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Update No: 060 - (28/04/08)

Maliki tries and fails
March-April was marked by Prime Minister Al-Malikiís attempt to deal a final blow to the Sadrists, by challenging their control over a number of cities including mainly Basra and some neighbourhoods of Baghdad. The operation seems to have been the result of the lobbying of his allies in the Islamic Supreme Council who wanted to reclaim ground in order to consolidate their provincial councils positions in the forthcoming local elections. Maliki also seem to have conceived the effort as a demonstration of the growing strength and effectiveness of the state which he runs. Whatever the plan, it failed miserably, as the Iraqi army was pushed back by the militias and suffered significant levels of desertion. 1,300 army and police were sacked in the aftermath of the violence, for having failed to perform their duty. A humiliated Maliki was forced to allow Muqtada As-sadr led negotiations and re-establish the status quo. Malikiís position seems now weaker than ever; the fact that he was in Basra to personally direct the military operations made things look even worse. By contrast Sadr impressed the observers by succeeding in re-establishing some kind of discipline among his forces and gained considerable political capital. It remains to be seen whether he will be able to translate that into long-term gains. Rather than negotiating a more favourable power sharing deal with Maliki from this position of strength, he seems to be aiming at consolidating his popular support and translate it into an electoral triumph. He has most recently threatened all out war if the military is not called off from attacks on his people. It is widely believed that in the event of elections, Sadrís followers could make substantial gains. With the approval of the provincial powers law in April, provincial elections are now expected to take place soon.

And keeps trying
Despite all, Maliki does not seem to have given up his aim to strengthen state control vis-ŗ-vis the militias and within weeks of the confrontation with the Sadrists he was already trying to reassert control over gas distribution centres. Indeed thanks to their access to portion of the oil revenue, militias throughout the country have been able to replace the state as provider of social services, consolidating the loyalty of a large sector of the population and further weakening Baghdadís hold. The process has however gone so far that reversing it might require a stronger government. Malikiís attitude towards the Sadrists suggests that he might be harbouring similar plans for the Sunni militias in the north: initial appeasement followed by an attempt to crush them.

Oil law towards approval?
In mid-April a deal seems to have been finally reached on that part of the oil law between the central and the Kurdistan regional governments. The deal also includes a method for determining the validity of the oil deals the Kurds have signed with foreign firms. Baghdad and the Kurdish regional government have also agreed to rely on UN mediation to determine the fate of the disputed territories of the Kirkuk region. Some oil companies like Shell are allegedly already training oil workers. Some observers however believe that some controversial issues will resurface, such as the production sharing agreements which are at the core of the law. Many in Iraq argue that these agreements are far too favourable to international investors, given that the quality of Iraqi oil and the chances of successful drilling are much higher than average. Although sporadic attacks on pipelines have also resumed after a lull, the oil ministry is determined to move on and has also finalised the list of companies which will be allowed to bid on oil contracts. 35 of the 120 companies which applied have been included in the list, among them giants like BP, Shell, ExxonMobil, Total, Petronas, Gazprom, Lukoil and CNOOC. Six giant fields will be offered on the market this year, while more bid rounds will are planned for next year. Negotiations with the EU for the delivery of Iraqi gas to Europe also seem to be making steady progress although since the gas is currently being burned off there is still a way to go before there is any means of exporting it. 

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