Oil and Gas in the Disputed Kurdish Territories

Jurisprudence, Regional Minorities and Natural Resources in a Federal System

Rex J. Zedalis

• Publisher: Taylor & Francis
• Year: 2012
• eBook ISBN: 9781136300240
• Edition: 1
• Topic: Law
• Subtopic: Energy Industry
• Index: Law

This book examines the historical and contextual background to the oil and gas resources in the Kurdish territories, placing particular emphasis on the reserves situated in the disputed provinces. The volume is singularly unique in focusing on an examination of the rules reflected in both the national and the regional constitutional, legislative, and contractual measures and documents relevant to the question of whether the central government in Baghdad or the Kurdish Regional Government (KRG) in Erbil has a stronger claim to legal control over the oil and gas resources in the disputed Kurdish territories. As a subsidiary focus, the author also draws attention to how the basic thrust of the volume connects to broader jurisprudential issues regarding the nature and purpose of law, the matter of claims by native peoples to natural resources on traditional lands, and the place of regional minorities operating in a federal system. Since the law examined is domestic or municipal in origin, additional reference is made to the role that such law can play in the "bottom up" (as opposed to more conventional "top down") development of international law.

The book's opening chapters provide a valuable contextual introduction, followed by a number of substantive chapters providing an analytical and critical assessment of the controlling legal rules. Written in a scholarly, yet accessible style, and covering matters of basic importance to academics, lawyers, political scientists, government representatives, and students of energy and natural resources, as well as those of developing legal structures, Oil and Gas in the Disputed Kurdish Territories is an essential addition to any collection.

Part I

Contextual background of oil and gas in disputed Kurdish territories

The Kurds of northern Iraq, northwest Iran, northeast Syria, and southern Turkey are an ancient people. Though under a variety of overlords for millennia, with the founding of the modern state of Iraq in the wake of World War I, the last nine decades witnessed their endurance of three distinct periods of rule from Baghdad prior to the increased autonomy gained as a result of the Iraqi Constitution of 2005. The first period spanned the years of the Hashemite dynasty from 1921 to 1958. That period saw Kurdish post-World War I expectations of increased autonomy throughout the region frustrated, the rise of Iraqi Kurd resistance to Hashemite-British rule, the consolidation of power within the Kurdistan region around the Barzani brothers—Mullah Mustafa Barzani and Sheikh Ahmed Barzani—a major Kurdish revolt in 1942, and the eventual ouster from power of the Hashemite dynasty through a military coup led by a group of nationalist military officers. The second period spanned the decade from 1958 to 1968, and began with the military rule of Abdul Karim Qassim, passing in 1963 to his fellow officer Abdul Salam Arif, and then to Abdul Arif’s brother, Rahman, in 1966. Shortly after this decade of military rule began, the Kurds reinstituted their campaign for independence, and the suspicions always plaguing military regimes resulted in each of the three leaders keeping Iraq’s armed forces weakened and dislocated, with their ability to effectively resist the Barzanis and the Kurdish peshmerga severely compromised. Under the aegis of Ahmed Hasan al-Bakr, the Baath party eventually ended the military’s control of the country in 1968, securing a stranglehold that would last beyond al-Bakr’s own displacement by Saddam Hussein in 1979, until Saddam’s removal by coalition forces following Gulf War II in March of 2003. Prior to Saddam’s ascendency, Mulla Mustafa Barzani, angered over perceived failure of the al-Bakr regime to live up to a 1970 four-year autonomy plan mounted another major Kurdish revolt in 1974. That revolt’s failure proved a considerable setback, only further complicated by the “Arabization” and Al-Anfal campaigns instituted once Saddam gained leadership in Iraq.

Saddam’s defeat and the follow-on development of the Iraqi Constitution of 2005 witnessed the Kurds’ position in Iraq’s federal system strengthened. The new-found political autonomy or semi-autonomy in Erbil was seen as something to be coupled with assertions of control over oil and gas resources situated within the Kurdish region of the country. Those resources are considerable, reaching upwards of 22+ percent of Iraq’s known oil reserves and perhaps near 89 percent of its known natural gas reserves—some 70+ oil and gas structures are thought located within the entirety of the area claimed by the Kurds. As will be discussed at length below, large portions of the Kurdish region’s oil and gas reserves are found in the five disputed provinces or governorates of Ninewa, Kirkuk, Salaheddin, Diala, and Wasit, with the balance in the undisputed Kurdish provinces of Dahok, Erbil, and Suleimaniya. Though Erbil struck development contracts with certain international oil and gas companies prior to the official announcement of the opening of 54 oil and gas blocks in 2007, the blocks themselves do not cover all of the undisputed and disputed territories. While largely involving the undisputed provinces, the blocks do in fact overlap into disputed lands, especially in Ninewa, Kirkuk, Salaheddin, and Diala. This could prove an even more highly controversial issue with the central government than the basic question of the legal right of the Kurds to issue any contracts for the development of oil and gas resources in the Kurdish region of Iraq. Nearly 40 companies ranging from the Norwegian mid-size company DNO, to the American company Hunt Oil, to the collaborative Turkish/Chinese TTOPCO, the Anglo/French Perenco, and the Korean National Oil Company have reserved blocks for oil and gas activity in the Kurdish region. The central government remains unhappy, and has taken an on-again, off-again attitude when it comes to permitting Erbil access to export pipelines for putting its oil and gas on the international market, and making monies available for paying contractors for production activities and other field services provided.

When the technical issues associated with the status of legal control (as opposed to ownership) over oil and gas in Iraq’s disputed Kurdish territories are examined at length beginning in the chapters of Part II below, the matter of the general topic’s relation to universal jurisprudential themes, such as the nature and character of law, as well as the end or purpose law is to serve, will receive reference. In regard to the immediate two chapters of Part I, however, it would be expected that those familiar with the history and natural resource situations of other indigenous or aboriginal peoples, or the difficulties faced by sub-central governmental units overseeing the affairs of regional minority populations in other federal systems, might witness similarities to or distinctions from that involving the Kurds in Iraq’s northern provinces. As indicated earlier, attempts to rely upon, utilize, or draw lessons from the experience emerging out of the law surrounding oil and gas resources found in lands claimed by the Kurdish peoples in Iraq will have their persuasiveness either strengthened or undercut by the extent to which the historical and resource situations, as well as the operative federalism principles, parallel what exists in regard to the Kurds. In the two chapters that follow, the particular history and resource situation involving the Iraq Kurds will be enunciated. The drawing of parallels with other cases, however, will be left to readers far more knowledgeable and conversant with such than the present author. Nonetheless, it requires only the briefest of reference to the international community’s recent attention to the relationship of indigenous populations to natural resources on traditional lands in places like North and South America, the Eurasian continent, Australia, and the Pacific islands, or to the tensions between local or regional governments and those heading central governmental authorities in places like Serbia’s Kosovo, the Philippines’ Mindanao, or even Nepal’s Maoist or ethnic/caste minority areas, to refresh recollections of the broader informed audience about how the Kurdish situation implicates and, perhaps, enhances understanding of the issue of native peoples’ control over natural resources, or the issue of the challenges of federalism in a political system where regional minority populations exist.

Without scrutinizing the question of whether Iraqi Kurds qualify under what some might consider an accepted definition of indigenous peoples—a matter that remains unresolved, but many argue requires some period of domination by a colonial power—there seems little question they have populated the northern territories of that nation since time immemorial, have suffered through long periods of outside subjugation, and represent one of Iraq’s important lesser ethnic groups when measured against its more numerous Arab majority. As with Canada’s native peoples, Peru’s pre-Columbian Amazonian tribes, or Australia’s aborigines, the Kurds of northern Iraq have been blessed by the fates with an important and highly desired natural resource situated beneath ancestral lands. Operating under a federal system, the central government has sought to deal with the Kurds as a people, and with the oil and gas resources in lands they claim, within the context of a legal structure that relies upon both constitutional and legislated measures. Many of the tensions and controversies between the central government and the Kurds will be found to resonate with all those familiar with the struggles of indigenous peoples to secure both greater self-governance and increased authority over whether or not, how, and by whom resources within their physical reach are to be developed. In many instances, these concerns of native peoples have their touchstone in the cultural and spiritual relationship to the environment of their ancestral homelands. In others, they derive from the economic promise inherent in the development of the natural resources such lands hold. Recounting the more prominent of the historical events related to Iraq’s Kurds, and how the oil and gas resources of lands they claim have been parceled out for development cannot help but activate the minds of scholars who study the many other peoples blessed with resources, but cursed with positions of social and political inferiority.

1 Background regarding the question of Iraq’s Kurdish territories

I Introduction

Any adequate understanding of the various legal issues connected with oil and gas in Iraq’s disputed territories hinges, at least in part, on familiarity with the forces that have contributed to the extant tension between the central government in Baghdad and the Kurdish Regional Government in Erbil, and with the resource, ethnic, and religious interests that often serve to facilitate that tension. As will be observed below, the very notion of a “Kurdish peoples” has been in existence for some three millennia, and this has from time to time necessarily driven grand thoughts of a pan-Kurdish nation-state. The post-World War I establishment of the boundaries of much of the modern Middle-East political map clearly frustrated these Kurdish ambitions, directly contributing to the hard-feelings and animosities witnessed today, not only between the Kurds in northern Iraq and the authorities to the south in Baghdad, but between Kurds in southeastern Turkey and the government in Ankara, those in northwestern Iran and the government in Tehran, and those Kurds in northeastern Syria and the government in Damascus. While it is only natural for historically distinct ethnic groups to desire independent self-governance, once the boundaries of nation-states have been established, acceding to the legitimate desires of every group for autonomous self-rule can result in irredentism capable of undoing much of the political map of the entire world community. Whether it be the Uighurs (pronounced Weegers) in western China, the Basques in northwestern Spain, the Kosovars in Serbia, the Mayan Zapatistas in Mexico’s Chiapas region, or the Kurds in Iraq, the challenge is to craft a compromise that assures a sufficient sense of political significance to damp-down fervor for violence and secession, while doing so in a way that maintains the basic structures of government necessary for the nation-state to remain a single unit. Obviously, a federal system can be helpful in accomplishing that goal, but even then success can in part hinge on whether the distinct ethnic group tends to reside in a particular region of the nation-state, the degree of autonomy afforded regional units by the nation’s constitutional structure, as well as the level of hostility evidenced in the historical relations between the nation’s majority and its minority populations.

Iraq’s oil wealth provides another complication that heightens Kurdish interest in political autonomy, especially given that a not inconsiderable portion of that wealth is located in the geologic strata of the Kurdish north of the country. The complication itself has three aspects. First, the fact oil prices approached nearly $150 per barrel on the international market during the summer of 2008 (and will unquestionably eclipse that level once the current worldwide recession ends and the fragile economic recovery now underway gains full steam) indicates just how much this vital natural resource is coveted by each and every member state of the international community. Oil drives the wheels of commerce, and the Kurds are fully cognizant of that fact. As a result, they are unlikely to go quietly when it comes to assertions of control of oil now situated in provinces they populate. Second, almost all of Iraq’s international earnings derive from exports o...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Acknowledgments and dedication
• Part I Contextual background of oil and gas in disputed Kurdish territories
• Part II Federal constitutional allotment of oil and gas authority
• Part III How the Kurdish Constitution and relevant federal and regional legislation address oil and gas in disputed territories
• Part IV Disputed territories, the terms of the KRG’s model and negotiated PSCs, and observations regarding federalism
• Epilogue: largely of bottom-up development in international law
• Index