Conflict over Kirkuk oil returns

On March 2, a military force affiliated with the Patriotic Union of Kurdistan (PUK) led by former President Jalal Talabani seized the North Oil Company in Kirkuk province. The military force said the move was a warning for Baghdad to stop the export of the city's oil to other cities and to start establishing a refinery in the city. The military force halted the export of oil for a brief period.

This event is linked to an agreement concluded Aug. 19, 2016, between the central government and the Kurdistan Regional Government (KRG). The agreement said that 150,000 barrels of oil will be equally exported from Baghdad and Erbil and that the proceeds will be shared. The agreement said that the KRG will export its oil through the Kurdistan pipeline to the Turkish port of Ceyhan and will refine the oil through its Kar Oil Company.

However, the PUK did not applaud this agreement; Hero Ibrahim Ahmed, the wife of Jalal Talabani, sent a letter to Iraqi Prime Minister Haider al-Abadi on Sept. 8, 2016, stating, “The proceeds of the oil exported from Kirkuk are not being spent transparently and fairly in the Kurdistan region. These practices have denied Kirkuk its petro-dollar dues, which negatively affected the lives of the Kirkuk citizens.”

After the Baghdad government failed to respond to the PUK demands to stop the implementation of the agreement, Kurdish forces took control of the oil facilities in Kirkuk in an attempt to rearrange the oil accord by force, as per Kirkuk PUK member of parliament Mohamed Osman. Osman told Al-Monitor, “The recent military action taken by a force affiliated with the PUK was supported by Kirkuk’s political parties. The governments in Baghdad and Erbil have deprived Kirkuk of its rights."

He pointed out that “the province’s administration and its sects wanted the payment of oil proceeds [that have been] withheld by the central government, the creation of job opportunities and the inclusion [of Kirkuk] in investment plans similar to other provinces.”

Osman pointed out that during his recent visit to Sulaimaniyah on March 7, Abadi promised that the PUK demands would be met. Changes on the ground are yet to materialize.

The new agreement stipulates that the PUK will abandon its threat to close the pipeline after the Iraqi government increases the production capacity of the Kirkuk oil refinery to 40,000 barrels per day. However, the crisis will not stop at this point, given the historical conflict between the Kurdish PUK and Kurdistan Democratic Party (KDP) over control of the Kurdish region territory and its resources, according to Ihsan al-Shammari, a political science professor at the University of Baghdad.

Shammari added, “The real dispute is between the Kurdish parties, not with Baghdad, which has concluded an agreement to solve the Kirkuk oil issue with the Kurdish government in Erbil [controlled by the KDP led by Massoud Barzani]. With the [coming] end of the war with the Islamic State, differences began to surface more clearly.”

He added, “The political crisis in the Kurdistan region is preventing the Kurdish parties from taking a unified position on the outstanding issues with Baghdad, particularly with regard to the disputed regions, oil and the general budget.”

The crisis experienced by the region since 2015 can be boiled down to the constitutional vacuum that was created with the end of Barzani’s mandate, the fact that new presidential elections have not been held and the paralyzing of the Kurdistan parliament, which led to a major political dispute between the KDP (Erbil) on the one hand and the PUK and the Movement for Change (in Sulaimaniyah) on the other. The conflict is still going on.

Shammari did not rule out that political parties in Baghdad can be quick to take advantage of the internal Kurdish differences. He is also expecting there to be conflicts not relating to oil but to the management of the areas liberated from the Islamic State (IS).

The Kurdish parties do not seem ready to enter into a direct confrontation yet or to discuss a way to resolve the differences. Talabani’s PUK party blames the central government for the oil agreement between Baghdad and Erbil. Meanwhile, Barzani’s KDP party, which described the control of the North Oil Company as “provocative,” accused former Prime Minister Nouri al-Maliki of “fabricating the Kirkuk oil crisis.”

KDP member of parliament Birwan Kilani said in a statement March 6, “Maliki was and still is seeking to thwart and weaken Abadi and hand over Iraqi provinces such as Ninevah to IS in order to achieve political and personal interests and fuel sectarianism and nationalism.”

She pointed out that Maliki is seeking to divide and weaken the Kurds, ignite a civil war and lead them to shed blood in order to gain power in the next elections.

Kilani’s statement might be based on the strong relationship between Talabani’s party and the Sulaimaniyah parties on the one hand and the Shiite circles in Baghdad on the other in light of Maliki’s visit July 19, 2016, to Sulaimaniyah. That visit stirred up a huge controversy among the Kurdish political parties, especially after Erbil accused Maliki of stopping the payment of Kurdistan staff salaries and imposing strict economic policies on the Kurds.

It is worth recalling that Baghdad only concluded an oil sharing agreement on Kirkuk crude with Erbil due to the unstable security situation in the south of the province and due to IS’ control of Hawija and nearby areas. Should these be liberated, the central government would return to transporting Kirkuk oil for export from Iraq's southern ports and would again control the Kirkuk oil export and extraction process. This would be opposed by the KRG, which would seek to export the Kirkuk oil without going through the central government.