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March 28, 2003

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Iraq's Kirkuk's Oil Fields Loom As Prize
Arrival of 1,200 U.S. Soldiers Near Iraq's Kirkuk Oil Fields Brings New Attention to Province

The Associated Press

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IRBIL, Iraq March 28

U.S. and British forces moved quickly to secure Iraq's southern oil fields, home to much of the country's petroleum wealth. But the heartland of Iraq's oil industry lies much farther north, near the city of Kirkuk, where an earlier generation of Westerners scrambled for oil-drilling rights amid the ruins of the Ottoman Empire.

This week's arrival near Kirkuk of 1,200 American soldiers brought renewed attention to a province whose crude deposits make it an economic prize and a faultline for potential conflict between Kurds, Iraqi Arabs and Turks.

After landing in the area Wednesday, the Americans grabbed a strategic air base and began plotting how to cross 80 miles, through thousands of Iraqi troops, to seize valuable northern oil fields.

Iraq has 112 billion barrels in total proven crude reserves, many of them lying north of Kirkuk toward neighboring Mosul.

The biggest northern oil field contains an estimated 7 billion barrels of recoverable crude. That puts it in the same league as Prudhoe Bay, Alaska, during its heyday in the 1970s, said Leo Drollas of the London-based Center for Global Energy Studies.

Kirkuk, about 150 miles north of Baghdad, is outside the Kurdish enclave in northern Iraq. But it was long a solidly Kurdish city, and Kurds still speak of it with reverence.

"Kirkuk is Kurdish and will forever be Kurdish," said Hoshiar Zebari, a top member of the Kurdistan Democratic Party, one of the two main Kurdish factions operating under Western protection in the enclave.

In recent years, the Iraqi government has expelled thousands of Kurds from the Kirkuk area and settled Arabs in their place. As many as 120,000 Kurds have been forced from their homes since 1991, Human Rights Watch reported last week.

Under its oil-for-food program, the United Nations earmarked 13 percent of Iraq's oil revenues for the country's Kurds. But some Kurds have said they want more. In October, the top Iraqi Kurdish military commander, Hamid Efendi, said his forces would try to capture the oil fields around Kirkuk if the United States attacked Iraq.

Such bellicose language has subsided somewhat since the war began. Yet maps in political and military offices in Irbil, the administrative capital of the Kurdish zone, always include Kirkuk and Mosul within the borders of an Iraqi "Kurdistan." A top Kurdish military commander, Feridoun Janrowey, oversees the "Suleymaniah and Kirkuk" administrative district, and Iraqi Kurds already have selected a mayor for Kirkuk.

Americans worry that a Kurdish thrust toward Kirkuk could prompt Turkey to invade northern Iraq. Ankara fears that if Iraqi Kurds overrun key oil fields and create a rich, independent homeland, they could inspire revolt among Turkey's own minority Kurds.

The U.S. troops airlifted into this ethnic and political cauldron are too few to mount a serious offensive against the Iraqis. Instead, their role is more likely to be that of a glorified police force to keep the Kurds at bay, analysts say.

The region's main object of desire, the oil field at Kirkuk, began flowing crude in 1927. British oil giant BP was an original partner in the Turkish Petroleum Co., the consortium exploring in the area.

"On Oct. 15, 1927, the drill struck oil, which flowed with such force that it was uncontrollable for several days. The discovery of the Kirkuk field transformed Iraq from a country of high oil promise to one of the most valuable concessionary areas in the world," wrote BP company historian R.W. Ferrier.

Together with its main partners Royal Dutch/Shell and the precursor of France's Total BP tried at first to bar American competitors from Iraq. However, the U.S. State Department demanded and finally secured a share in the consortium for Exxon Mobil and several other American firms.

Renamed the Iraq Petroleum Co., the venture pressured the Iraqi government into accepting royalties instead of a stake in the business. Iraqi cabinet ministers protested, with some resigning and even threatening suicide over the issue.

The final agreement served as a model for other joint oil ventures to follow in the Middle East. But for the Iraqis, it caused decades of resentment that boiled over when Baghdad nationalized the consortium in 1972.

Estimates of Kirkuk's daily production capacity range from 500,000 to 900,000 barrels. Until the war, much of Kirkuk's crude flowed under U.N. supervision through a pipeline to the Mediterranean port of Ceyhan, Turkey. The pipeline was operating Friday, albeit at a reduced rate, port sources at Ceyhan said.

Like Iraq's other oil fields, including newer ones in the south, Kirkuk has suffered from a shortage of investment during 12 years of U.N. economic sanctions. But it remains a valuable prize.

"It's not just an economic question," Kurdistan Democratic Party leader Massoud Barzani said this month. "Kirkuk is a symbolic city of unity. ... Kurds, Arabs and Turkmen live there. And the oil should be equally distributed."

AP Business Writer Bruce Stanley contributed to this report from London.

photo credit and caption:
A British soldier from 29 Commando Regiment Royal Artillery stands on sentry duty as a Scimitar tank from the Queens Dragoon Guards passes by and an oil fire burns on the horizon in southern Iraq, Friday, March 28, 2003. (AP Photo/Stephen Hird, Pool)

Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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