July 15,2014
LONDON — Along the desert horizon around Kirkuk, the bright flares from oil wells puncture the summer haze.
An estimated 4 percent of known global oil reserves lie beneath these sands. It is a prize that Iraq’s Kurds, and its other ethnic and tribal groups, have long sought to control.
The Kurds’ opportunity came Friday, when their Peshmerga fighters seized the Kirkuk and Bai Hassan oil fields.
The Kurdistan Regional Government’s Minister for Natural Resources says the Kurds will be self-sufficient by the end of the year.
“We will be free with our own revenue as opposed to being under the thumb of dictators in Baghdad,” said Ashti Hawrami.
Baghdad insists all oil revenue should be channeled through the central government. This year it withheld part of the state budget after the Kurds began exporting oil via Turkey.
But with new oil fields under their control, the Kurdistan Regional Government or KRG has plans to expand production.
“There are plans for a larger refinery in Dohuk and a couple of smaller ones, an expansion of another one in Bazian, and those are actually, the Bazian (refinery) is under construction along with a couple of others for, let us say, lighter oil or condensate oil,” Hawrami said.
The problem will be finding the right buyers, says energy consultant Valérie Marcel of policy group Chatham House.
“Taking Kirkuk or KRG’s own exports, then the difficulty is more one of sovereignty, disputed oil," Marcel said. "So then really the problem is that likely potential buyers will not buy because they would be excluded from Iraq export sales in the future. So it would be too risky for them, for the classic purchasers.”
A new pipeline linking Kirkuk to Kurdistan’s own network and on to Turkey opened in May. The KRG says it hopes to export 400,000 barrels of oil per day by 2015, a potential game changer.
“The opening of the pipeline from Kurdistan to Turkey is really groundbreaking because it really does enable Kurdistan to turn away from Baghdad, to turn away from the Middle East proper, and towards Turkey and Europe," Marcel said. "And that opens all sorts of doors.”
In his modest house in Erbil, Omar Hassan Mawlood, 62, a former Peshmerga fighter, watches the historic events unfold on television. he Kurds have long claimed Kirkuk is part of their ancestral homeland, and like many Kurds, Mawlood is ready to fight for it.
"In 1991, when the Iraqi army came from here to invade Kirkuk, I was there,” he said, adding that he is ready again to sacrifice himself, his blood, and his family if the Peshmerga needs him.
Amid the turmoil in Iraq, the Kurds sense an opportunity. Its rulers see the oil fields of Kirkuk as the economic foundation of a future Kurdish state.