How crude is the reality of Kurdistan’s oil business?

July 21, 2010

The recent saga over oil being smuggled out of Iraqi Kurdistan highlights the need for a more systematic and coherent work of the KRG in terms of teamwork, more transparency and a steady flow of information to the public about the government’s work.
Since the start of the new Iraq, oil has been a major issue of contention with Baghdad. So far, the Kurds have failed to explain exactly to Baghdad and the world why is it important for the region and Iraq to have an oil industry in Kurdistan and how is that industry developing and the way it is being handled.
This may have been explained in an interview or two by an official or two, but this is clearly not enough. A more structured system is needed whereby information about the oil industry (and other aspects of government work) is provided in the form of a steady stream of information.
The work of the KRG in this regard has very much been a fire-fighting one.
Without having a proper and aggressive channel of communicating its strategy and vision (if there is a united one) to the outside world, the KRG often finds itself fending off allegations and having to react to statements by Baghdad officials or reports by the press.
The issue of oil is new to the region and it seems to be complicated and controversial, responding to a long report of the NY Times with a short statement on the KRG website is not enough.
The more information available the less fire-fighting needs to be done.
The media and the public usually look for facts and figures.
The questions of what is in these tankers? Where is it coming from? Who is getting the money? Who is benefitting? etc… are all question that should have been answered long ago by the KRG if there are no dodgy deals.
But the two ruling parties need to have a common stance over this issue. Although publically the PUK and KDP say that they are united over this issue but in reality they are different. The recent New York Times report was apparently a tip off by one of the leading figures in one of the two ruling parties.
This is not at the external level only. Internally, the perception is that this is a clear case of corruption.
Perception can sometimes be more important than facts. Whether they like it or not the issues of oil, from extraction to production to selling has all been perceived by the public as scams for the benefit of the few in the leadership.
The burden of proving the opposite is on the Kurdistan region’s leadership.

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