Sunday 21 July 2013

Kurdistan's Independent Energy Contracts and the US Discontent

Hiwa Zandi       
June 16, 2013

1. Introduction

The United States’ government has expressed discontent with the oil development deal reached between Iraqi Kurdistan, Turkey and Exxon Mobil. Under the deal, Kurdish oil is planned to reach international markets through construction of oil pipelines passing through Turkey and ending at the Mediterranean shores. The deal has been struck without the Iraqi government’s approval.

The US opposition, however, is not congruent with its economic and political engagements in the region. The opposition comes at a time when its oil giants Exxon Mobil and Chevron are already involved in energy developments in Iraqi Kurdistan. These companies will loss potentially significant benefit should they be forced to abandon their operation in Iraqi Kurdistan.

On political fronts, the US is pursuing a grant strategy in the region. This grant strategy envisions changing the political dynamic of the region with an inevitably potential Kurdish power consolidation. The rising Kurdish political power can already be seen in South, North and Western parts of Kurdistan. These inevitable consequences are benign within the US strategic calculations. The US shares strategic economic, political and security interests with an emerging independent Kurdistan. These shared interests originates with the US and Kurdistan being reliable allies in driving future political and security environment in the region that is both peaceful and western friendly. Both sides have mutual interest in neutralising Islamic extremism that poses threat to Kurdish Statehood aspirations and the Western States security interests including that of Israel. 


  
Therefore, in the long-term, Kurdish power consolidation is inevitably an integral part of the US political strategy in the region. However, in the short-term, this political convergence does seem to be fomenting.

2. the US Opposition 

Turkey’s recent high ranking officials visit to the US sheds light on the US policy in opposing the oil deal. The Turkish Prime Minister Erdogan and his Ministers held meetings with the US officials to obtain US approval for the oil deal. The Turkish Minister for Energy and Natural Resources Taner Yildiz revealed that the US government is concerned with Turkey’s State level involvement in the oil and gas developments in Iraqi Kurdistan. The Minister criticised the US opposition at a time when there are already 19 countries and 39 companies involved in the oil development in Iraqi Kurdistan. He stressed "how could it be that the Iraqi constitution is not violated by those countries but by Turkey" [1].

These negotiating points of dispute between the American and Turkish officials lead us to make some inferences about the reasons behind the US opposition to the oil deal:

2.1. Disintegration of Iraq

Firstly, the US government is concerned with the disintegration of Iraq and formation of an independent Kurdistan in the near future as it may lead to further political turmoil. The perception is that if the energy deal proceeds, Iraqi Kurdistan will achieve economic independence. Kurdistan will consolidate its political status by engaging in State level crucial economic dealings independent of Baghdad. Kurdistan will achieve sufficient political and economic power on practical ground to transform its de facto independence to a de jure status in the near future. The US opposition therefore reflects the US government’s disapproval of a de jure independent Kurdistan at least at the near future.

From the US government’s perspective, creation of an independent Kurdistan at this time amidst the instabilities in the region may backlash against its strategic planning in the region. This view is expressed on the backdrop of Iraq’s current political and sectarian strife. The Sunni and Shia disputes and infighting in Iraq has resulted in extensive political turmoil. While both sides have conflicting interests on the political landscape of Iraq,
www.ekurd.net they share similar views and political interests in maintaining Iraq’s territorial integrity and constraining Kurdistan’s separation. Therefore, the division of Iraq and separation of Kurdistan would add to the already unstable political circumstances of Iraq. This would undermine the US justification for intervening in Iraq in order to bring peace and stability to the region rather than opening the Pandora’s Box and create further conflict and instability.

At the same time, there is a growing nuclear threat from Iran. This is combined with Iran led assertive Shia power posture in the region which poses considerable political and security threat to Israel and other Western States’ interests in the region. The conflict between the Assad regime, supported by Iran and Russia, and the Syrian opposition forces is not going to solve any time soon. The United States and Western States’ priority is dealing with these political and security concerns. Therefore, under these unstable political, religious and security circumstances, any development that leads to an independent Kurdistan may intensify instability in the region. The US in particular does not want to intensify political instability in Iraq.

2.2. Turkish Hegemonic Threat 

Secondly, the US may also be partly worried about the growing Turkish political and economic power in the region. The United States is apprehensive of the balance of power being shifted in favour of Turkey enabling it to act and adopt policies independently.

Turkey lacked economic power and resources to become an independent power in the region. It could not pursue its regional hegemonic aspirations. Turkey even lacked the capacity to strengthen its influence over the regional Turkic States.

The oil deal will provide Turkey with significant economic benefits. It will provide Turkey with significant revenue from the taxes or charges obtained from the oil transferred through its territory. More importantly, Turkey’s energy costs will be reduced at least by half. These and further future economic inroads into Iraqi Kurdistan will result in Turkey achieving significant economic power.[2]

Turkey would be enticed to raise its political profile by more engagement in the region’s political affairs. Turkey will act to strengthen its cultural bonds with the Turkic States in the region. 


  
Therefore, having gained sufficient economic and political power, Turkey will be encouraged to pursue an independent political agenda in the region and change the balance of power in its favour.

The US would be alarmed by any shift in the balance of power that would endanger its strategic interests in the region. This could occur if Turkey consolidates its power and unlike cold war era pursues an independent political agenda in the region. It would be even more concerning if the current Turkish government with its Islamic roots pursues old Ottoman hegemonic aspirations. Therefore the US would oppose any political or economic development proceeding in this direction.

3. Conclusion

The United States’ government opposes the oil deal reached between Iraqi Kurdistan, Turkey and Exon Mobil because of two main reasons. Firstly, it may result in Iraqi Kurdistan proclaim independence in the near future that would bring further political instability to the region, especially to Iraq. Secondly, it has the potential of changing the balance of power in the region in favour of Turkey which may endanger the US strategic interests in the region.

[1]-http://www.worldbulletin.net/?aType=haber&ArticleID=109119
[2]-http://www.al-monitor.com/pulse/business/2013/05/turkey-and-exxon-explore-oil-in-iraqi-kurdistan.html
 


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