Oil, Weapons and Iraqi Kurdistan
Moscow headed for diversification of partners in the regionAt the end of 2012, major anti-government demonstrations took place in Iraq, which seriously aggravated the domestic political situation and again put on the agenda the issue of resolving the territorial dispute between the federal authorities and the Kurdish national autonomy. The unresolved nature of this problem threatens to continue with a long-lasting ethnic conflict, which will have a negative impact on the overall already complex situation in the entire region. Meanwhile, at the end of February 2013, the first official visit of Iraqi Kurdistan President Massoud Barzani to Russia took place, marking the new vectors of Russian foreign policy.
The emergence of Iraq as a state in recent times took place under the influence of heterogeneous in its content internal and external factors, which primarily include the natural and geographical position, historical and the socio-economic development of the territories, as well as Iraqi society itself, which has a very complex and heterogeneous structure. It was formed after the political consolidation of the country under a British mandate from completely heterogeneous ethnic, religious, tribal and local communities from which Iraq was assembled after the collapse of the Ottoman Empire. Therefore, one of the most important issues of the period of independent development of this state was the question of the relationship of individual provinces with central authorities, while the issue of autonomy of the northern Kurdish region has always occupied a central place. This was due to the importance this province has for the Iraqi oil industry: out of the total proved reserves of Iraq (143 billion barrels), it has approximately 45 billion.
Fight for autonomy
When the law on the autonomy of Kurdistan was passed in 1974, the city of Kirkuk remained outside its framework, which was highly negatively perceived by the leaders of the Kurdish national movement. In 1975, a war broke out between the Kurds and the Iraqi government, after which Kirkuk’s decaudization policy was actively pursued. As a result, according to various estimates, more than 700 Kurdish villages were destroyed.
From the second half of 70, two political forces operated in Kurdistan - the Kurdistan Democratic Party (KDP) led by Massoud Barzani and the Kurdistan Patriotic Union (PUK) created by Jalal Talabani. Until the middle of the 90-x their convergence did not occur, although this would have contributed to the Iran-Iraq war. On the contrary, in the beginning of the 80-x began fierce clashes between the armed units of the KWP and the KPS. Only after serious defeats of the Kurds from the Iraqi army did they enter into negotiations, divided the seats in the Kurdish parliament in 1992 and created a coalition government. But this did not lead to the cessation of the struggle between the two Kurdish associations. For a long time, there were actually two governments in Iraqi Kurdistan, and only at the end of 2002 did they manage to form a single cabinet of ministers.
The military operation 2003 of the year brought certain separatist sentiments to the Kurdish movement. The Kurds became the main pillar of the American policy of creating a provisional government in Baghdad and developing a new constitution that contributed to the politicization of communal particularism. In accordance with this fundamental law of Iraq, which laid the legal basis of a federal decentralized state, the process of formation of higher authorities in Iraqi Kurdistan (capital - Erbil) began. The election of 2009 to the local parliament ended in victory for the ruling alliance formed by the KDP and the PUK, but this did not solve the Kurdish problems. Internal political contradictions associated with the many years of confrontation between the two parties and their leaders continued to persist. The socio-economic situation in the autonomy remained difficult, which caused unrest that began in January of the 2011 year.
Finally, one of the most important political problems was the dispute between Kurdistan and the Iraqi center over the territories in the north of the country - Kirkuk, Nineveh, Diala. Baghdad firmly opposes the expansion of the borders of the Kurdish Autonomous Region, and the Kurds are striving to include Kirkuk in the autonomy and its full submission to the power of Erbil. At the center of the dispute is the issue of the distribution of revenues from the sale of oil produced in Kurdistan, since the Kirkuk field discovered in 1907 is one of the largest in the world. It is no coincidence that it is here that terrorist acts on interethnic grounds have been increasingly occurring recently. The federal government is trying to deploy its troops in this area, which are met with resistance from the Kurdish guards - armed Peshmerga groups controlling the disputed territories.
Iraqi Kurdistan has its own constitution, government bodies, armed forces, over 30 foreign diplomatic missions are accredited in the region. According to the existing rules, the Kurdish government has the right to receive its part of the proceeds from the sale of oil produced in its territory, but all transactions for granting rights to the fields must be made through the central government - respectively, and part of the proceeds remains with Baghdad. However, immediately after the overthrow of Saddam Hussein, the Kurdish government began to conclude contracts regardless of the center, declaring itself to be an independent political force that pursues an independent domestic and foreign policy. In 2011, the largest player in the oil market, Exxon Mobil, decided to negotiate with Kurdistan, the example of which was followed by Chevron, who bought himself the right to participate in two projects near the city of Erbil. Baghdad responded immediately and deprived these companies of contracts in the rest of Iraq, but this did not stop the Americans. Already in 2012, the French Total SA announced the purchase of a share in Kurdish projects. Foreign oil producers were ready to lose big contracts in the southern and central parts of the country for the sake of positions in Kurdistan. This is due to the fact that autonomy created a favorable investment and tax regime, adopted legislation on natural resources and there are relatively safe conditions for foreigners to live.
Foreign companies (currently around 50) are actually working to ensure the increasing independence of Iraqi Kurdistan. This seriously complicates relations with Baghdad. In the spring of 2012, a scandal erupted - the authorities in the autonomy declared that the central government owed them more than half a billion dollars for exported oil. The Iraqi leadership recognized the debt, but explained it to the technical issues.
Kirkuk of contention
Against the background of the struggle for oil revenues, the question of the historical identity of Kirkuk, which has acquired fundamental importance, began to be actively discussed. In June 2009, the government of Kurdistan approved a draft of a new regional constitution, according to which this city was incorporated into the autonomous region. At the same time, the controversy surrounding it is part of the ongoing debate about Kurdish independence, which intensified during the so-called Arab Spring. Iraqi Kurdistan’s President Massoud Barzani harshly criticized the activities of the central government and said that the joy of declaring Kurdistan’s independence is not far off, but this will be done at a suitable time for the Kurds. The activity of Iraqi Kurds, aimed at consolidating the entire ethnic group in the region (primarily in Turkey and Syria), increased significantly after the Americans refused to support the efforts of autonomy aimed at creating an independent state.
Arabs, Turkmen, and Turkey, which positions itself as a regional power and fights with any manifestations of Kurdish nationalism, are categorically against the transfer of Kirkuk to the Kurds. Joining this city to autonomy will mean increased economic independence and territorial self-sufficiency of Kurdistan. This cannot be allowed by Ankara, which for a long period (from the middle of the 20-s) was forced to put up with the loss of the Mosul vilayet.
Meanwhile, Turkey continues to develop relations with the central government and with the autonomous Kurdish region, and Turkish companies and investors have begun to actively penetrate the region. At the same time, Ankara gained the support of Iraqi Kurds and achieved recognition that the rights of Turkish Kurds should be exercised exclusively within the framework of a unified Turkey.
The political controversy between Baghdad and Erbil became sharply aggravated after the visit of Kirkuk’s August Foreign Minister Ahmet Davutoglu to 2012 in August. The event was covered as a historic visit - the first such high-ranking Turkish official in the last 75 years. The Iraqi Foreign Ministry spoke out strongly against this trip to the disputed city, describing it as a violation of Iraq’s sovereignty. Iraqi Prime Minister Nouri al-Maliki indicated that Turkish intervention in the affairs of his state would open doors to other governments and put the whole country in a difficult situation. At the same time, he assured: the Iraqi authorities will not allow the continuation of this practice of the Turkish leadership.
Diversification of Russian partners
Amid the crisis in relations between the central government of Iraq and Kurdish autonomy, Erbil is actively pursuing a policy of strengthening its economic independence. This is facilitated by the provisions of the Iraqi constitution, which gives Kurds broad powers to resolve both political and oil issues, as well as the regional law on hydrocarbons, allowing the authorities to enter into contracts with foreign investors. In December 2012, the Kurdish government’s prime minister announced that Iraqi Kurdistan is an important part of the world energy map and plans for developing export routes in the near future. This was confirmed by the start of construction of the oil pipeline to Turkey, bypassing the federal authorities and constitutional provisions.
These internal political contradictions of Iraq are currently seriously complicating Russian-Iraqi cooperation. The Kurdistan leadership tried to put pressure on the government of Nuri al-Maliki to revise the agreement with Russia and the Czech Republic on the supply of arms to Iraq. This is due to the serious fears of the Kurds that this weapon may be directed against autonomy, which, apparently, does not exclude military conflict with Baghdad over Kirkuk. To this are added significant political (ongoing ethno-confessional opposition) and legal risks for foreign companies, due to the fact that the rule of law in Iraq has not developed, and the laws regulating the activities of foreign capital and investments are not yet fully developed.
The official visit of the Iraqi Prime Minister to Moscow in the autumn of 2012 shows the gradual strengthening of economic relations between the two countries. A major breakthrough was the contract for the supply of Russian arms and technology to Iraq for an amount in excess of four billion dollars (30 attack helicopters Mi-28H, 42 anti-aircraft missile-gun complex "Pantsir-S1"). In addition, negotiations began on the acquisition of MiG-29M fighters, heavy armored vehicles, radar and other equipment.
This is the first official contract in this area after the overthrow of the regime of Saddam Hussein, for which the Soviet Union was the main supplier of weapons. It marked a serious turn in Iraq’s foreign policy, as it outlined Iraqi priorities in this most important strategic area, where Russia traditionally competes with the United States. During his official visit, Nouri al-Maliki emphasized that Russia has always been one of the closest friends of Iraq and Baghdad regards Moscow as a partner with whom it is united by common interests and goals. Now such a common goal has become the situation in Syria, about which the Iraqi side has taken a firm stand. The Prime Minister of Iraq, even during the next summit of the League of Arab States (LAS), held in Baghdad in March 2012, made it clear that he was not interested in changing Assad's regime. In the Russian capital, he said: Iraq supports the Syrian people in their struggle for freedom and democracy, but at the same time stressed that it was decided “not to be the kind of firewood that burns in the Syrian fire.” It is clear that this position is significantly at odds with the one-sided approach to the issue of Syria, proposed by the West, with the position of which until recently was associated with the official policy of Iraq. The visit of Nuri al-Maliki to Moscow, of course, should not be considered as the actual surrender of Washington’s Baghdad "to its irreconcilable strategic rivals - Russia and Iran", but the establishment of closer political contacts (which are inevitable due to the fact that Russian instructors and technical specialists will go) can be considered as a big political victory for Moscow.
As for cooperation in the oil sector, Russian companies are gradually entering the Iraqi hydrocarbon market, although they are faced with serious competition from major European and American companies fighting for the right to develop new fields. Despite the fact that in 2008, Russia wrote off more than 90 percent of the national debt to Iraq, LUKOIL did not receive the preferences promised to it for developing the West Qurna-2 project.
Immediately after the visit of the Prime Minister of Iraq to Moscow, Kurdistan’s President Masood Barzani also received an official invitation to visit the Russian capital. Knowing the negative reaction of the Iraqi government to this, one can assume: Russia, fearing that it may be difficult to approve the arms contract by the Iraqi President, Kurd Jalal Talabani, and because of the separatist sentiments of the Kurds, headed for diversifying economic partners.
Such an official visit - the first in the history of relations with Kurdistan - took place on February 19 – 23 on 2013 of the year. At a bilateral meeting, the interaction potential between Gazprom and the oil and gas companies of Kurdistan in the field of development and exploitation of hydrocarbon deposits was examined (OAO Gazprom Neft has already concluded contracts with Erbil). And soon after the visit, the first deputy general director of Gazprom Neft Vadim Yakovlev said that the company entered into a new project under the terms of a production sharing agreement in the Kurdish autonomy with a share of 80 percent. Does this mean that the green light has been given to other Russian oil producers to make a choice in favor of Kurdistan? The question is complex: receiving certain dividends in the north of Iraq, they risk losing their positions in other areas of Iraq (about 15 hydrocarbon development contracts) and the confidence of the central government that has been hardly restored. For Moscow, the positive dynamics of relations with Baghdad in the field of military-technical cooperation and similar positions on the Syrian conflict are very important now. Moreover, the full decentralization of Iraq is not at all beneficial to Russia, since its consequences could adversely affect the situation in the Caucasus.
Nevertheless, the first visit of the President of Iraqi Kurdistan to Moscow shows that the Russian leadership significantly expands the field for its political and economic maneuver and enters a difficult game, where the promotion of foreign policy interests often does not coincide with the laws of business, and the national policy contradicts the dynamics of regional relations . Therefore, this visit can be interpreted as an attempt to press Turkey from the Kurdish "oil field" and partly bring the north of Iraq out of Turkish influence, which coincides with the interests of the federal government.
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