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[casi] Kurdish Group Takes Autonomous Role in Iraq Oil Projects


Kurdish Group Takes Autonomous Role in Iraq Oil Projects


SULEIMANIYA, Iraq, May 13 - A Kurdish political party working with the
United States to shape an interim government in Iraq has been pushing ahead
quietly on three oil development projects, acting autonomously as a local

The Patriotic Union of Kurdistan, one of the two main Kurdish parties in
Iraq, has signed production-sharing contracts with two Turkish companies,
PetOil and General Energy, to develop and survey oilfields in northeast
Iraq, according to Rasheed Khoshnaw, deputy director of the party's special
projects division.
In addition, party officials recently agreed to allow an Australian company
to do surveying work in eastern Iraq, said Mr. Khoshnaw.

Barham Salih, the prime minister of the eastern Kurdish enclave, which is
run by the Patriotic Union, said the company had offered its services as a
consultant, but the offer had never been formally recognized in a contract.
"A lot of people have been coming to us with proposals. At this moment in
time, we don't want to make oil an issue."

A spokesman in Baghdad for the Patriotic Union's leader, Jalal Talabani,
said projects had been put on hold for the time being.

But Mr. Khoshnaw said in an interview here on Tuesday that PetOil
representatives would arrive this week for survey work on an oil field on
the border with Iran. He said the Australian project also appeared to also
be moving forward.

"Their representative told me it's all signed and ready," Mr. Khoshnaw said.

Mr. Khoshnaw said that the future of the projects was uncertain, as
politicians jockeyed for position to form an interim government in Baghdad.
But he said he had yet to receive an order to stop work.

He noted that the most recent of the oil agreements was concluded three
months before the war in Iraq began in March. At that time, United Nations
sanctions limiting Iraqi oil exports were firmly in place, although now the
Security Council is considering a resolution that would lift them.

The oil field the Kurds are hoping to develop is called Taktak, and it is
about 18 miles northeast of the vast Kirkuk oil field that yielded about
half of Iraq's daily pre-war production of 2.7 million barrels.

Adel Murad, a Patriotic Union spokesman in Baghdad, said the draft contract
for the field was supposed to be "secret."

"These things are political problems," he added, "because then the Arabs
will think the Kurds want an independent country."

Mr. Murad said that by floating the idea now, the Kurds hope to get a bigger
share of Iraq's oil wealth when an interim government is in place, which
would, in turn, add to the party's political clout.

Raad Alkadiri, an expert on Iraqi oil and a director at PFC Energy, a
Washington consulting group, said of the move by the Kurds, "This sets a
huge political precedent."

"It doesn't matter that Taktak is a small field or these are small
contracts. There's a slippery slope here. What's to stop the Kurds from
doing this with Kirkuk?" he added.

Mr. Khoshnaw said that since the war, he has been bombarded with requests by
foreign companies - in particular Russian and Turkish concerns - to begin
joint work in northern fields.

"They asked us about political risk and I told them, `Maybe you can work,
maybe you can't,' " said Mr. Khoshnaw, who studied in the former Soviet

As international oil companies eye Iraq's oil riches, local people, it
appears, are trying to keep their options open.

Control of Iraq's vast oil reserves will be central to power and politics in
the new Iraq.

Oil is an emotional issue for the Kurds. They suffered through a brutal
"ethnic cleansing" campaign in the 1980's as Saddam Hussein ejected them
from their homes and brought in Arabs to exert stronger control over the
region's rich oil resources.

"We want to turn oil from a curse into a blessing for the Kurds," said Mr.
Salih in an interview at his home here. "We will insist on a new arrangement
by which oil will not be controlled by a single person or a single

After an uprising in 1991, when Kurds in northern Iraq broke free of Saddam
Hussein's rule, they began making their own arrangements for fuel supplies.

Taktak adjoins the fields around Kirkuk, a vast area that produces about
half of Iraq's crude oil. Another field, of unknown size, straddles the
border with Iran in an area called Chya Surkh.

Both fields are being developed by Turkish companies in agreements that give
the firms 49 percent of the oil and the Kurds 51 percent, said Mr. Khoshnaw.

However, only Taktak is actually producing oil, about 3,000 barrels a day,
said Usher Noori, head of operations at the field. The Kurds use the oil
domestically, said Mr. Khoshnaw.

The Kurds in Suleimaniya used ingenuity and water pumps from an old sugar
factory to build a jury-rigged refinery.

It stands today on the grounds of the sugar factory, and produces enough
petroleum products to supply about 20 percent of the needs of the eastern
Kurdish territory run by the Patriotic Union.

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