Home
Key political risks to watch in Iraq
Published Date: December 04, 2011
BAGHDAD: The US troop withdrawal, recent bombings by militants and an arrest campaign against former members of Saddam Hussein's banned Baath Party have sharpened tensions in Iraq. A decision by Exxon Mobil to venture into semi-autonomous northern Kurdistan set up a confrontation between the world's largest publicly traded oil company and the central government, which threatened to cancel Exxon's southern oilfield deal.
The Exxon exploration pact could push ongoing disputes between Baghdad and the Kurds to new heights just as the remaining 12,000 American troops leave Iraq, increasing anxiety in the disputed territories, already a potential faultline for future conflict when the buffer of US forces is gone. US President Barack Obama's announcement on Oct 21 that the remaining US troops would be home for the holidays kicked into high gear a withdrawal that dawdled as Washington and Baghdad talked about keeping several thou
sand in Iraq past the Dec 31 deadline.
The two sides were unable to agree on legal safeguards for US forces if they stayed. The prospect appeared unpalatable to Iraq's fractious political blocs, uncertain of what the public response would be and pressured by a threat from powerful anti-American cleric Moqtada Al-Sadr to revive his militia if they stayed. While violence has fallen since the worst days of sectarian conflict in 2006-2007, bombings, assassinations and other attacks by Sunni Islamist insurgents and Shiite militias still occur daily
and scores of people are killed every month.
US disengagement could worsen sectarian differences and meddling by neighbors, including Shiite Iran and Sunni Saudi Arabia. By the end of December-nearly nine years after the US-led invasion that toppled Sunni dictator Saddam Hussein- only a small contingent of civilian trainers and fewer than 200 US military personnel attached to the US embassy will remain. Multibillion-dollar deals Baghdad signed with energy majors that could quadruple oil output capacity in six years and power Iraq into oil's big league are moving ahead only slowly.
Increased production would give Iraq the money it needs to rebuild, but everything depends on whether the OPEC member can secure oilfields, refineries and other vital infrastructure. Iraq is isolated from world markets. Only a few dozen firms are listed on the stock exchange. Iraq's dinar is thinly traded and the exchange rate is effectively determined by the central bank in its dollar auctions. Below are some of the major risks facing Iraq.
THE US PULLOUT
US troops are headed for the exits. A steady stream of troops and equipment has choked the southern route to Kuwait in recent weeks. Troops have handed over most of their major bases, including the Victory headquarters complex in Baghdad, and consolidated operations on a handful of bases which are being steadily handed back to the Iraqi government. Prime Minister Nuri Al-Maliki has said his army and police can handle internal security. But military commanders and some Iraqi soldiers say US troops are still needed next year to train weak air and naval defenses.
Baghdad has signed a deal to buy 18 F-16 warplanes in a move that will further strengthen military ties, but the jets will not be delivered for years. Baghdad and Washington have yet to negotiate any new defense agreement but analysts say it is likely the US military will step in to protect Iraq's vulnerable airspace from incursions.
Keeping US forces in Iraq had risked upsetting anti-American Shiite Moqtada Al-Sadr, whose militia fought US and Iraqi troops after the 2003 invasion. Sadr's political movement overcame its antipathy towards Maliki to become a kingmaker for the prime minister last year. Sadrist protesters flexed their muscles this week in Baghdad, Basra and elsewhere as US Vice President Joe Biden visited Iraq to mark the start of a new diplomatic relationship.
KURDISH-ARAB CONFLICT
Tension between Arabs and minority Kurds, who have enjoyed virtual autonomy in their northern enclave for 20 years, is festering. US military officials have long considered the northern disputed territories a potential flashpoint for conflict after US troops withdraw. Kurds hope to reclaim areas they deem historically Kurdish and their peshmerga troops briefly surrounded the disputed city of Kirkuk in February in a show of force.
While Kurdish leaders celebrated the announcement last month of a new contract for six exploration blocks with Exxon Mobil, the first major to move into the region, Baghdad fumed. The central government claims rights over Iraq's world-class oil reserves and deems contracts with the Kurdish government illegal. It threatened to void Exxon's contract to develop the rich West Qurna Phase One oilfield in the south.
The oil ministry has demanded an explanation from Exxon, which is also the lead developer on a key, multi-company water injection project meant to boost production in southern fields. Baghdad and Arbil have been at odds for years over control of Kurdish oil. The Exxon deal came in the midst of some small signs of progress, including an agreement between Maliki and Kurdish Prime Minister Barham Salih to present a new oil law, possibly a modified version of a 2007 draft agreed by all the political blocs, to
parliament by year-end. The Kurds are key allies of Maliki in his frail coalition government. Some officials have suggested that Kurdish support for the premier could be at stake in the oil law talks.
A SURGE IN VIOLENCE
US and Iraqi military leaders predicted a possible surge of attacks as American troops withdraw and militants try to undermine the government. Despite improvements, Iraq remains vulnerable to Sunni insurgents and Shiite militias, which launch scores of bombings and other attacks every month. According to government figures, 161 civilians died in violence in October, the highest toll of the year, along with 97 police and soldiers.
Political feuds, Sunni discontent or an attack on a holy site could rekindle violence. Armed groups are expected to increase assaults towards year-end as a way to show they are pressuring US troops. Attacks on oil facilities could push up global oil prices since Iraq has the world's 4th largest reserves. Recent attacks on southern oil facilities showed even areas considered safer can still be vulnerable. - Reuters
[You must be registered and logged in to see this link.]
Published Date: December 04, 2011
BAGHDAD: The US troop withdrawal, recent bombings by militants and an arrest campaign against former members of Saddam Hussein's banned Baath Party have sharpened tensions in Iraq. A decision by Exxon Mobil to venture into semi-autonomous northern Kurdistan set up a confrontation between the world's largest publicly traded oil company and the central government, which threatened to cancel Exxon's southern oilfield deal.
The Exxon exploration pact could push ongoing disputes between Baghdad and the Kurds to new heights just as the remaining 12,000 American troops leave Iraq, increasing anxiety in the disputed territories, already a potential faultline for future conflict when the buffer of US forces is gone. US President Barack Obama's announcement on Oct 21 that the remaining US troops would be home for the holidays kicked into high gear a withdrawal that dawdled as Washington and Baghdad talked about keeping several thou
sand in Iraq past the Dec 31 deadline.
The two sides were unable to agree on legal safeguards for US forces if they stayed. The prospect appeared unpalatable to Iraq's fractious political blocs, uncertain of what the public response would be and pressured by a threat from powerful anti-American cleric Moqtada Al-Sadr to revive his militia if they stayed. While violence has fallen since the worst days of sectarian conflict in 2006-2007, bombings, assassinations and other attacks by Sunni Islamist insurgents and Shiite militias still occur daily
and scores of people are killed every month.
US disengagement could worsen sectarian differences and meddling by neighbors, including Shiite Iran and Sunni Saudi Arabia. By the end of December-nearly nine years after the US-led invasion that toppled Sunni dictator Saddam Hussein- only a small contingent of civilian trainers and fewer than 200 US military personnel attached to the US embassy will remain. Multibillion-dollar deals Baghdad signed with energy majors that could quadruple oil output capacity in six years and power Iraq into oil's big league are moving ahead only slowly.
Increased production would give Iraq the money it needs to rebuild, but everything depends on whether the OPEC member can secure oilfields, refineries and other vital infrastructure. Iraq is isolated from world markets. Only a few dozen firms are listed on the stock exchange. Iraq's dinar is thinly traded and the exchange rate is effectively determined by the central bank in its dollar auctions. Below are some of the major risks facing Iraq.
THE US PULLOUT
US troops are headed for the exits. A steady stream of troops and equipment has choked the southern route to Kuwait in recent weeks. Troops have handed over most of their major bases, including the Victory headquarters complex in Baghdad, and consolidated operations on a handful of bases which are being steadily handed back to the Iraqi government. Prime Minister Nuri Al-Maliki has said his army and police can handle internal security. But military commanders and some Iraqi soldiers say US troops are still needed next year to train weak air and naval defenses.
Baghdad has signed a deal to buy 18 F-16 warplanes in a move that will further strengthen military ties, but the jets will not be delivered for years. Baghdad and Washington have yet to negotiate any new defense agreement but analysts say it is likely the US military will step in to protect Iraq's vulnerable airspace from incursions.
Keeping US forces in Iraq had risked upsetting anti-American Shiite Moqtada Al-Sadr, whose militia fought US and Iraqi troops after the 2003 invasion. Sadr's political movement overcame its antipathy towards Maliki to become a kingmaker for the prime minister last year. Sadrist protesters flexed their muscles this week in Baghdad, Basra and elsewhere as US Vice President Joe Biden visited Iraq to mark the start of a new diplomatic relationship.
KURDISH-ARAB CONFLICT
Tension between Arabs and minority Kurds, who have enjoyed virtual autonomy in their northern enclave for 20 years, is festering. US military officials have long considered the northern disputed territories a potential flashpoint for conflict after US troops withdraw. Kurds hope to reclaim areas they deem historically Kurdish and their peshmerga troops briefly surrounded the disputed city of Kirkuk in February in a show of force.
While Kurdish leaders celebrated the announcement last month of a new contract for six exploration blocks with Exxon Mobil, the first major to move into the region, Baghdad fumed. The central government claims rights over Iraq's world-class oil reserves and deems contracts with the Kurdish government illegal. It threatened to void Exxon's contract to develop the rich West Qurna Phase One oilfield in the south.
The oil ministry has demanded an explanation from Exxon, which is also the lead developer on a key, multi-company water injection project meant to boost production in southern fields. Baghdad and Arbil have been at odds for years over control of Kurdish oil. The Exxon deal came in the midst of some small signs of progress, including an agreement between Maliki and Kurdish Prime Minister Barham Salih to present a new oil law, possibly a modified version of a 2007 draft agreed by all the political blocs, to
parliament by year-end. The Kurds are key allies of Maliki in his frail coalition government. Some officials have suggested that Kurdish support for the premier could be at stake in the oil law talks.
A SURGE IN VIOLENCE
US and Iraqi military leaders predicted a possible surge of attacks as American troops withdraw and militants try to undermine the government. Despite improvements, Iraq remains vulnerable to Sunni insurgents and Shiite militias, which launch scores of bombings and other attacks every month. According to government figures, 161 civilians died in violence in October, the highest toll of the year, along with 97 police and soldiers.
Political feuds, Sunni discontent or an attack on a holy site could rekindle violence. Armed groups are expected to increase assaults towards year-end as a way to show they are pressuring US troops. Attacks on oil facilities could push up global oil prices since Iraq has the world's 4th largest reserves. Recent attacks on southern oil facilities showed even areas considered safer can still be vulnerable. - Reuters
[You must be registered and logged in to see this link.]
