymandering, and following the first Gulf War of 1991, the U.S. enforced a no-fly zone over Kurdistan, creating a nation without a state - stymied economically, but relatively safe from Saddam's tanks. In 2003, after the U.S.-led invasion, the Kurds continued their administrative control of the north, which remained largely insulated from the instability of the south.
Iraq's 2005 Constitution formally recognizes the Kurdistan region's territory to include the provinces of Dohuk, Erbil, and Sulymaniya, and it also acknowledges competing claims to parts of Ninewa, Kirkuk, Salahuddin, and Diyala provinces. Article 140 of the Constitution designates a process for resolving those territorial disputes.
The implementation of Article 140, however, has been beset by controversy and delays. Without formal resolution of the boundaries, the KRG has maintained control of areas beyond its universally recognized territory - providing services, government administration, and security.
The de facto boundary between Kurdistan and southern Iraq has been a flashpoint for tension and conflict. In the past, the Iraqi Army and Kurdish peshmerga forces have been arrayed in opposing formations along the contested border, which the International Crisis Group has called the "trigger line" because of its potential to erupt into violence.
At least twice since 2007, confrontations at the Kirkuk oil field's Khormala Dome formation have nearly erupted into violence. That structure is within Erbil province but the federal Oil Ministry sent teams to develop it. It has since reverted to KRG control.
The U.S. has played a mitigating role along the trigger line, conducting tripartite patrols with the Iraqi Army and the peshmerga and running joint coordination centers designed to help ensure that minor incidents and misunderstandings don't escalate into firefights.
Now that American forces have left Iraq, a few Americans remain inside a coordination center in Kirkuk in a diplomatic capacity; but for the first time in years, the U.S. troops are gone.
Threats to Exxon
Into the vacuum left by the U.S. military now steps the largest American company.
"When an oil company comes and puts its nose into such delicate internal affairs, it reminds people of the role of the oil companies in the '50s and '60s in the region," said Shahristani, referring to Iraq's domination by foreign companies before the country nationalized its oil sector. "I don't think that will serve at all to change the image of ExxonMobil, in particular, in the region."
The conflict over disputed territories has often focused on Kirkuk, home to Iraq's longest-producing oil field and a focal point of Saddam's Arabization campaigns. Exxon's new Qara Hanjeer block is just north of Kirkuk city.
The most controversial block, however, may be Bashiqa, which is just north of Mosul. In contrast to the Qara Hanjeer block, which is largely within the territory currently administered by the KRG, Bashiqa is populated by many non-Kurds and its status is more ambiguous.
"If [Exxon] start any activities in that area, I don't think the people of the Ninewa governorate will allow them to do so," Shahristani said.
Shahristani did not clarify whether the central government has agreed to use security forces to keep unauthorized companies from operating in disputed territories, but his suggestion that Exxon would meet resistance from locals resonated with militant statements from provincial leaders.
"If we are forced to, we are going to seize their equipment," Mahjoub said. "If we have to, we will form a security force from the sons of the people of Ninewa."
ExxonMobil has declined all requests for comment.
KRG leaders have also not spoken about the contracts' impact on territorial disputes. A spokesman for the KRG Ministry of Natural Resources did not respond to numerous requests to comment for this article.
Hawrami has not acknowledged that the territory in question is even contested.
"We don't have anything in disputed territories," Hawrami said. "We have everything contracted by Kurdistan, within Kurdistan."
Such statements are based on the assumption that if the long-delayed referendum were to be held, voters would choose to align with the semi-autonomous northern region.
Absolutist rhetoric exists on both sides of the debate and underscores the sensitivity of the issue. Wisal Saleem Ali, a parliamentarian from Mosul, said the blocks in Ninewa being claimed by Kurdistan clearly belong to the Arab south.
"These contracts are in the territories of Ninewa province," she said. "I don't want to call them 'disputed areas.' They were already decided after 2004, and they belong to Ninewa."
As one adviser to the Sunni-backed Iraqiya political block put it, "There are undisputed disputed territories and there are disputed disputed territories."
Changing the facts on the ground
The two sides disagree not only about the line between north and south but also about how to implement the mechanism designated in Article 140 to resolve the conflict.
Kurdish leaders have interpreted the article to mean that residents should essentially vote on their own territorial status; others, including UN and American diplomats, have suggested a negotiated solution by which stakeholders would compromise on boundaries and then submit that proposed solution for an up-or-down vote.
Yet the KRG's hard-line public stance might not reflect its internal strategic thinking. In private, Kurdish officials have reportedly acknowledged the possibility of a negotiated solution.
At a Jan. 12, 2010 meeting with U.S. officials, Kurdistan's senior member of Parliament Fuad Masoum "suggested, but did not say explicitly, that the way ahead on Kirkuk would entail a negotiated political agreement," according to U.S. Embassy Baghdad cable dated Feb. 5, 2010, which was published by Wikileaks.
Kurdish leaders have never openly endorsed this possibility partly because such an agreement would likely not result in the wholesale incorporation of Kirkuk into the KRG. Especially in light of Saddam's ruthless Arabization campaigns, Kurdish nationalists have said a compromise on Kirkuk would be an unacceptable capitulation to historical atrocities.
Yet, another leaked U.S. Embassy cable also suggests that Kurdish leaders have become more flexible on Kirkuk than their public rhetoric would suggest.
On Dec. 21, 2009, KRG Minister of Interior Karim Sinjari reportedly told Turkish Minister of Interior Besir Atalay and Turkish Ambassador to Iraq Murat Ozcelik that "the KRG understood that Kirkuk would not be attached to the Iraqi Kurdistan Region," according to a U.S. Embassy cable dated Jan. 24, 2010, reporting on conversations with the Turkish diplomats.
"Sinjari said it was understood in the KRG that 'some sort of compromise' on Kirkuk and implementation of Article 140 was necessary, and the Kurds were prepared to 'work on that,'" the cable said.
That position apparently reflected the thinking of the most senior Kurdish leadership.
"Ozcelik said he was 'certain' Sinjari, a close confidante of (KRG President Massoud) Barzani, would not comment directly on a subject as sensitive as Kirkuk unless he was accurately reflecting... Barzani's thinking," the cable said.
The evolution of Kurdistan's strategy appears to have coincided with increasing production of oil and gas from fields firmly inside KRG territory. With these new volumes, the super-giant Kirkuk oil field might have started to seem less critical as an economic life line for Kurdistan.
Kurdish leaders now seem to be approaching the issue with a hidden pragmatism, despite their doctrinaire public statements. Indeed, in a 2009 report, the International Crisis Group argued that the KRG was establishing de facto control over large swaths of territory in order to acquire leverage for an ultimate territorial bargain.
Such a strategy would help explain why Kurdistan signed Exxon to these three controversial blocks, said Joost Hiltermann of the International Crisis Group.
"The KRG has always seen the careful allotment of blocks as a strategic imperative," Hiltermann said. "Attracting companies from the U.S. and other countries... could help it both in protecting the Kurdistan region against future threat and in furthering its objective of incorporating major chunks of the disputed territories."
Exxon's most controversial blocks are farther into the disputed territories than any others the KRG has ventured to license.
"They managed to get the world's biggest oil company, work with them on political issues, without necessarily realizing it, but helping them with political negotiations with Baghdad and push their agenda," the Iraqiya adviser said about the KRG leadership. "Exxon now is a political issue between Erbil and Baghdad."
Yet, despite the educated conjecture about Kurdish thinking on the topic, the KRG's motivations ultimately remain unclear.
In general, the KRG has maintained that its oil development benefits all of Iraq because export revenues flow to the central government. But officials have declined to speak specifically about the impact of oil contracts on territorial disputes.
Dangerous territory
Since the signing of the Exxon contract, leaders in Baghdad and Erbil have opened back-channel discussions, according to a senior advisor to Maliki familiar with the talks.
Kurdish leaders have reportedly suggested that unresolved territorial status should not stop the Exxon contracts from going forward. If a negotiation or referendum ultimately decides that a certain area is outside of Kurdish control, they say, then the corresponding contracts could theoretically be transferred to a different government party.
Such a course would present at least one obvious difficulty, however: Exxon's presence makes the land more desirable.
"Does Exxon think it will be easier with the existence of oil in these areas?" Mahjoub said. "Finding oil in these areas will mean it takes longer to solve these problems."
Many non-Kurdish leaders from across the political spectrum have echoed this skepticism.
"Before, there was a dispute just over the land; now, it also becomes a dispute over wealth, over money - a dispute about land becomes a dispute about oil," said Abbas al-Bayati, a leading MP from Prime Minister Nouri al-Maliki's Dawa party, who represents Baghdad but is a native of Kirkuk.
It's an issue on which Maliki's allies and members of the rival Iraiqya block can agree. Wisal Saleem Ali, an Iraqiya MP from Mosul, characterized the KRG-Exxon deal as an affront to Iraqi nationalism.
"Signing these contracts, they don't just violate the territories of Mosul, or Ninewa province, or the people of Mosul, but they are violating the rights of people in all of Iraq," Ali said.
Hakim al-Zamali, a leading member of the Sadrist bloc in Parliament, wondered aloud if Exxon understood the volatility of the areas it was set to enter.
"It is a risky thing to do, to sign a deal in disputed areas," he said. "Maybe there will be fighting. What is the fate of the money they will spend on the project? The equipment they will put there?"
Mahjoub said that the Ninewa provincial council has established a "joint operation center" with the federal Oil Ministry, which will report violations and coordinate the government reaction if companies try to operate without Baghdad's permission.
"Of course it will be dangerous for (Exxon) to work there," said Mahjoub. "I'm telling you, we are not going to allow them to bring their equipment and put their machines to work in our territories, unless they get the approval from the central government."
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