{"id":334,"date":"2007-09-17T07:08:15","date_gmt":"2007-09-17T11:08:15","guid":{"rendered":"http:\/\/profcutler.com\/wordpress_blog\/?p=334"},"modified":"2007-09-17T07:08:15","modified_gmt":"2007-09-17T11:08:15","slug":"hunt-for-iraqi-oil","status":"publish","type":"post","link":"https:\/\/profcutler.com\/wordpress_blog\/?p=334","title":{"rendered":"Hunt for Iraqi Oil"},"content":{"rendered":"
At first blush<\/title>At first blush, the <a href=\"http:\/\/www.dallasnews.com\/sharedcontent\/dws\/bus\/stories\/DN-huntdeal_11bus.ART0.State.Edition1.363542e.html\"> announcement of a deal<\/a> between the Hunt Oil Company and the Kurdistan Regional Government seemed easy to dismiss.<\/p>\n<p>Other small, independent companies like <a href=\"http:\/\/www.iht.com\/articles\/ap\/2007\/05\/16\/business\/EU-FIN-Norway-Iraq-Oil.php\"> the “tiny” Norwegian oil firm DNO<\/a> had made similar moves to skirt the central government in Baghdad and court the Kurds.<\/p>\n<p>In the past, such deals have <a href=\"http:\/\/www.rigzone.com\/news\/article.asp?a_id=44417\">drawn fire from the Iraqi Oil Minister Hussein al-Shahristani<\/a> and the Hunt deal was no exception.\u00c2\u00a0 Shahristani lost no time declaring the Hunt deal “illegal.”<\/p>\n<p>Shahristani’s resistance to autonomous Kurdish oil development also seemed to mirror Bush administration policy.<\/p>\n<p>As I noted in <a href=\"https:\/\/profcutler.com\/wordpress_blog\/?p=166\">a previous post<\/a>, Bush himself seemed to <a href=\"http:\/\/www.foxnews.com\/story\/0,2933,221501,00.html\">rule out Kurdish autonomy back in October 2006<\/a>.<\/p>\n<p>And the <em>Wall Street Journal<\/em> (subscription required; third party <a href=\"http:\/\/www.zawya.com\/Story.cfm\/sidDN20070910015369\/secIndustries\/pagOil%20&%20Gas\"> link<\/a>) reported that the State Department put cold water on the idea of signing side deals with the Kurds (Neil King Jr., “Hunt Oil, Iraqi Kurds Defend Deal Despite U.S. Concern,” September 11, 2007, A17).<\/p>\n<blockquote><p>A senior State Department official said the move had taken the U.S. \tgovernment by surprise. Earlier this year, the official said, the State \tDepartment sat down with major U.S. oil companies “to say that it was <strong>not \ta good idea to cut oil deals with the Kurdish regional government<\/strong>.”<\/p>\n<p>The official said that the message “was basically informal” and that the \tBush administration had no leverage to block such deals.<\/p><\/blockquote>\n<p>And Condoleezza Rice <a href=\"http:\/\/www.state.gov\/secretary\/rm\/2007\/09\/92036.htm\">didn’t exactly endorse the deal<\/a>.<\/p>\n<p>And yet…<\/p>\n<p>If Bush wanted to find “leverage to block” such a deal, he might have found it, in this instance, in the person of his good buddy, Ray L. Hunt.<\/p>\n<p>In his <em>New York Times<\/em> column, Paul Krugman was <a href=\"http:\/\/select.nytimes.com\/2007\/09\/14\/opinion\/14krugman.html?n=Top\/Opinion\/Editorials%20and%20Op-Ed\/Op-Ed\/Columnists\"> quick to point out<\/a> the depth of the relationship between Hunt and Bush:<\/p>\n<blockquote><p>Ray L. Hunt, the chief executive and president of Hunt Oil, is a close \tpolitical ally of Mr. Bush. More than that, Mr. Hunt is a member of the \tPresident\u00e2\u20ac\u2122s Foreign Intelligence Advisory Board, a key oversight body.<\/p>\n<p>Some commentators have expressed surprise at the fact that a businessman \twith very close ties to the White House is undermining U.S. policy.<\/p><\/blockquote>\n<p>Hunt is also <a href=\"http:\/\/www.dallasnews.com\/sharedcontent\/dws\/news\/localnews\/stories\/DN-smubush_17tex.ART.North.Edition1.4317303.html\"> reportedly the key force that initiated negotiations<\/a> to house the Bush administration library at <span class=\"vitstorybody\">Southern Methodist University.<\/span><\/p>\n<p><span class=\"vitstorybody\">The Hunt-Bush relationship certainly makes it more difficult to dismiss the Hunt Oil foray into Kurdistan.<\/span><\/p>\n<p><span class=\"vitstorybody\">Krugman reaches for the big interpretation:<\/span><\/p>\n<blockquote><p><span class=\"vitstorybody\">By putting his money into a deal with the \tKurds, despite Baghdad\u00e2\u20ac\u2122s disapproval, he\u00e2\u20ac\u2122s essentially betting that the \tIraqi government \u00e2\u20ac\u201d which hasn\u00e2\u20ac\u2122t met a single one of the major benchmarks Mr. \tBush laid out in January \u00e2\u20ac\u201d won\u00e2\u20ac\u2122t get its act together. Indeed, he\u00e2\u20ac\u2122s \teffectively betting against the survival of Iraq as a nation in any \tmeaningful sense of the term.<\/p>\n<p>The smart money, then, knows that the surge has failed, that the war is \tlost, and that Iraq is going the way of Yugoslavia. And I suspect that most \tpeople in the Bush administration \u00e2\u20ac\u201d maybe even Mr. Bush himself \u00e2\u20ac\u201d know this, \ttoo.<\/span><\/p><\/blockquote>\n<p><span class=\"vitstorybody\">That would put “partition” question back in play.<\/span><\/p>\n<p><span class=\"vitstorybody\">I am not so sure.<\/span><\/p>\n<p><span class=\"vitstorybody\">Does Bush have ties to Hunt?\u00c2\u00a0 Sure.\u00c2\u00a0 But is Hunt the best Bush can do?\u00c2\u00a0 He and Cheney don’t have ties to Big Oil?\u00c2\u00a0 Of course they do.\u00c2\u00a0 If the “smart money” is on the break-up of Iraq, where are the deals between the oil majors and the Kurdish Regional Government?<\/span><\/p>\n<p><span class=\"vitstorybody\">I think there is a different game being played here.<\/span><\/p>\n<p><span class=\"vitstorybody\">The central point of the Hunt affair is not to do the deal with the Kurds but to use the threat of such a deal to leverage concessions from political players in Baghdad who are holding up passage of the national hydrocarbons law.\u00c2\u00a0 I first made this argument back in <a href=\"https:\/\/profcutler.com\/wordpress_blog\/?p=165\">an October 2006 post<\/a>:<\/span><\/p>\n<blockquote><p><span class=\"vitstorybody\">I tend to think that the function of the \tpartition chatter has little to do with real options on the table and much \tmore to do with ongoing negotiations over the Iraqi hydrocarbons law that \twill govern relations with the oil industry.<\/p>\n<p>The US is firmly committed to centralized national control over the \tdevelopment of new oil fields. In this, they have the support of Sunni Arab \tpolitical forces along with nationalist Shiite forces in Southern Iraq, \tincluding those loyal to Moqtada al-Sadr.<\/p>\n<p>The threat of partition, however, is being used to pressure these Sunni and \tShiite forces to embrace particular oil policies that will be very unpopular \twith Iraqi nationalists, even as they are sought after by international oil \tmajors.<\/p>\n<p>The oil majors and the US are pressing for generous contract terms for \tforeign oil investment and use the threat of extremely generous regional \tcontract terms on offer in the Kurdish north to extract similar concessions \tfrom Iraqi nationalists. <\/span><\/p><\/blockquote>\n<p><span class=\"vitstorybody\">The <a href=\"http:\/\/ap.google.com\/article\/ALeqM5hULuqaWEV_bjkpRqbj2xDFJVn6OQ\"> Associated Press reports<\/a>, Hunt’s deal with the Kurds would be a “production-sharing contract,” offering the same kind of “generous” terms that the oil majors want from the hydrocarbons law.<\/span><\/p>\n<p><span class=\"vitstorybody\">The <a href=\"http:\/\/www.washingtonpost.com\/wp-dyn\/content\/article\/2007\/02\/26\/AR2007022600161.html\"> Maliki cabinet agreed<\/a> in February to sign on in support of the hydrocarbons law.<\/span><\/p>\n<p><span class=\"vitstorybody\">But Maliki apparently doesn’t yet have the parliamentary votes necessary to move the legislation through parliament.\u00c2\u00a0 The <a href=\"http:\/\/www.iht.com\/bin\/print.php?id=7492338\">latest reports<\/a> suggest ongoing wrangling.<\/span><\/p>\n<p><span class=\"vitstorybody\">The Hunt deal isn’t a vote of no confidence in Maliki.\u00c2\u00a0 It is a shot across the bow to those who are stalling on the hydrocarbons law but who also fear Kurdish autonomy.<\/span><\/p>\n<p><span class=\"vitstorybody\">In other words, the Hunt deal is meant to leverage parliamentary votes from the Sadrists and\/or the Sunnis.<\/span><\/p>\n<p><span class=\"vitstorybody\">Both favor centralized control and <a href=\"https:\/\/profcutler.com\/wordpress_blog\/?p=45\">Sadr is a fierce critic of Kurdish autonomy<\/a>.<\/span><\/p>\n<p><span class=\"vitstorybody\">Nevertheless, the Sadrists and the Sunnis have balked at various provisions of the hydrocarbons law, including the idea of production-sharing contracts.<\/span><\/p>\n<p><span class=\"vitstorybody\">Notwithstanding the specter of the Hunt deal, the Sadrists are, thus far, <a href=\"http:\/\/www.iht.com\/articles\/ap\/2007\/09\/17\/africa\/ME-GEN-Iraq-Politics.php\"> pushing back<\/a>.<\/span><\/p>\n<p><span class=\"vitstorybody\">Perhaps they understand two crucial points:<\/span><\/p>\n<p><span class=\"vitstorybody\">1) Bush is trying to use his friend Hunt–and the Kurds–to leverage concessions from Iraqi nationalists.<\/span><\/p>\n<p><span class=\"vitstorybody\">2) Bush is bluffing.<\/span><\/p>\n<p><span class=\"vitstorybody\">Ironically, it may actually help the White House in these negotiations for Sadrists and Sunnis in Baghdad to think Bush is all about cronyism and corruption–as if he might be just crazy enough to break up Iraq in order to help a friend make a fast buck.\u00c2\u00a0 Is that really a hard sell?<\/span><\/p>\n<p><span class=\"vitstorybody\">We’ll see whether anyone in Iraq buys the story.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>At first blushAt first blush, the announcement of a deal between the Hunt Oil Company and the Kurdistan Regional Government seemed easy to dismiss. Other small, independent companies like the “tiny” Norwegian oil firm DNO had made similar moves to skirt the central government in Baghdad and court the Kurds. In the past, such deals […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=\/wp\/v2\/posts\/334"}],"collection":[{"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=334"}],"version-history":[{"count":0,"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=\/wp\/v2\/posts\/334\/revisions"}],"wp:attachment":[{"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/profcutler.com\/wordpress_blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}