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Books on Iraq

Update No: 111 - (26/07/12)

Summary: Although Iraq’s oil production continues to rise, tension over Kurdistan’s oil and over Prime Minister Maliki’s growing authoritarianism is only intensifying. As the regional political landscape becomes more complicated, it is also likely to reflect negatively on Iraq. Late in July there was a sudden resurgence of Al Qaida terror bombings and attacks. 37 attacks were carefully co-ordinated in over a third of Iraq’s 18 provinces. Like neighbouring Syria there is a Shia government in iraq, and the Sunni opposition in both countries includes the Al Qaida islamists, invited or not, whose first concern is to eliminate the Shia heretics and “to dominate territories we used to dominate – and more,” said their leader in Iraq, Abu Bakir al Baghdadi.

Tug-of-war over Kurdistan’s oil
Prime Minister Maliki’s efforts to isolate the Kurdistan region and roll back its growing success in attracting oil companies to invest suffered a blow in July, when Chevron agreed to purchase the 80% stake held by Indian conglomerate Reliance in two blocks in the Kurdish region in Iraq. With Chevron turning up in Kurdistan, Baghdad’s campaign against Exxon, which was already present in Kurdistan, becomes more difficult to achieve, despite Maliki’s claims that the Obama administration has endorsed his position and distanced itself from the Kurdish regional government. The administration indeed advised caution to the American companies involved in the Kurdistan region, warning them of the consequences of going against Baghdad’s will. The strength of the Kurdish regional government is that it offers much better contracts to the oil companies than Baghdad itself. The Iraqi government has been signing several oil deals in recent weeks, all coming out of the latest (not very successful) tender for oil fields. Few oil majors play any role in these deals, particularly American ones. Of 12 oil blocks being tendered, only three received winning bids and one was awarded after the conclusion of the tendering process, as the Bashneft-Premier Oil agreed to significantly worse conditions. Now Baghdad plans to cut Chevron’s contract to buy 167,000 bpd from Iraq in retaliation.

Last chance for Maliki?
With PetroChina, Total, Petronas Calgari starting oil production at the Halfaya camp, oil production in Iraq reached 3.1 million bpd in June, up from 3 million a month earlier. However, the increasingly florid economic outlook does not impact much on the political landscape, where the confrontation between the pro- and against Maliki camps is as bitter as ever. Maliki’s growing assertiveness vis-à-vis the Kurdistan regional government begins to convince observers that he would consider the military option as well. Recently Baghdad has been lobbying for accelerating the delivery of the 36 F-16 fighter-bombers which it ordered in the US along with all the associated equipment. Maliki is also sparring with the Turkish government, which sympathises with the Kurdish and Sunni oppositions to Maliki in Iraq and their attempts to unseat him; Turkey’s support for the anti-Assad opposition in Syria is another sore point, as Maliki instead supports Assad. The issue of Turkish cross-border raids into Kurdistan plays into Maliki’s hands also because denouncing these incursions strengthens his nationalist credentials and undermines those of the Kurdish regional government, which has been very quiet about them recently.

The Iranians to the rescue
The efforts to undermine Maliki seemed to be very close to deprive him of a parliamentary majority a few weeks ago, when Muqtada As-Sadr had reportedly offered his support to Iraqiya and the Kurdish parties for a no-confidence motion against Maliki in the parliament. Then the Iranians intervened and started negotiating between As-Sadr and Maliki, as well as lobbying on the latter’s behalf; the high level delegation included among others political heavy weight Ali Larijani. As a result As-Sadr has taken recently a step back and declared that if Maliki were to carry out a few reforms such as implementing article Article 140 of the Constitution, approving the oil and gas project and a few other minor things, then the Sadrists would not support the no-confidence vote. Maliki’s willingness to abide to the conditions set out by the Sadrists was not clear at the time of writing. Maliki was threatening to dissolve parliament in front of the threat of a no-confidence vote. Maliki has also to face a recrudescence in violence: 234 Iraqis were victims of political violence in June alone. While most of these deaths are the result of Al Qaida’s attacks on Shiites, the situation in Syria might also contribute in the near future to greater instability in Iraq.

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