GKP Orsotoro Jan 2010 ' Political situation '

Orsotoro post kurds
Lots of really interesting and positive newsflow this last few days, which seems to have been lost or underplayed with the DGA report contents and discussions. This is a long post and brings together a lot of information and references.

Firstly, it looks like the Iraqi politicians are building coalitions and becoming more pragmatic in their approach to power sharing and oil contracts / revenues.
See the following articles:

http://uk.reuters.com/article/idUKLDE60F06V20100116

http://www.oilvoice.com/n/Iraq_Approves_Outstanding_Foreign_Oil_Contracts/e21839037.aspx

http://www.iraqoilreport.com/oil/production-exports/comment-analysis-iraqs-oil-and-gas-challenges-and-opportunities-3613/

http://www.iraqoilreport.com/politics/oil-policy/as-election-nears-oil-becomes-an-ally-3699/

http://www.aknews.com/en/aknews/2/103297/

http://en.aswataliraq.info/?p=125126

This is due to both the realisation of realpolitic with the impending election in March, US pressure and the lure of HUGE riches from the oil.

The recent announcement of 21,000 troops being deployed throughout N Iraq is a hugely significant strategic move by the US, as it is signalling their intention to withdraw from the dangerous Central and Southern areas ( Sunni and Shia ) but provide a further buffer for the Kurds.

http://www.aljazeera.com/news/articles/34/Despite-SOFA-US-will-deploy-21000-troops-in-N-Ir.html

I am no Hilary Clinton or Kissenger, but have a few thoughts about where this is leading. Would like to share these and open this up for discussion.

Firstly, the current Kurdish situation. The Kurdish people live in an area which stretches across Turkey, Iraq, Iran, Syria and minor parts of other nearby countries.

See maps :

http://en.wikipedia.org/wiki/File:Kurdish-inhabited_area_by_CIA_(1992).jpg

http://www.globalsecurity.org/military/world/war/images/kurdistan1.gif

They see themselves as a seperate nation, with their own culture, traditions and language. There have been many conflicts and much rebellion and repression throughout Kurdish history. Although Musilim, Kurds see themselves as a distinct and seperate cultural block from the Arabs or Turkomen and are very loyal to this idea. Their dream would be for a strong and united Kudish state.

This is now both a threat to, and an opportunity for, the larger geopolitical players and superpowers involved in the region.

Currently, the Kurds in Northern Iraq have establshed a functioning autonomous democracy from the wreckage of the old Iraqi state, following the 1st and 2nd Gulf Wars. Here is some information which illustrates what they are currently achieving:

http://www.youtube.com/watch?v=AuefI5ld0-4 ( Old, 2002, but informative )

http://www.youtube.com/watch?v=cxf0nzBlDrU Iraqi Kurdistan as a tourist destination

http://www.youtube.com/watch?v=mvb0JpdluJU Housing in Kurdistan

http://www.youtube.com/watch?v=M3GcFkdqBwM Foreign workers in Kurdistan

http://www.youtube.com/watch?v=p7nx7r2NJx8 Oil revenues and the new Kurdistan ( 2006 )

http://www.theoildrum.com/node/6124 Geopolitical compromises and Kurdish Autonomy

The Kurds in N Iraq see themselves as a progressive new country. Secure ( no terrorist attacks since 2007, visa entry requirements for Arabs ) developing quickly ( tourism, new housing, attracting and employing foreign workers ) And don't wish to be lumped in with the chaotic South.

The US recognises and supports this for the following reasons:

1. A useful physical and political buffer between the Sunnis/Shiites and Turkey, a NATO member.
2. A political buffer and counterbalance to the South of Iraq. which is largely hostile to the US and pro-Iran ( Sunnis )
3. A working demonstration that a democracy and non fundamentalist Islamist state can be successful in the region.
4. Will cause problems for Iran and Syria.

The uncovering of the HUGE oil finds are a bonus. ( Although I strongly suspect that the US have known they were there for a long time ) They can be both the means to finance and suport a strong Kurdish state and provide future reserves for the US, Europe and their allies from a friendly regional state.

There are massive potential and economic strategic gains to be had from this situation. The US and Bush / Obama recognise this, this is more important than left/right politics and approaches.

The US has learnt a lot about the potential dangers of this situation.
US businesses and personnel will be very wary of working in the Central and Southern regions, being aware of the future security dangers. This type of thing will continue in the Sunni areas.

Iran kidnapped Brits:

http://www.abc.net.au/news/stories/2010/01/01/2783742.htm

http://www.timesonline.co.uk/tol/news/world/iraq/article3822830.ece

The US has been involved in the Balkans situation during the 90s and has learnt a lot about multi-ethnic regions where artifically-created former colonial states have collapsed and managing subsequent ethnic conflict, aiding the development of new states and creating alliances. I can see many parallels with the Yugoslavian / Kosovan situation, so the US is positioning to deal with this ( the 21,000 troops on the ground as a peacekeeping force is a big step )

See historical context / parallels here:

Kosovo war http://en.wikipedia.org/wiki/Kosovo_War

US and allied investment in the Kurdish region is developing, but has not really even begun. The fact that so many US and western businesses have been granted drilling rights in N Iraq Kurdistan is no coincidence. It is also becoming clear that they seem to have gained the most prospective blocks.

One major danger to this process is the potential for conflict between the Kurds in Turkey, with their wish for autonomy, and the larger Turkish state.
as flagged in this recent article (Geopolitical compromises and Kurdish autonomy http://www.theoildrum.com/node/6124 ) Factors which could prevent this are:

1. The Turks are NATO members and looking to join the EU ( http://ec.europa.eu/enlargement/candidate-countries/turkey/relation/index_en.htm ) which would be levers for the western powers to pull to revent the Turks from restarting a war against the Kurds. The carrot would also extend to the economic opportunity to Turkey of all of the Kurdish oil ( pipelines, refining, etc... )
Likewise, the Turkish Kurds would have to see and be involved in the economic upside of the situation, thus dissuaded from pressing too hard for the traditional Kurdish areas of Turkey to break away to join a Kurdish state. A light political touch, coupled with the economic benefits of the status quo, would involve free movement of people and money between Turkey and N Kurdistan, economic opportunities for Turkish Kurds in the development of N Iraq Kurdistan, thus no wish to uset the applecart with a civil war. Existing seperatist movements such as the PKK would need to be marginalised.

The US would want to channel any desire for a greater Kurdish state Eastwards towards the Kurds living in Iran. The US would lke nothing more than to see the Kurds add their voices to those trying to destabilise the current Iranian regime, but this is a dangerous, murky and illegal game. Likewise, there are Kurds in Syria.

I am holding approximately 250,000 GKP shares, plus almost 50,000 VAST.

I am amazed at current price, but it just reflects the fact that this situation is incedibly complex, risky and murky. There is so much going on behind the scenes thet we cannot know, and maybe never will, that I cannot risk trying to trade these, as no-one can honestly know or guess what will develop, or when. I am HOLDING and considering adding.

A takeover will not be far away, my favoured predator being a US or other Western major. The situation in N Kurdistan demands it. These corporations can see that the future of oil in Iraq is in Kurdistan. Leave the dangerous South to the rest of the world and take advantage of what the US government will achieve with the N Iraqi Kurdish state.

I am sure I am only scratching the surface here and I would welcome those with more knowledge and experience than me to comment, correct and enlarge upon this post.

Happy Hunting

OT