Exxon Moving into Seriously Disputed Territory: The Case of Bashiqa

More details continue to emerge about the recent deals cut by Exxon Mobil with the Kurdistan Regional Government.

A key point in this respect is newly-emerged information that at least two of the six exploration blocks are in so-called “disputed territories” that are formally part of the Nineveh governorate but since 2003 have been administered by the Kurds who occupied these areas at the beginning of the war. This includes both the Qush and Bashiqa blocks. 

In itself, this move by international oil companies into “disputed territory” is not entirely unprecedented in Iraq. Other companies including Hunt Oil and Gulf Keystone have previously concluded deals for blocks in disputed territory in Nineveh.

Once again, it is to some extent of course Exxon’s stature as a “Big Oil” company – and over above that as “American Big Oil” – that is particularly significant as far as the new disputed-territory dimension is concerned. It is noteworthy in this respect that previous attempts by the central government in Baghdad to auction off service contracts in disputed territories in Kirkuk failed, both in the first and second licensing rounds in 2009.

But there is a particular dimension to the Exxon contract for Bashiqa. It is commonly assumed that pro-Kurdish areas of the Nineveh governorate like Shaykhan and even Tall Kayf (where Qush is situated) may eventually gravitate towards the Kurdistan Regional Government when final status negotiations get going – to some extent as the result of pro-Kurdish feeling among Yazidis and Christian minorities there. However, in Bashiqa the situation is far from clear. A good study on the disputed territories by Sean Kane of USIP uses elections data at the district level to highlight Bashiqa as an area of Nineveh where Kurdish claims are not particularly popular among the local electorate. Additionally, to the extent that there is a pro-Kurdish tendency among parts of the population, much of it is actually Christian. As such, it is torn between the idea of joining the KRG and the alternate (and constitutionally dubious) scheme of a Christian-dominated sub-governorate administrative unit in the Nineveh plains. It is not unlikely that Bashiqa and its oil will end up remaining outside the final KRG borders and hence outside Kurdish jurisdiction.

In other words, in Bashiqa, Exxon is not only going into “disputed territory” but is becoming involved in a particularly disputed area. By so doing, Exxon is positioning itself in direct opposition to the longstanding official US government policy of trying to build trust and détente in these areas through so-called “joint patrols” with Kurdish and central-government participation. Additionally, this particular move may prove to be yet another thorn in the relationship between Kurds and Sunni Arabs: The Nujayfi family of Mosul and its two leading brothers (Usama, the parliament speaker, and Athil, the governor of Nineveh) have been personally involved in the quest to keep Bashiqa as part of Nineveh. This could in turn have a negative impact on recent tendencies of rapprochement between Sunni Arabs and Kurds as the result of growing interest in federalism among Sunnis, especially in Salahaddin.

In sum, one cannot help wonder whether Exxon may have been lured into a trap by including such a contentious and risky piece of real estate as Bashiqa in its recent bouquet of exploration blocks. There is now the impression that Exxon has wedded itself to a policy of Kurdish maximalism from which there can be no easy or partial retreat.

The Kurds may well have tried to sell the whole Exxon package as an “all or nothing” deal. As such, it is looking singularly successful.