Friday, November 12, 2010

Iraqi Political Maneuverings

Iraq Oil Report has a very interesting piece on the latest struggles to get a new Iraqi government functioning.  From the global perspective, I think a key question is what happens to the oil ministry:
Government spokesman Ali al-Dabbagh said the leadership of the Oil Ministry, Foreign Ministry and Finance Ministry positions would be split among the biggest blocks, while the other two so-called “sovereign ministries” – Defense and Interior – would be led by independent, non-political people.

Among the sovereign ministries, Oil appears to be the biggest prize, with all three blocks angling for it. The current oil minister, Hussain al-Shahristani, is part of the State of Law coalition.

“Of course we are thinking of the Oil Ministry,” said Kamal Saidi, MP and top ally of Maliki, “But will the political agreement allow this?”

When asked if the Kurdistan Alliance will get the spot, Kurdish President Massoud Barzani said, “It’s not sure yet.”
My sense is that Hussain al-Shahristani has done a remarkably good job as oil minister on behalf of his people in getting all the international oil companies involved in developing Iraq's oil, but in striking some very tough bargains with them, rather than giving away the store.  While nobody is perfect, my impression from thousands of miles away is that he is an unusually competent and honest public servant by Iraqi standards.  I think the odds of a large Iraqi oil production increase will be lower if someone else takes over the position.

So the future direction of global oil production may be hanging in the balance here.

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