Iraqi Sunni Lands Show New Oil and Gas Promise
By JAMES GLANZ
New York Times
KARABILA, Iraq, Feb. 18 — In a remote patch of the Anbar desert just 20 miles from the Syrian border, a single blue pillar of flanges and valves sits atop an enormous deposit of oil and natural gas that would be routine in this petroleum-rich country except for one fact: this is Sunni territory.
Huge petroleum deposits have long been known in Iraq’s Kurdish north and Shiite south. But now, Iraq has substantially increased its estimates of the amount of oil and natural gas in deposits on Sunni lands after quietly paying foreign oil companies tens of millions of dollars over the past two years to re-examine old seismic data across the country and retrain Iraqi petroleum engineers.
The development is likely to have significant political effects: the lack of natural resources in the central and western regions where Sunnis hold sway has fed their disenchantment with the nation they once ruled. And it has driven their insistence on a strong central government, one that would collect oil revenues and spread them equitably among the country’s factions, rather than any division of the country along sectarian regional boundaries.
(The rest is here.)
New York Times
KARABILA, Iraq, Feb. 18 — In a remote patch of the Anbar desert just 20 miles from the Syrian border, a single blue pillar of flanges and valves sits atop an enormous deposit of oil and natural gas that would be routine in this petroleum-rich country except for one fact: this is Sunni territory.
Huge petroleum deposits have long been known in Iraq’s Kurdish north and Shiite south. But now, Iraq has substantially increased its estimates of the amount of oil and natural gas in deposits on Sunni lands after quietly paying foreign oil companies tens of millions of dollars over the past two years to re-examine old seismic data across the country and retrain Iraqi petroleum engineers.
The development is likely to have significant political effects: the lack of natural resources in the central and western regions where Sunnis hold sway has fed their disenchantment with the nation they once ruled. And it has driven their insistence on a strong central government, one that would collect oil revenues and spread them equitably among the country’s factions, rather than any division of the country along sectarian regional boundaries.
(The rest is here.)
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2 Comments:
The skeptic in me finds this news more speculative than spectacular.
Oil in Sunni-dominated Anbar province would seem to encourage the acceptance of the oil revenue sharing law being debated by the Iraqi Parliament. It is my understanding that the law will legalize Production Sharing Agreements. Privatizing Iraqi oil will give profits to foreign companies as the three regions will cut individual deals with foreign companies while the central government is shutout from being involved. The Kurds have been doing this for some time. Thus far, the Sunni’s have opposed this plan as it fears that it will lead to the break-up of the country. I must think that they are less concerned about the break-up of the country than are concerned that the other regions will have more oil revenues. By announcing this might be a way of trying to convince the Sunni’s that there will be something in it for them … the pitfall is that the foreign companies are going to make their decision based on regional stability, easy of access, and costs … the Kurdish region will be the area most companies want to be in as the Peshmerga paramilitary seems to exert control … second would be the Basra-dominated Shiite region which would be able to find investing partners just as the Shiite Iran has … lastly would be the unstable regions of Anbar, etc.
In the long term this could be workable, but I am concerned that initially the Sunni’s will react with increasing the levels of violence and anger in Iraq.
Even if the oil revenues are proven and producing, there is so much damage in that region. Did you see the newstory about the condition of drinking water in Anbar?
http://www.alertnet.org/thenews/newsdesk/IRIN/47680f1705a41755f52cc54b99ad50ae.htm
FYI – From aljazeera, a review of the proposed oil legislation “concerning Iraq's sovereignty. Iraq will not be capable of controlling the levels -- the limits of production, which means that Iraq cannot be a part of OPEC anymore. And Iraq will have this very complicated institution called the Federal Oil and Gas Council, that will have representatives from the foreign oil companies on the board of it, so representatives from, let’s say, ExxonMobil and Shell and British Petroleum will be on the federal board of Iraq approving their own contracts.”
“But the law definitely sets up a very dangerous setup for Iraq's future economic stability, economic development, and certainly sets the stage for a tremendous amount of increased hostility and violence to U.S. soldiers positioned on the ground, as being seen as the implementers of this oil hijack."
http://www.aljazeera.com/me.asp?service_ID=13105
If the foreign companies get in, will they be faced with a future demand to nationalize the company as is happening in South America today? Nationalizing typically requires the country to own a majority of the interests in the subsidiary at a price that the country determines.
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