Oil Provinces Offer High Stakes in Iraqi Poll

30 January 2009

Iraqis go to the polls on Saturday to choose their local council representatives for the next four years, in the second such elections held in postwar Iraq. The outcome will reflect the balance of power between the major political parties across 14 of the country’s 18 provinces and give an indication of the shape of things to come as Iraq prepares for its next parliamentary elections, most likely in early 2010.

Unlike the 2005 provincial council elections — which were boycotted by Sunnis — the 440 seats up for grabs this time are being contested by over 14,000 candidates representing Sunni, Shiite and secular parties, as well as independents. Sunni parties are going head to head in north and northwest Iraq, while Shiite parties that have previously run on coalition tickets, particularly the Islamic Supreme Council of Iraq (ISCI) and the Dawa party of Prime Minister Nuri al-Maliki, are now competing. Elections are not being held in the three governorates making up the semiautonomous Kurdish region or in Kirkuk.

Nowhere are the stakes higher than in the oil-rich south, particularly Basrah, capital of Iraq’s biggest oil-producing province and home to its major oil export hub. Although provincial councils’ powers are limited, mainly because they have no say in determining their share of the national budget or how it’s spent, Basrah council has became a battleground for parties vying for control over the past four years and remains one of the most contested governorates. Basrah will have the biggest local council after Baghdad and Mosul, with 35 seats up for grabs.

Historically, Basrah’s impoverished residents and infrastructure, as in the rest of the southern Shiite region, have not benefited from oil wealth generated locally. As a result, local political forces have been nurturing ambitions to create a standalone autonomous region centered on Basrah’s oil wealth that could include neighboring provinces.

A petition to give Basrah governorate federal status was launched this month by Basrah lawmaker and former governor Wael Abdul Latif, but failed to attract enough signatures. If it maintains its grip on southern Iraq in Saturday’s elections, ISCI is hoping the results will lend impetus to its own plans to create a nine-governorate region encompassing over 70% of Iraq’s oil reserves.

Other Shiite politicians are backing a strong southern region made up of the three governorates of Basrah, Misssan and Dhi Qar. Basrah is home to the giant Rumaila oil fields, as well as West Qurna and Zubair, which account for more than 80% of Iraq’s oil production. Three Maysan oil fields — Buzurgan, Jabal Fauqi and Abu Ghirab — account for another 100,000 barrels per day. All are being offered to international firms under Iraq’s first bid round, launched last summer. The three governorates hold five of the 16 oil and gas fields being tendered in a second round, including giant fields such as Majnoon and Halfaya.

Analysts say the outcome of Saturday’s elections will affect the way oil deals with international firms are structured and concluded.

Under the Iraqi constitution, councils’ powers include setting governorates’ priorities and amending projects set out in annual ministry budget plans, as well as generating and collecting revenues. Depending on the strength of the regionalist tendencies that emerge from the elections, the councils could pose a challenge to the central government’s monopoly over the running of the oil sector — as Royal Dutch Shell has discovered. After the supermajor signed a heads of agreement with South Gas Co. and the Iraqi oil ministry for a multibillion-dollar project to gather and market flared natural gas, local politicians in Basrah mounted a campaign against the deal — which has yet to be finalized — on the grounds they had not been consulted.

Al-Maliki, who takes credit for pacifying Basrah in a government-led military effort last year that succeeded in containing the rampant power of militiamen, has centered his campaign on fighting regional autonomies. While ISCI has campaigned for councils to enjoy more independence and larger budgets, al-Maliki has led Dawa’s push for greater centralized power for Baghdad, arguing that a strong federal government is better equipped to provide support and funds to the provinces.

By Ruba Husari, Dubai

(Published in International Oil Daily Jan. 30, 2009)

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