The central government and the Kurdish authorities have signed a secret deal under which the Kurds are to extend their political autonomy over their oil riches, a senior member of parliament said. Jaber Khaleefa of the parliament’s Oil and Gas Committee said the secret deal has allowed both sides to proceed ahead with contracts with foreign firms despite the lack of constitutional backing. The parliament has failed to pass a draft and oil and gas law drawn to regularize the exploitation of the country’s oil wealth and the distribution of sales proceeds.
The draft has failed to draw the minimum majority necessary to turn it into law. Opponents hoped that no concessions or deals with foreign firms would be made as long as it was not ratified. But the sides have been signing deals despite the lack of necessary constitutional arrangements. The Kurds have signed 17 such deals and the government has struck 35. The parliament is asking for an oversight but the opponents lack the two-thirds majority needed to stop the deals.
As the flurry of oil development contracts goes, the sides have ratcheted up criticism of each other’s polices, apparently to detract criticism of their secret dealings, according to the legislators, who only spoke on condition of anonymity. Kurdish authorities have branded central government’s deals as illegal while the central government says Kurdish deals are null and void.
Oil analysts say the oil contract rush and counter accusations signal lack of confidence, transparency and the existence of central authority in the country.
Oil development conditions are “very encouraging” in a country with reserves that are among the world’s largest, said one analyst. The situation has encouraged other regions to mull signing their oil deals with foreign firms. The analyst said foreign firms, with their own intelligence, were sending mixed signals to Iraq.
He said there were signs that some of the firms with deals with the central government in Baghdad had approached the provincial authorities in the southern city of Basra for separate contracts. Iraq’s most prolific oil fields are situation in the province which is also home to some of the largest, yet undeveloped, fields in the world.
