Maliki’s Kurdish Dilemma

A world without Usama al-Nujayfi, Ayyad Allawi, Ammar al-Hakim and Mutqada al-Sadr. Surely that must be one of the most pleasant dreams that could happen in the head of Iraq’s prime minister, Nuri al-Maliki these days?

In fact, given political developments during the weeks since the announcement of the uncertified election result, Maliki has quite good chances for such a dream to become reality. Crucially, though, that dream would have to include a personality Maliki probably would have preferred to shut out along with the others: Masud Barzani, the president of the Kurdish federal region.

What has happened is as follows. In the uncertified election result there were 92 straightforward State of Law winners and another 3 State of Law affiliated people running on various pan-Shia lists in the Shiite-minority provinces in the north. Subsequently, Maliki has been formally joined by smaller Shiite parties such as Solidarity in Iraq (1 seat in Dhi Qar), the Just State (1 seat), Professionals and Masses (2 seats), Loyalty to Iraq (2 seats in Najaf). Additionally, support for Maliki from the Sadiqun movement affiliated with Asaeb Ahl al-Haqq (1 seat) is a foregone conclusion since probably no one else wants to have anything to do with that controversial movement.

That’s 102 seats. For their part, the combined parliamentary strength of the Kurds is mostly assessed to be above 60 seats, certainly if pro-Kurdish minority representatives from the north are included. Accordingly, Maliki and the Kurds are now so close to securing the absolute majority needed to seat a new government (165 seats) that it would be very easy for them to secure a few extra MPs without having to involve any other big bloc. Also, by virtue of their relatively disciplined parliamentary contingent, the Kurds are probably in a better position to deliver actual votes to Maliki in parliament than any combination of smaller Arab-dominated parties would be able to. All of this is different from 2010, when State of Law plus the Kurds would have fallen short of 163 votes, the absolute-majority mark in the 325-member parliament back then.

This scenario offers a potential negotiation dynamic that is very different from the outcomes that have dominated the discussion thus far –  i.e. a political majority government of pro-Maliki centralists against decentralizers among the Kurds, ISCI and Nujayfi; or a quasi political-majority government of Maliki and at least one of the big parties (Nujayfi, Allawi, Hakim, Sadr) that would be prepared to join him bilaterally in opposition to the others; or an anti-Maliki coalition along the lines that challenged him in the first part of 2012; or a decision on the next PM inside a reconstituted grand Shiite alliance, perhaps followed by another oversized partnership government.

Nonetheless, despite all the talk about these scenarios (and perhaps a revived Shiite alliance in particular), the only thing that has actually happened on the ground since the election result was announced  is that State of Law has continued to grow steadily, attracting also some parties with more secular leanings that wouldn’t fit particularly well in the Shiite Islamist National Alliance at all. Indeed, it is likely that such smaller parties on the Sunni side could also be subsumed by the State of Law alliance.  It is noteworthy that despite the strong regional tensions, parties favouring dialogue with Maliki instead of maximizing the sectarian conflict won multiple seats in key Sunni governorates such as Anbar. Indeed, it could be argued that the vote for the smaller pro-sahwa lists and the secular Iraq coalition in Anbar – altogether 130,000 votes and 6 seats – was a vote in favour of rapprochement with Maliki. If movements like these get included in the next Iraqi government, the contention frequently seen in Western media to the effect that “Iraqi Sunnis lost the elections” would lose even more of its limited relevance. True, the option of Maliki’s enemies forming some kind of grand coalition against him still exists, but with Maliki’s recent growth they are running out of time: Once Maliki reaches around 125 deputies, it will be near mathematically impossible for his adversaries to form a bigger parliamentary bloc without the Kurds. With trends like these, the chances of Maliki acting bi-laterally instead of multi-laterally in the government formation process certainly go up.

Of course, the Kurds will not sign up to a a third Maliki premiership just for the sake of forming a slimmer government. Like in 2010, they will have specific demands, including the general relationship between Baghdad and the Kurdistan federal region, oil policy issues, payment for Kurdish armed forces as well as disputed areas.

There are key differences from 2010, though. Firstly, the Kurdish demands have grown more radical. No longer are questions about the validity of contracts of foreign oil companies most prominent on the agenda. The Kurds have recently opened up separate pipelines to Turkey and want Baghdad to approve this move without any interference. Second, the Kurds have already seen what happened with lofty promises in the Erbil agreement of 2010, which largely remains unimplemented. Surely they will fashion their demands to Maliki in ways that can prevent a repeat of that disappointment this time.

In practice, it will not be too difficult for Maliki to reverse much of his anti-Kurdish political majority rhetoric if he instead can form the new government on the basis of some kind of landmark agreement with the Kurds that can lead to satisfaction on both sides. The problem though, given the increasingly radical nature of the Kurdish demands, is to find concessions that are in the spirit of the Iraqi constitution of 2005 as a union between Iraqis, rather than practical guidelines for the implementation of a divorce.

Some such potential concessions within the framework of a federal state still exist. Firstly, there are things Maliki could offer on disputed internal boundaries that would involve one-off concessions to the Kurds in some of the less disputed of the disputed territories in the north, though without Kirkuk and a comprehensive article 140 settlement (which is likely to take many years to be implemented even under the rosiest of circumstances). Second, there is the recurrent issue of payment for the Kurdish security forces. Since these forces also serve in domestic and internal roles, their payment over the federal budget is not particularly logical. Still, if such an arrangement can serve as glue in the Iraqi federation, it is far better than deals that would remove the oil sector entirely from Baghdad’s sphere, effectively making Kurdistan an independent country but without a suitable legal and constitutional framework. Thirdly, there are the oil contracts with foreign companies operating in Kurdistan, which Baghdad have yet to formally approve. It could be argued that one-off approval of these contracts could be a suitable concession if an appropriate framework for cooperation for future foreign contracts could be established as part of the compromise.

All of the above are compromises that would retain the essence of the Iraqi constitution of 2005 and would be sellable also to Maliki’s domestic audience (which should not be forgotten after they gave him more than 700,000 personal votes). Above all, though, if Maliki and the Kurds want to cut a separate deal, it is important that both sides exercise realism in order that another Erbil paper tiger, and the concomitant dysfunctional government it produced, can be avoided.

The Iraqi Parliament Completes the First Reading of the 2014 Annual Budget

In a significant move, the Iraqi parliament has completed the first passage of the 2014 annual budget despite boycotts by the Kurds and the Mutahhidun bloc loyal to the parliament speaker, Usama al-Nujayfi.

The sheer arithmetic behind the successful quorum at Sunday’s session speaks volumes about shifting political winds in Iraq ahead of the 30 April parliament elections. In order to go ahead with the first reading, 163 MPs needed to be present to reach the legal minimum requirement for taking parliamentary action. According to the official parliament record, 164 deputies attended. In the context of boycotts by Kurds and Mutahhidun alike, this is a remarkable achievement. It means, firstly, that the Shia bloc in parliament is exhibiting internal discipline at a level not seen since 2005. Altogether the three main Shiite factions – State of Law, Muwatin and the Sadrists – command around 161 deputy votes. The numbers suggest that despite internal turmoil among the Sadrists (or because of it?) a majority of these deputies will have been present during the budget reading. Whereas previous occasions involving Kurdish opposition to Maliki have seen widespread ISCI solidarity with the Kurds, no such major Shiite challenge to Maliki appears to have materialized this time around. But beyond this, importantly, there must have been some MPs from the Sunni and secular camps attending as well. The numbers don’t lie: even on a good day, there are no more than aroundd 160 Shiite Islamist MPs, and most of the handful of minority MPs from small non-Muslim groups and ethnic micro-minorities are loyal to the Kurds. Accordingly, in the context of continued criticism of PM Maliki by Iraqiyya leader Ayyad Allawi, it makes sense to assume that at least some of the breakaway elements of Iraqiyya that materialized in 2012 were present to secure the necessary quorum.

Substantially speaking, the conflict involves primarily Kurdish opposition to proposed measures of control regarding oil export from the Kurdish areas. For their part, the Sunni Mutahiddun appear to be boycotting more out of personal opposition to Maliki than a coherent anti-centralism agenda (although the tendency in the latter direction is more pronounced today than it was a couple of years ago). It is interesting that Maliki is using the issue of the budget and the question of Kurdish oil exports to mobilize popular opinion ahead of the elections. This is unprecedented: In 2010, neither the question of Kirkuk nor the budget tension was brought to the fore in a big way. At the same time, when seen within the context of the election campaign more generally, this is Shia chauvinism within a shell of Iraqi nationalism, quite different, for example, from the 22 July movement of 2008 focused on representation issues in the Kirkuk provincial council. Alongside assertiveness on the part of the central government in oil issues comes new governorate proposals clearly speaking to Shia Turkmen minorities, as well as the cabinet’s recent passage of retrograde Shia personal status law that would enable underage marriage – an apparent concession by Maliki to hardliners in the Fadila party ahead of the elections.

Still, this is only the first reading of the budget. Parliament speaker Nujayfi will be able to stage filibuster-like obstacles to delay the second reading and the decisive vote. It is however noteworthy that Nujayfi himself chose to be present and chair the budget first reading on Sunday, quite despite his own bloc’s boycott.

Three further parliament meetings are scheduled for this week. For now, the second budget reading is not on the agenda.

The Syrian Crisis and Its Repercussions for Erbil-Baghdad Relations

One of the interesting aspects of the crisis in Syria is the way Syria’s Kurds are navigating between regional power brokers in Turkey, Iraqi Kurdistan and Iraq. In particular, there seems to be a degree of tension surrounding the relationship between the largely pro-Turkish regional government of the Iraqi Kurds and Syrian Kurds who are seeking the support of Erbil but are not necessarily quite so supportive of Turkey.

So far, no decisive policy seems to have emerged among Syria’s Kurds in this respect. As for the spillover impact on the Iraqi scene, the Syrian crisis has so far served to further strain relations between the Iraqi Kurds and the central government in Baghdad. Due to tension in border areas with Syria, central government Iraqi forces have been seeking access to areas controlled by the Kurds, and this, in turn, has aggravated the conflict between Erbil and Baghdad.

For the first time, the Kurdish peshmerga ministry has now published a constitutional defence of its position. In a letter directed to Prime Minister Nuri al-Maliki, the Kurds enumerate four constitutional articles that they consider Baghdad are violating when they are seeking access to the Kurdish areas: Articles 9, 61, 111 (some sources say 11 but that makes no sense) and 121.

Article 9 of the Iraqi constitution deals with the Iraqi army. It is one of the few constitutional provisions to specifically demand proportional representation on an ethno-sectarian basis (quotas), and this is conceivably what the Kurds are complaining about, even though there are large numbers of Kurds serving in the Iraqi army controlled by Baghdad.

Article 61 deals with parliamentary powers, and presumably the Kurdish objection relates to the failure of government to have leading military officials confirmed by parliament. This is a real problem, although there are reports that the government has lately sent a list to parliament which is now awaiting approval.

Article 111, if correctly cited, deals with oil ownership (“Iraqi oil belongs to the Iraqi people in all the governorates and regions”)  and is presumably a general criticism of Baghdad regarding the longstanding dispute about whether Erbil or Baghdad should conclude deals with foreign oil companies.

Article 121 specifically gives federal regions the right to organize internal security including “guards of the region” which is commonly seen as the standard reference to the Kurdish peshmerga militia which is now the official internal army of the Kurdish region.

All in all, whereas it seems clear that the central government may need to make some improvements as regards Kurdish representation in the Iraqi army (article 9) and getting parliamentary approval of army officials (article 61), it is hard to see how article 121 could override the exclusive prerogative of Baghdad when it comes to managing national security and external defence  as set out in article 110-2, where “borders” are specifically mentioned. Indeed, article 121 itself at the outset explicitly stipulates that the powers given to the region should not usurp exclusive prerogatives of the central government as specified in article 110.

What this whole issue brings to the forefront, of course, is that whereas Iraq on paper may be a federation, it is in practice a confederacy in which the Kurdish entity appears to be torn between seeking independence and de facto Turkish overlordship. The Syrian crisis is likely to make these tensions more acute, given the apparent greater scepticism of the Syrian Kurds when it comes to accepting the idea of a substantial role for Turkey in deciding their destiny. As a consequence, it is possible that the autonomous Iraqi Kurds, too, will finally have to be more specific and concrete about where exactly they are heading and when.

A Smart Move by Maliki? Evoking the Stability Argument on KRG Foreign Oil Deals

In an interesting move, Prime Minister Nuri al-Maliki has asked President Barack Obama to intervene to stop Exxon Mobil activities in areas of Iraq controlled by the autonomous Kurdistan Regional Government.

Few details of the correspondence are known. The White House has officially acknowledged receipt of the letter from Maliki but has made no elaborate comment except saying it will reply in due course. A few comments on the letter by a Maliki adviser have been published by Reuters.

There is one interesting snippet of information in the reports that have emerged so far: Maliki is evoking Iraq’s “political stability” as an argument against Exxon’s operations in Kurdistan. As is well known, the conflict between Baghdad and the Kurds on oil concerns above all the right to sign deal with foreign companies generally. Additionally, some of the Exxon deals with the Kurds affect areas that are not only disputed between the KRG and Baghdad but even include territories that may well revert to the central government in a final border settlement.

The United States already has a series of executive orders in force relating to the stability of Iraq, though most of them target support for terrorism more specifically. Given Maliki’s choice of language, though, it is not inconceivable that he has in mind a logic similar to that embodied in a recent presidential executive order against US citizens threatening the stability of Yemen. That order contains deliberately vague language and could in theory apply to everything from Al-Qaeda to Aden separatism.

At any rate, by choosing the stability focus, Maliki is also addressing a latent contradiction in US policy on Iraq that is rarely addressed by the Americans themselves: Their continued support for Kurdish leaders with declared separatist agendas despite an official US desideratum of a unified Iraq within its sovereign borders.  The fact is that the United States (and many European nations) are treating Kurdish leader Masud Barzani pretty much as a head of state, with privileges during state visits etc. that few  other heads of federal entities worldwide can expect. This is precisely the sort of schizophrenic behaviour that has helped create unmanageable formulas for Iraqi governance like the Erbil agreement. It would be more honest of these players to make up their minds and either support full Kurdish independence or encourage policies that would provide for meaningful integration of the Kurdish region in an Iraqi federation.

Whether Washington will actually use this opportunity to rethink its Iraq policy remains to be seen. It is perhaps somewhat unrealistic given the presence of an able Kurdish lobby in DC that helped create the current contradictive policy in the first place. At the very least, though, Maliki will likely score some domestic points on the issue, of the same kind that recently endeared him to Sunni and secularist figures unhappy with how parts of the Iraqiyya leadership are cooperating with the Kurds, including in relation to Exxon Mobil in Nineveh.

Whether such support for Maliki’s KRG policy is sufficient to prevent any concerted action against him when the Iraqi parliament reconvenes on Saturday is still unclear. Already, some of Maliki’s enemies are accusing him of manipulating the security environment around parliament  with a view to intimidating political opponents (in particular this applies to the recent removal of the concrete barriers surrounding the national assembly). An unremarkable agenda for Saturday’s session appeared on the parliament website yesterday only to be removed again today. Parliament speaker Nujayfi now says he expects a request for a questioning of Maliki within two to three days, whereas Iraqi state television has indicated a forthcoming request for Maliki himself for an emergency session – possibly a pre-emptive move.

At any rate, with President Jalal Talabani having apparently abandoned the project of a presidential call for a no confidence vote, the conflict surrounding Maliki’s premiership is now likely to become a more long-drawn affair.

Triumph for Maliki as Iraq Passes the Annual Budget

It took even longer than last year, but the Iraq annual budget finally passed in parliament today with a solid majority.

Many aspects of the budget are similar to last year, with small increases to all the main posts, roughly following the draft that was introduced in December 2011. The big money still goes to the central government and Kurdistan, with some added perks for the ordinary governorates. It is noteworthy that spending on electricity is sharply up compared with 2011, which must be a good sign.

Some special features of the last-minute changes to the original draft call for comment.

The Sadrists had demanded a petrodollar scheme by which a portion of Iraqi oil revenues would go directly to Iraqi citizens. This idea has indeed been included and was celebrated by the Sadrists as a win for their leader Muqtada. However on closer inspection it seems the money that will actually go to the citizens is whatever surplus is left after deficits have been covered, meaning that unless the oil price increases enormously, there may not be that much money to distribute after all.

Money has also been specifically guaranteed for the sahwa pro-government militias in Diyala and Nineveh. This is a response to a demand from the Wasat sub-bloc of the Iraqiyya coalition, and some parliamentarians suggested it constituted the main concession by the government in obtaining Iraqiyya support for the budget.

Last year, the Kurds pressed hard to obtain cost coverage for foreign oil companies operating in Kurdistan. This heading still exists, but the main Kurdish achievement this year seems to be the privilege of having the central government financing their electricity sector outside their fixed 17% share of the budget (at least, that is how some Kurdish politicians interpret the new arrangements). By way of contrast, oil is referred to in the same way as last year but with a somewhat Delphic reference to payment of costs to foreign companies “according to all articles of agreement between the oil minister in Baghdad and the KRG energy minister”. Whether this refers to the existing pragmatic cost-oil recovery scheme or something else (and maybe future) remains unclear.

As regards the governorates, the role of the governor in implementing investment projects seems somewhat strengthened and in some cases is defined as an exclusive prerogative. The petrodollar scheme for producing governorates also continues, and there is money for the pilgrimage cities (Karbala gets the lion’s share followed by Najaf).  Not all of the enhanced governorate focus is necessarily progressive – there are now for example governorate quotas for foreign scholarships. Also, regardless of what the budget says, much of this will depend on implementation capacity in the governorates, which is often substandard.

In this way – and perhaps with the added incentive for Iraqi parliamentarians to show up and vote since they will now get their armoured cars as a result of today’s vote – the budget passed despite a pessimistic outlook earlier in the week.

What it all amounts to is something of a triumph for embattled Prime Minister Nuri al-Maliki. Critics of this interpretation will perhaps say there are individual clauses in the budget that may limit prime ministerial freedom of action more than before. Some of his own deputies soured today and said silly things (Sunayd: “I consider resigning as a deputy because the parliamentary majority defeated me on article 36!”) But that is besides the point. What Maliki has achieved is a situation in which he doesn’t really need the Iraqi parliament for a long time, providing him with the cover he needs to take a relaxed attitude to demands for national conferences and the implementation of the Arbil agreement. To have achieved passage of the budget under adverse circumstances and with Iraq literally under fire from terrorists today is nothing short of a masterful accomplishment in statecraft.

It is quite emblematic of the situation in Iraq that earlier this week, Usama al-Nujayfi, the parliament speaker of the secular Iraqiyya, characterized Iraq as a “derailed train”. Today, Nujayfi went on to play exactly the role Maliki wanted him to play by shepherding the budget vote to a successful conclusion. Maliki plays it well when he manages to buy political support over the budget instead of making political concessions.

Symptomatically, perhaps, the Iraqi media almost forgot that another preparatory meeting for the elusive national conference had to be cancelled today because of the prolonged budget debate. That cancellation might well be a bellwether for Iraqi politics for the rest of 2012.

Towards Asymmetrical Decentralisation in Iraq?

Maybe it was the physical dislocation of the Iraqi cabinet and Iraqi journalists to the southern port town of Basra that was the reason.  Perhaps it had to do with a desire on the part of Prime Minister Nuri al-Maliki to somehow please his constituency in Basra at a time when pro-federal Sunni movements have forced him to take a negative stance on the creation of new federal regions generally. Whatever it was, Iraqi politicians and journalists produced an amazing array of misleading statements subsequent to the first meeting of the Maliki government outside the capital Baghdad yesterday.

In what appeared to be direct quotes from normally reliable people like deputy PM Hussein al-Shahristani and government spokesman Ali al-Dabbagh, there were suggestions that not only had Basra been granted some kind of special status with minister rank for its governor and enhanced spending powers compared with other governorates. Some even suggested that contractual powers for the oil sector were also included:

وقال الشهرستاني في تصريح صحفي ان :” مجلس الوزراء قرر في جلسة عقدها اليوم في البصرة منح المحافظ خلف عبد الصمد صلاحيات وزير فيما يتعلق بصرف المبالغ الخاصة بالمشاريع الخدمية الى جانب ابرام العقود النفطية في خطوة ينشد منها المجلس توسيع صلاحيات الحكومة المحلية في المحافظة “.
واشار الشهرستاني الى ان ” قرار المجلس اعطى المحافظ صلاحية التوقيع على صرف مبالغ تتراوح ما بين 50 الى 100 مليون دولار والتي كانت سلفا حصرا بالوزير ، كما مكن المجلس المحافظ من احالة المشاريع وابرام العقود مع الشركات (بضمنها ا النفطية) دون الرجوع الى الوزارات المعنية بالامر “.

Many observers were skeptical, but for the next 24 hours the stories made their way through Iraqi media anyway – complete with parliamentarians commenting for and against the assumed cabinet decision. After all, the Iraqi cabinet already violates so many fundamental features of the Iraqi constitution (including the right to form federal regions) that it wouldn’t necessarily be shocking for it to introduce yet another infraction, however outlandish.

In the end, though, it was a false alarm. In the more down-to-earth report by parliament spokesman Dabbagh today, there is no mention of the oil sector, and hardly any suggestion that Basra was given special status – the reported spending cap was made to apply to all governorates. In fact, in the Dabbagh summary, the only special privilege granted to Basra is an apparently simplified governmental approval process for certain kinds of projects. Whether this really constitutes differential treatment in practice remains to be seen, but it is a lot less radical than the initial media headlines suggested:

7.الموافقة على زيادة سقف الحد الأعلى لصلاحية لجان المشتريات في كافة المحافظات الى (100) مليون دينار بدلاً من (50) مليون دينار ورفع صلاحية المحافظ في الإحالة الى (100) مليار دينار. والإيعاز الى محافظة البصرة بعرض المشروعات المحالة من قبلها دون إستحصال موافقة اللجان الوزارية المختصة على اللجان المختصة القطاعية لتدقيقها وإستحصال الموافقات الاصولية بشأنها وعلى اللجان الوزارية القطاعية (لجان الخدمات والشؤون الاقتصادية والطاقة والتعليم) النظر في المشاريع المحالة عليها من الوزارات والمحافظات خلال (14) يوماً من تاريخ استلام الطلب في اللجنة وبخلاف ذلك تعتبر موافقة اللجنة حاصلة ما لم تبادر اللجنة لطلب معلومات إضافية عن المشروع من الوزارة أو المحافظة خلال تلك الفترة وترسل طلبات الموافقة على الإحالة الى اللجان الوزارية المختصة مباشرة دون الحاجة الى إرسالها عن طريق الأمانة العامة لمجلس الوزراء من قبل الجهة المعنية وباليد لتسريع الإجراءات

What this whole little affair has revealed, however, are the large gaps in the legislation regulating centre–periphery  relations in Iraq – as well as considerable ambiguities in the Iraqi constitution itself.

Everyone talks about the “spending cap” for governorates, but where exactly has that been legislated? Is it in the provincial powers law of 2008 or in the annual budgets?? This problem in turn relates to the fact that the provincial powers law of 2008 did not really do much to demarcate responsibilities between governorates and ministries in so-called “shared” areas of government (articles 112 and 114 of the constitution). What it did, first and foremost, was to create a sack-and-appoint procedure whereby local politicians were given a say in the appointment of high-level officials of the central administration working in their governorate (health, police, education etc.).

Similarly, today, the Kurdish MP Bayzid Hassan expressed outrage about the alleged cabinet decision to give Basra contracting powers for the oil sector. This “has to be legislated”, he demanded. But his outrage is misguided. According to article 112, federal regions and producing governorates enjoy exactly the same rights as far as oil is concerned. Basically, if KRG can sign – and that is a big if, depending on how one reads the rest of 112 – Maysan can sign. There is no other possible reading, regions and producing governorates have equal constitutional status as regards energy (and residual powers, article 115), period. Incidentally, this means that if any of the current draft versions of the oil and gas law actually passes in parliament, it will be unconstitutional from the get-go since all versions bestow contracting rights on federal regions but not on producing governorates.

Most commenters dismissed the story about Basra contracting rights as unrealistic, not least given the past record of centralism on the part of Shahristani in particular. What the episode actually highlighted was yet another fundamental contradiction between the Iraq outlined in the constitution of 2005 and the way the country actually works.

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.

The Exxon Mobil Bombshell

So far, conspiracy theorists alleging that American appetite for oil was the real factor behind the Iraq War – perhaps even in a plot intended to partition the country for the benefit of US oil interests – haven’t quite been able to fit their theory to the empirical realities. Until now, American companies have not been particularly prominent in terms of their involvement on the ground in “the new Iraq”. Also, generally speaking, most of the contracts of the IOCs signed with Baghdad come across as modest in terms of profit rates for the Western companies compared to what goes to Iraq.

Enter Exxon Mobil and its recent Kurdistan dealings. The story began in the shape of rumours last week but has now been confirmed by a sufficient number of sources that it can be treated as facts: Exxon has cut separate exploration deals with the Kurds, circumventing Baghdad and thereby potentially jeopardising its existing service contract with Baghdad for the supergiant West Qurna field near Basra. The move could also signify the entrance of “big oil” into Kurdistan after a period of “small oil” dominance (including, most recently, former BP chief Tony Hayward in his new role in Genel). 

The bid comes at the most critical juncture imaginable. For the first time in the history of Iraq, the central government is threatened by federalism movements in both Sunni and Shiite areas, alongside the existing challenge from the established Kurdish region. Today saw further unprecedented moves in this direction in parliament where Usama al-Nujayfi, the speaker of the national assembly, organised an impromptu conference on federalism and decentralisation issues. The conference – attended by representatives of five Sunni-majority provinces and reportedly boycotted by the ten Shiite-majority ones – concluded with a statement that highlighted such broad issues as the constitutional right to form regions, the need to reform the provincial powers law of 2008 and even the question of the impartiality of the Iraqi judiciary.

Whether Prime Minister Nuri al-Maliki in this critical situation will bend to the pressure from Exxon Mobil and give up his policy of blacklisting companies that do separate deals with Kurdistan remains to be seen.

A consistent response would involve kicking Exxon out of its Qurna contract which is shared with Shell (which in turn has not concluded any deals with the Kurds). Maliki has so far been able to resist federalism initiatives from fellow Shiites in Basra and Wasit, and has recently indicated a possible judicial approach that could create delays for the latest Salahaddin autonomy bid. Maliki does not really enjoy the parliamentary backing required to act so boldly, but as long as his enemies are unable to sack him due to their own disunity there is plenty of room for manoeuvre for the prime minister regardless of the parliamentary situation.

If on the other hand Maliki does feel threatened by the growing number of unhappy oppositionists he will likely turn to deal-making with the Kurds in order to ensure his own survival. In that respect, bargains over oil may perhaps be an easier route than a sell-out on Kirkuk (which is certain to meet with opposition even in Shiite Islamist circles that are normally friendly to the Kurds). Taking a pragmatic approach to the latest Exxon deals in Kurdistan might be one aspect of such an approach.

The international dimensions of these developments are particularly hard to grasp. It seems remarkable that a company of Exxon’s stature should run such an incredible risk with West Qurna had there not been some kind of deal-making and assurances under the table.  Could the move have been clarified with the Obama administration? Right now, it seems Washington cannot quite make up its mind as to whether to slap Maliki in the face or try to put a gloss on the whole situation. It is noteworthy that according to Kurdish sources, the deals with Exxon were signed on 18 October 2011 whereas 21 October was the date of Obama’s “total withdrawal” speech on Iraq. Would Washington really want to put all its eggs in basket of central-northern Iraqi energy when even the most optimistic scenarios for the Kurdish areas (including the projected Nabucco pipeline) dwindle by comparison with the south? The geopolitical risk of those fields falling under ever firmer Iranian control is certainly considerable.

The net effect of the Exxon Mobil dealings are easier to evaluate: They make Iraq look more fragmented, vulnerable and susceptible to foreign influences than for a long time.

Another Parliamentary Defeat for Maliki

Today’s vote in parliament on a law for Iraq’s anti-corruption commission was in some ways another defeat for Iraq’s prime minister Nuri al-Maliki. On a key article of the law, namely the mechanism for appointing the leader of the integrity commission, Maliki and his political allies had sought a different formula than that eventully agreed to by parliament: Whereas Maliki had asked for prime ministerial appointment powers, parliament reserved that prerogative for itself in article 4 of the new law. As usual in Iraq, no details on the votes of individual deputies were published but it has been made clear in press reports that the supporters of the anti-Maliki measure were generally Iraqiyya, the Kurds and possibly some individual members of ISCI.

Still, despite these developments in parliament today, two important caveats pertain to the image of Maliki coming under pressure. Firstly, today’s decision was in the realm of simple-majority decisions rather than anywhere near the absolute-majority territory in which the most crucial decisions – such as sacking the government itself – are made. With 248 deputies present, no more than 125 votes were required to win the vote, meaning we are still far away from the magical 163 needed to withdraw confidence in Maliki.

Second, today’s vote against Maliki was enabled precisely because it focused on a single anti-Maliki clause that attacked him personally. Conversely, when the issues are broader, this sort of cross-party political consensus that could form the basis for a challenge to the government simply does not exist. This can be seen for example in the debate on the oil and gas law. Seemingly there is a parallel challenge to prime ministerial power in the parliamentary oil and gas committee version of the oil and gas bill, which differs from the government version above all when it comes to the role of the PM in the projected, all-powerful federal oil and gas council. But in other areas of the oil and gas legislation – and especially in areas concerning centre-periphery relations – fissures in the anti-Maliki coalition are evident. Firstly, it seems unclear whether the Kurds are wholeheartedly supporting the committee version of the bill at all, since their latest tirade against the “Maliki draft” included criticism of items concerning central government powers that can in fact be found in the committee version of the bill as well. In other words, maybe the Kurds are not terribly serious about the committee bill at the end of the day and instead are just trying to heap pressure on Maliki in order to get a better deal from him bilaterally in KRG-Baghdad negotiations.

Second, even parties often seen as pro-Kurdish are at variance with Arbil when the specifics of oil and gas and other “big issues” (like disputed territories) come up for debate. Nowhere is this more evident than in the case of the Islamic Supreme Council of Iraq (ISCI), which despite its reputation as a pro-Kurdish party has recently found it necessary to issue criticism of alleged oil smuggling from the Kurdish areas as well as what is seen as Kurdish attempts at grandstanding through reducing the oil output from the KRG area. Issues like these have over the past few weeks been highlighted by pro-ISCI deputies such as Qasim al-Aaraji and Falih al-Sari. Indeed, when it comes to the disputed territories, even Iraqiyya – which has recently gone quite far in accommodating Kurdish sentiment with respect to oil, at least at the level of the party leadership – have strongly protested developments in Diyala province, where the recent visit by the Kurdish president Masud Barzani prompted strong protests locally.

The lack of cohesion among Maliki’s opponents in turn explains how he is able to remain in power despite a decidedly flimsy parliamentary support base. The Kurds took at face value his promises on oil and gas and other issues in late 2010, overlooking the fact that these issues belong to the realm of parliamentary decisions and even referendums rather than to that of the premier. Maliki clearly is not strong enough to produce parliamentary decisions on these matters; however, he is quite capable of  hanging on to power thanks to the inability of the opposition to unite to sack him. In the end this may suit Maliki well, since it means he can escape or postpone painful decisions on issues like oil and Kirkuk that would potentially bring him into conflict with the limited power base that he still retains in parliament.

The Oil-Law Showdown

If the restart of oil exports from the Kurdish Regional Government area in February served as an indication of an evolving axis of political friendship between the Kurds and Prime Minister Nuri al-Maliki’s State of Law bloc, developments in Iraq during the past month have pointed in the opposite direction.

Perhaps the first sign that something was wrong came in August when Kurdish peshmerga troops entered areas in Diyala that they had previously agreed with the central government to stay out of. Whereas similar actions in Kirkuk earlier in late February and March had prompted a surprisingly muted reaction from Maliki (and hence seemed to suggest that the alliance between Maliki and the Kurds could be deepening at a time when Maliki was worried about increasing public anger on Iraq’s streets), this time the Kurdish moves have been followed by a heated verbal exchange between Maliki and Kurdistan’s president, Masud Barzani.

Of course, altercations between the Kurds and Maliki are nothing new. They were prominent in the 2006–2009 period as well, when they often focused on the so-called “disputed territories” claimed by the Kurds and the implementation of article 140 of the constitution related to these areas. This time around, however, it is the oil and gas law that has moved to the forefront of the debate.

In a recent statement, the Kurds promised to “boycott parliament and government” if the oil and gas law presented to parliament by the government is indeed passed by parliament. The Kurds say they object to new changes to the draft, which include giving the prime minister a somewhat stronger role in the projected oil and gas council, but also involves a slightly different decision-making mechanism on contracts: In the latest version of the bill, contracts signed by regional authorities are invalid unless they are specifically approved by the oil and gas council with a two-thirds majority; conversely, in the old draft, such contracts would automatically be valid unless they were actively struck down by the council, again with a two-thirds majority. In other words, the ability of regional authorities to push through their own contracts is more restricted in the newest draft. Last, but certainly not least, the latest draft indicates a stronger role for the ministry of oil in arranging licensing rounds also in the regional-government areas, which was seen as an exclusive competency of the regional authorities in the previous draft.

Constitutionally speaking, then, the latest “Maliki draft” (as it is already referred to by its opponents) is not that much different from the previous version. The creation of the federal oil and gas council recurs in all versions of the draft, albeit with a slightly stronger prime ministerial role in the latest one. True, there are real differences in article 18 second regarding the procedure of approving contracts, but again this is a gradual change from the last version. Perhaps the most dramatic intrusion on what some see as regional rights is the designation of a role for the oil ministry in arranging licensing rounds for the regional entities (article 14), which pro-federal politicians no doubt will see as infringement on the implicit residual right for the regions (and governorates) to sign deals for “future” fields in the constitution (only “existing” fields are specifically mentioned as falling within the exclusive jurisdiction of the central government). Of course, article 112 second of the constitution can be construed as giving the right to the ministry to get involved in all fields one way or another as far as “strategic policy” is concerned, but critics will probably argue that the involvement of the central government both at the contracting stage as well as at the decisive review stage in the oil and gas council means excessive interference.

It is unsurprising that the Kurds should react angrily to these changes. Somewhat more unexpected is the latest rush of visitors to Arbil in an apparent demonstration of loyalty to the Kurds in the oil and gas dispute, including Iraqiyya leader Ayad Allawi and the Jordanian prime minister. Iraqiyya, in particular, go quite far in some of their latest comments on the oil and gas law. Yesterday Maysun al-Damluji thundered that the latest draft was not only “unconstitutional” but also gave the oil ministry too much power! Apparently, Iraqiyya have already forgotten the outcry from Iraqi technocrats when the first oil and gas law was presented in 2007 and especially the criticism of the powerful oil and gas council headed by politicians at the expense of the ministry and the technocrats.  Had Iraqiyya been loyal to its own electorate of past bureaucrats, it would have been more logical to attack the oil and gas council as such (and restore the ministry as the chief power broker) instead of spending so much energy promoting the rights of regional entities. But by exploiting personal animosities between Allawi and Maliki, the Kurds have effectively managed to transform Iraqiyya to a pro-federal party.

For their part, Iraqiyya seems to be justifying what they are doing with reference to imaginary mathematics. Supposedly, the goal of it all is to create some kind of opposition alliance aimed at toppling Maliki. Except that the numbers just don’t add up. Even Iraqiyya, the Kurds and minority friends of the Kurds are unable to muster more than around 145 votes, which falls short of the required 163. The Kurds know this and are probably merely exploiting the show of support by Iraqiyya and Jordan to heap pressure on Maliki in order to get a better deal with him bilaterally. Perhaps the best indication of the tactics of the Kurds in this case is their sponsorship of an alternative oil and gas bill which, despite what many press reports say, in fact is not that much different from the government version. Exactly like the Maliki draft, the parliamentary version also provides for a federal commission with veto rights on regional oil contracts, albeit on slightly different terms. But the Kurds know that the parliamentary version is unlikely to go anywhere due to procedural objections by the federal supreme court, and may be co-sponsoring the bill just in order to get Iraqiyya on their side to put pressure on Maliki. 

It can be argued that if Iraqiyya cannot work with Maliki, they should seriously consider reverting to a more honest, purely opposition role from which they could speak their mind instead of producing convoluted statements of the kind presented by Damluji yesterday. If not, Iraqiyya and indeed the Kurds should be aware of an alternative scenario that is probably on Maliki’s mind every now and then: Building a majority with all of the Shiite Islamists (currently around 158) plus White Iraqiyya (10) and defector elements from Iraqiyya and then pretend to act as Iraqi nationalists and centralists. A sort of Shiite-led version of the old regime perhaps.

The more Iraqiyya continues to stultify itself with statements like the recent ones on the oil and gas bill, the greater the probability for  defections from within their own ranks. In turn, Maliki’s alternative plan, without the Kurds and Iraqiyya, could gradually become less and less utopian. Maliki may well be hoping that as time passes by, such an alternative will emerge and will eventually allow him to take a more centralist position vis-à-vis the Kurds on disputed territories and not least on the symbolically important city of Kirkuk. The Kirkuk issue is more immediately understood by the Iraqi public than complex legal oil issues and is a question where neither Maliki nor Allawi may be able to give the Kurds all they want.