Two developments in Iraq will have major implications for
conventional oil worldwide: The Kurdistan Regional Government (KRG) is
proceeding with its oil and gas exploration and production (E&P)
campaign, irrespective of what Baghdad says. A Turkish invasion of the
KRG area risks triggering a wave of partitions in the neighbouring
countries which are by far the world's biggest reservoir of
petroleum.
The KRG is attracting international oil companies (IOCs) through
production sharing agreements (PSAs) and, in the process, accelerating
the pace of federalism, which its critics in Baghdad say is a step
towards Iraq's partition. A Turkish invasion of northern Iraq to
end cross-border raids by the Kurdistan Workers' Party (PKK) looks
likely after an Oct. 21 PKK attack on troops in south-eastern Turkey,
the worst in a decade. Turkish PM Recep Tayyip Erdogan is under
intolerable pressure which will test his skills to the limit, as a
destabilisation of KRG's area threatens his own country.
In Iran, the supremacists behind President Mahmoud Ahmadi-Nejad
have staged yet another coup by getting rid of Ali Larijani and
replacing him with one of them. The replacement, Sa'id Jalili, 42,
not only lacks Larijani's experience in negotiating with the West
over Tehran's nuclear and regional ambitions, but also looks set to
cause a confrontation with the US (see
news18-IranLarijaniQuitsOct29-07).
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