Late in the day day items .....
Analysis: Kurdistan Banking on Oil SalesBy Alexander Whitcomb 2 hours ago
Kurdistan Region's independent oil pipeline. Photo: Rudaw
ERBIL, Kurdistan Region— It’s no secret that Iraqi Kurdistan is running short on cash six months after Baghdad stopped sending money to the region, cutting off the region’s main source of revenue. Banking on oil sales to pay bills, Kurdish officials are leveraging newly expanded oil fields and diminished confidence in war-torn Iraq to draw financing from the international community.
Yesterday, Kurdistan Regional Government (KRG) Minister of Natural Resources Ashti Hawrami told Reuters that the region expects to export 1 million barrels per day by the end of 2015, including crude from Kirkuk.
Major fields in Iraq’s disputed territories — many of which are now under Kurdish control, including Kirkuk — are set to increase the KRG’s share of oil wealth and make the region even more lucrative to international investors.
One minor hurdle will be increasing its pipeline capacity, currently at 300,000 barrels per day. Energy experts estimate Kurdistan would need to export 450,000 barrels per day for oil revenue to match Kurdistan’s share of Iraq’s national budget.
The major caveat is that Hawrami promised any oil revenue would be shared with the central government, which has been locked in disputes with the autonomous region over hydrocarbon exports for years now.
There are two potential outcomes. The first is that the Kurdistan Region bargains with Baghdad and gains official permission for independent oil exports. The second is that no agreement is reached, and the KRG looks for down payments on future deliveries of oil international buyers. The latter would require buyers to bet against the resurgence of a strong Iraq by ignoring Baghdad’s warnings that Kurdish oil can only be purchased with the central government’s approval.
Before the Islamic State of Iraq and Syria (ISIS) took Mosul, Iraq filed for arbitration against Turkey and its state-owned pipeline for facilitating the sale of crude oil from Iraqi Kurdistan without Baghdad’s permission.
Although the case is not expected to be ruled on soon, Iraqi officials threatened to sue and blacklist any oil buyers who purchase without Baghdad’s permission, which would likely deny them future access to larger fields in southern Iraq. Until recently the tactic worked, leaving one tanker full of Kurdish oil stranded off the coast of Morocco.
Buyers seem to be less intimidated by Baghdad ever since militants captured Mosul, Iraq’s second largest city. The Iraqi military quickly crumbled in the face of a mounting insurgency, and it’s doubtful that many Sunni-dominated areas will be back in government control anytime soon.
According to Turkish and Kurdish officials, $200 million in revenue from Kurdish pipeline oil has now reached Turkey’s state-owned Halk Bank, although the buyers have not been announced. The first cargo has been offloaded in Israel, a country that would never recognize lawsuits from Iraq. The two countries have officially been at war since Israel’s creation in 1948.
In the absence of an agreement or international aid, the pace of Kurdish oil sales needs to accelerate. Baghdad hasn’t sent money to the KRG in six months, and $200 million doesn’t make a dent in the region’s mounting debts. Even the $3 billion in loans Hawrami claims the KRG has secured amount to less than half of what the federal government owes the region.
A day before the ISIS and their allies drove the Iraqi military out of Mosul, KRG spokesman Safeen Dizayee stated the region needed approximately $1 billion for the monthly budget.
Since then, several factors have dramatically increased spending. At least 300,000 refugees have arrived from Mosul, deepening a humanitarian crisis in a region already filled with refugees from Syria and Anbar.
The Peshmerga now must to protect a 1,000-kilometer border they share with ISIS and Baathist insurgents. The region has expanded by 40 percent now that the Peshmerga control the disputed territories, and the KRG must pay salaries, ensure basic services and offer security.
The Ministry of Finance has declined to comment on the budgetary crisis, but Gareth Stansfield, a former United Nations advisor to Iraq, estimates that these factors may have pushed monthly costs up to $1.5 billion. Despite the increase, he is optimistic that regional and international partners won’t let the KRG go broke.
According to Stansfield, the crisis “draws Turkey even closer to Erbil.” Turkey needs to ensure oil from Iraqi Kurdistan is exported for the sake of its own energy security, and Iraqi Kurdistan also serves as a territorial buffer against ISIS.
“The choice is relatively simple for the international community, and especially the Americans. They really want to protect Kurdistan and endure that it remains stable domestically,” Stansfield says. “The Americans need to give them $1.5 billion a month, or they let the money earn the money themselves at $100 million a tanker. It’s a difficult argument to push back on.”
Hague Appeals for Unity in Baghdad, as Maliki Turns to Syria and IranBy RUDAW 9 hours ago
UK Foreign Secretary William Hague confers with Iraqi Prime Minister Nouri al-Maliki. Photo: AFP
ERBIL, Kurdistan Region – UK Foreign Secretary William Hague made an urgent appeal for political unity in Baghdad against a jihadi blitz, but amid indications Iraq’s Shiite prime minister was turning to Iran and Syria in face of a Western reluctance for military involvement.
Hague’s unannounced visit came just as Prime Minister Nouri al-Maliki confirmed that Syrian warplanes had carried out border raids against the militants, who include the Islamic State in Iraq and Syria (ISIS).
The Sunni jihadis have captured cities and key installations, such as two border posts with Syria, since beginning their rampage about a fortnight ago. They vow to march on Baghdad to oust the Shiite government.
The Iraqi military has largely collapsed since the rebel advance began with the capture of Mosul, Iraq’s second-largest city. But as Hague prepared to go into talks in Baghdad, state television showed army troops in control of the Baiji refinery, the country’s largest, which reportedly had fallen.
“The immediate priority, and the focus of my discussions today, is to help and encourage Iraqi leaders to put sectarian conflicts behind them and unite across all political parties,” Hague said in Baghdad, adding he would also be meeting with Massoud Barzani, president of the autonomous northern Kurdistan Region.
“The Iraqi state is facing an existential threat, with huge ramifications for the future stability and freedom of this country. The single most important factor that will determine whether or not Iraq overcomes this challenge is political unity,” Hague said.
He expressed the same view as US Secretary of State John Kerry, who was in Baghdad Monday before traveling to the Kurdish capital of Erbil.
But in the time that Kerry left Baghdad and Hague arrived, Maliki reneged on a pledge to the US secretary that he would quickly form a salvation government to stop Iraq from splintering into Shiite, Sunni and Kurdish portions.
“The call to form a national emergency government is a coup against the constitution and the political process,” he said on state television Wednesday.
Hague, however, came with an urgent appeal for unity.
“As a friend of Iraq, the UK believes the urgent priority must be to form an inclusive government that can command the support of all Iraqi people and work to stop ISIS in its tracks,” he said.
The British minister said the UK can provide diplomatic, counter-terrorism and humanitarian support to Iraq. He said his government has already provided five million pounds in emergency relief to Iraq and “there is more that we will be able to do in support of a unified Iraqi government.”
But Maliki, who has pleaded for US air strikes against the militants, has only received 300 advisors from Washington, which has been his main Western backer up to now.
Maliki confirmed that warplanes in Syria -- where ISIS is also fighting and where he has helped the regime receive weapons from Iran by opening Iraqi territory -- had carried out raids against the militants on the border with Iraq.
“There was no coordination involved, but we welcome this action,” he told the BBC. “We welcome any Syrian strike against ISIS, because this group targets both Iraq and Syria,” he said. “The final winners are our two countries.”
The avowed goal of ISIS is to create an Islamic state on territory straddling both Iraq and Syria.
Following the Syrian air raids earlier this week, reportedly inside Iraq, the White House warned Damascus to stay out of the war next door.
As Maliki refused to budge, ISIS militants were reported to be fighting only an hour away from Baghdad.
Maliki’s rejection of Western appeals for a unified government was seen as an indication he is counting on support from elsewhere, namely Shiite Iran.
The New York Times reported that Tehran is supplying Maliki with tons of military equipment every day. It said that the very powerful commander of Iran’s elite Quds force, Qassem Soleimani, has been in Iraq to coordinate the fight against insurgents.
THURSDAY, JUNE 26, 2014
Iraqi Defense Official: Army Has Lost 7 Divisions; Losses at $10bBy HEVIDAR AHMED 9 hours ago
Fighters of the Islamic State of Iraq and Syria (ISIS) inspecting military vehicles abandoned by the Iraqi army. Photo: AFP
ERBIL, Kurdistan Region – Since they began their blitz just over a fortnight ago, Sunni insurgents in Iraq have destroyed half of the Iraqi army and inflicted $10 billion in losses, a senior Iraqi defense official said.
Those losses continued to mount Wednesday as the jihadi-led insurgents reportedly overran the Ajeel oil site east of the captured city of Tikrit, and Iraqi television showed helicopters flying in troops as fighting continued for Baiji, the country’s largest oil refinery.
Meanwhile, Iraq’s Shiite Prime Minister Nouri al-Maliki poured cold water on any hope of a resolution to the serious gripes of the country’s very large Sunni and Kurdish populations that lie at the heart of Iraq’s problems.
Two days after US Secretary of State John Kerry urged Maliki in Baghdad to quickly form an inclusive government where the ethnic and religious populations feel empowered, the prime minister rejected the idea on state television.
"The call to form a national emergency government is a coup against the constitution and the political process," he declared in a televised address. "It is an attempt by those who are against the constitution to eliminate the young democratic process and steal the votes of the voters," he said.
Maliki’s rejection was seen as an indication he is counting on support from elsewhere, namely Shiite Iran.
The New York Times reported that Tehran is supplying Maliki with tons of military equipment every day, and that the very powerful commander of Iran’s elite Quds force, Qassem Soleimani, has been in Iraq to coordinate the fight against insurgents, who are led by the jihadi Islamic State in Iraq and Syria (ISIS).
The Iraqi defense official told Rudaw, on condition of anonymity, that his ministry had assessed its losses in a report.
“The damage to the Iraqi army is estimated to be more than $10 billion, not taking into account the hundreds of army officers lost. So far, seven military divisions have been destroyed,” he quoted the report as saying.
Iraq reportedly has about 14 army divisions, which would mean that half have been destroyed.
Fighting was reported Wednesday between ISIS forces and the Iraqi Army in the Uzaim area, only 60 kilometers from Baghdad.
The defense official noted that while Baghdad is predominantly Shiite, it is surrounded by rings of Sunni-populated territories.
“Baghdad will not be spared from the war because every day towns around Baghdad are falling to ISIS,” he warned.
Meanwhile, Hassan Jihad, a Kurdish MP in the Iraqi parliament and former member of its defense and security committee, said that only 500 insurgents were involved in the attack on Mosul, Iraq’s second-largest city which fell two weeks ago after the heavily-armed Iraqi army turned and fled.
The defense official said that the army had collapsed because Maliki had ignored military commanders and moved reserve troops from the fallen cities of Mosul, Tikrit and those in Diyala province to the fighting in Anbar, which is now entirely in the hands of insurgents.
He also said that widespread corruption inside the Iraqi army was another problem. Some Iraqi MPs are asking what happened to all the billions given every year to train and equip an army that Maliki had boasted was one million-strong, but which was not there when needed.