Could elections resolve Erbil-Baghdad energy disputes?
By: Yadgar Sadeq
The removal of bans on Kurdistan banks by Iraq’s Central Bank, attempts to reopen the airports, and the auditing of the KRG’s civil servants’ payroll are positive indications of improvement in relations between Erbil and Baghdad. On the other hand, marginalization of Kurdistan at the Iraqi Reconstruction Conference in Kuwait, Iraq’s continued pressure on oil companies and signing contracts with companies without considering the Kurdistan Region are not positive indications.
Despite this, can the upcoming May 12 elections, with support from the international community, bring both sides closer to each other, especially on energy issues?
In addition to international political figures, a score of investors and companies were invited to the Kuwait conference. But few were invited from the Kurdistan Region because of Baghdad’s opposition to Kurdistan benefiting economically from the conference.
Although excessive corruption and misadministration meant the conference did not meet its target – bringing in pledges of $30 billion, far short of the $88 billion goal – the Kurdistan Region could benefit from the collected funds. Kurdistan should be given a large share because it played a significant role in the fight against ISIS and some of its territory – especially in disputed areas – was demolished. In addition to this, Kurdistan protected a large section of Kirkuk province, preventing it from falling into ISIS hands, and it was a haven for nearly 2 million IDPs.
Iraq is also exerting pressure on the KRG over its contracts with international oil companies, wanting to sign its own agreements with them, including Russia’s Rosneft, which owns a sixty-percent share in the KRG’s pipeline. At the beginning of this month, Iraq’s Oil Ministry demanded Rosneft send a delegation to Iraq to discuss its contracts with the KRG. Oil Minister Jabbar al-Luaibi is also expected to visit Moscow regarding this.
Despite this, the Kurdistan Region’s oil sector has good news: Chevron will resume its operations in the Kurdistan Region, Genel recently announced an increase of forty percent at Taq Taq oilfield, and Russian companies have not wavered in their interest.
This good news indicates the KRG can stand against Baghdad’s plans to some extent.
Iraq realizes that the Kurdistan Region is experiencing a difficult financial stage – this is a strong point for Baghdad. But Iraqi parliamentary elections on May 12 may be a golden opportunity for Kurds because the United States and the international community are backing Haider al-Abadi’s re-election.
The United States knows that the formation of any new Iraqi cabinet requires Kurdish support. This has increased international pressure on Iraq to make an agreement with the Kurdistan Region.
The current political situation in the Kurdistan Region, its disunity and multiple electoral lists, will weaken Kurdish power in the Iraqi elections, however. The more unified Kurds are, the more likely it is that Baghdad will be willing to reach an agreement.
Yadgar Sadeq is an economic journalist, financial market analyst, and director of media for DCIFX, an investment company in the Kurdistan Region.
The removal of bans on Kurdistan banks by Iraq’s Central Bank, attempts to reopen the airports, and the auditing of the KRG’s civil servants’ payroll are positive indications of improvement in relations between Erbil and Baghdad. On the other hand, marginalization of Kurdistan at the Iraqi Reconstruction Conference in Kuwait, Iraq’s continued pressure on oil companies and signing contracts with companies without considering the Kurdistan Region are not positive indications.
Despite this, can the upcoming May 12 elections, with support from the international community, bring both sides closer to each other, especially on energy issues?
In addition to international political figures, a score of investors and companies were invited to the Kuwait conference. But few were invited from the Kurdistan Region because of Baghdad’s opposition to Kurdistan benefiting economically from the conference.
Although excessive corruption and misadministration meant the conference did not meet its target – bringing in pledges of $30 billion, far short of the $88 billion goal – the Kurdistan Region could benefit from the collected funds. Kurdistan should be given a large share because it played a significant role in the fight against ISIS and some of its territory – especially in disputed areas – was demolished. In addition to this, Kurdistan protected a large section of Kirkuk province, preventing it from falling into ISIS hands, and it was a haven for nearly 2 million IDPs.
Iraq is also exerting pressure on the KRG over its contracts with international oil companies, wanting to sign its own agreements with them, including Russia’s Rosneft, which owns a sixty-percent share in the KRG’s pipeline. At the beginning of this month, Iraq’s Oil Ministry demanded Rosneft send a delegation to Iraq to discuss its contracts with the KRG. Oil Minister Jabbar al-Luaibi is also expected to visit Moscow regarding this.
Despite this, the Kurdistan Region’s oil sector has good news: Chevron will resume its operations in the Kurdistan Region, Genel recently announced an increase of forty percent at Taq Taq oilfield, and Russian companies have not wavered in their interest.
This good news indicates the KRG can stand against Baghdad’s plans to some extent.
Iraq realizes that the Kurdistan Region is experiencing a difficult financial stage – this is a strong point for Baghdad. But Iraqi parliamentary elections on May 12 may be a golden opportunity for Kurds because the United States and the international community are backing Haider al-Abadi’s re-election.
The United States knows that the formation of any new Iraqi cabinet requires Kurdish support. This has increased international pressure on Iraq to make an agreement with the Kurdistan Region.
The current political situation in the Kurdistan Region, its disunity and multiple electoral lists, will weaken Kurdish power in the Iraqi elections, however. The more unified Kurds are, the more likely it is that Baghdad will be willing to reach an agreement.
Yadgar Sadeq is an economic journalist, financial market analyst, and director of media for DCIFX, an investment company in the Kurdistan Region.