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Fighting Over Petro-Dollars:
Intra-Kurdish Rivalries Spill Into Iraqi Oil Trade

Shalaw Mohammed
Iraqi Kurdish politicians deny an incident involving armed men taking over oil company headquarters recently, has anything to do with political rivalry. But insiders say it does – and the problem is serious.
30.03.2017  |  Kirkuk
PUK forces at the entrance to the North Oil headquarters. (photo: Shwan Nawzad)
PUK forces at the entrance to the North Oil headquarters. (photo: Shwan Nawzad)

Who owns Kirkuk, the major northern city with the major oil resources? The authorities in Iraqi Kurdistan have always considered it part of their semi-autonomous region which meant that the question was long a subject of debate between the Kurdish and the federal government in Baghdad. Thanks to the security crisis caused by the extremist group known as the Islamic State, the Kurdish appear to have got their way, as their troops are now protecting the Kirkuk area, which has a big Kurdish population.

But now that Kirkuk appears as good as in Kurdish hands, it is clear there are also internal tensions between the Kurds themselves. The rivalry between the region’s two major political parties over Kirkuk was recently highlighted when, on March 2, armed men entered the headquarters of the Iraqi oil company, North Oil, in Kirkuk. The office is in charge of sending the oil produced in Iraqi Kurdistan to Turkey through the Ceyhan pipeline, from where it is exported to the rest of the world.

What some observers say this scrap comes down to, is that the KDP did a deal with the Iraqi government in Baghdad.

And the armed group stopped the oil from being transported for several hours, saying that they would remain until a dispute between Iraqi Kurdistan and the Iraqi Ministry of Oil in Baghdad was resolved. Shortly after noon, pumping of oil resumed.

A few days later, it appeared the situation had been resolved, with the Iraqi government agreeing to address the armed men’s issues.

On the surface, it seemed that it was the same old gripe, with Iraqi Kurdistan saying that Baghdad was not giving them enough return on oil produced in the northern region. But in reality this was also about an old gripe between the region’s two largest political parties, who basically share power in the region, splitting territory, military forces and parliamentary powers between them: the Patriotic Union of Kurdistan, or PUK, and the Kurdistan Democratic Party, or KDP.

The two parties have always wrangled over who controls the oil-rich territories in the region. Insiders say it is often discussed in private meetings but not necessarily mentioned in public.

And basically what some observers say this scrap comes down to, is that the KDP did a deal with the Iraqi government in Baghdad over Kirkuk’s oil, even though Kirkuk is generally considered as part of the PUK’s realm of influence.

The deal involved additional facilities to refine Iraqi Kurdish oil, but the refinery was to be located in Erbil, which the KDP controls. The PUK didn’t like this because it felt that additional refinery facilities for oil from Kirkuk should benefit the people in its territories.

“One of the points in minutes of a meeting signed by Iraq’s minister of oil and the governor of Kirkuk in January 2017 was that a new refinery should be created in Kirkuk,” Asso Mamand, a senior member of the PUK, responsible for the party’s activities in Kirkuk, told NIQASH. “But the oil ministry just did what was best for it and ignored Kirkuk’s interests.”

KDP forces on the road from Erbil to Kirkuk on March 10. Source: Facebook

Another PUK politician said that neither Baghdad nor the KDP in Erbil seemed to want to consider the needs of the people of Kirkuk.

In a press conference in mid-March, Kirkuk’s governor, Najmuddin Karim said his authority would be discussing the minutes of the January meeting with authorities in Baghdad again.

However the armed men who entered the offices of North Oil had nothing to do with any internal political conflict between Kurdish parties, the KDP’s Mamand insisted.

Despite this, the KDP was clearly worried. Seven days after the North Oil incident, the head of the KDP, Massoud Barzani, dispatched military forces to the important Bai Hassan oil field, west of Kirkuk. KDP forces have been in charge of security at the Bai Hassan field since July 2014, shortly after the extremist Islamic State, or IS, group took control of the nearby, northern city of Mosul. The soldiers providing the security are from the so-called Oil Protection Force, tasked with providing security to all oil fields in the region – but most of its members are from the KDP.

“Barzani did tell us he was concerned about the PUK force taking control of the North Oil headquarters,” a senior member of one of the Kurdish military told NIQASH, speaking under condition of anonymity because he was not allowed to comment on the matter.  But, the commander added, he had no idea whether the decision was political in any way.

In fact, almost every senior politician denies that there was any inter-Kurdish conflict around the Kirkuk oil.

“The goal of all of the Iraqi Kurdish military is to protect all of Kirkuk,” Kamal Karkouki, a senior member of the KDP, told NIQASH. Even if the KDP sends extra troops to Kirkuk, this is just because they are going to help fight in IS-held terrain in Hawija.

Although all official sources deny that the PUK and KDP are tussling over Kirkuk’s oil, observers of the situation in Kirkuk do not believe them. They believe that each of the parties wants to have a say in the city that is often regarded as central to Kurdish identity.

“The KDP and the PUK need to develop plans together, before they go off to Baghdad,” says Ihsan Najim, a local political analyst and a former governor of Kirkuk before 2003. “They need to prevent military forces from getting involved in what are political issues and a war over the petrodollar,” he concludes.  

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