Page 1 of 2 The rise of Rimland?
By Robert M Cutler
MONTREAL - Recent energy and other developments in Southwest Asia, particularly
involving Turkey, Iran and Iraq, sketch the outline of an imminent
reorganization of international relations in the region. This will have
knock-on effects for Eurasia as a whole and the shape of the international
system in coming decades.
At the same time, it suggests new and unexpected relevance of the mid-20th
century geopolitical theorist Nicolas Spykman.
A key point is the little-noticed movement towards gas imports from the Kurdish
region of northern Iraq into Turkey. Industry figures from the scene now
estimate that 8 billion cubic meters per year (bcm/y) will flow from the
Kurdish region into the Nabucco pipeline by the time it enters service, at
present forecast
to be in 2016. Added to the similar amount already committed from Azerbaijan,
this makes up just over half of the projected 31 bcm/y volume of the pipeline.
The agreement on gas supplies from northern Iraq follows from the visit by
Turkish Foreign Minister Ahmet Davutoglu in late October to Irbil, the capital
city of Iraqi Kurdistan, to open a Turkish consulate there. His delegation
comprised no fewer than 70 officials and businessmen. The visit was itself a
knock-on from one by a large and high-level Turkish delegation headed by Prime
Minister Recep Tayyip Erdogan to Baghdad in the middle of October, when
literally dozens of cooperation agreements were signed in a wide spectrum of
policy areas.
These events suggest a tentative resolution of certain instabilities in
Southwest Asia that have persisted since the breakup of the Ottoman Empire
nearly 100 years ago. They represent the emergent re-integration of two
economies rent asunder by the division of the empire in the early 20th century,
together with an incipient consolidation of the post-Cold War "Southern
Corridor" for energy from the Caspian Sea region to Europe. The significance of
such a development of the evolution of post-Cold War international relations in
the region is clear.
Recently announced oil industry contracts have garnered the most attention in
this regard, and some background helps to put these in their proper
perspective.
The Turkish Petroleum Company (TPC) was established in 1912 in opposition to US
companies' interests. Two years later, the Anglo-Persian Oil Company (APOC)
achieved 50% control of TPC. APOC later became the Anglo-Iranian Oil Company,
then British Petroleum, then with the purchase of an American company BP-Amoco,
today known as BP. The Iraqi government recently agreed with BP and the China
National Petroleum Corporation (CNPC) on a deal for the development of the
Rumaila oil field in the south of Iraq, which CNPC estimates to hold 17 billion
barrels of reserves.
By 1927, when oil was discovered at Kirkuk, in what is present-day Iraqi
Kurdistan, the TPC was divided into equal shares among APOC, Royal Dutch Shell,
and the Compagnie Francaise des Petroles (CFP), and a US consortium called the
Near East Development Corp, with a non-voting 5% share to Armenian Calouste
Gulbenkian, born in Turkey and the original "Mr Five Percent", whose impressive
collection of ancient art is now exhibited in his eponymous museum in Lisbon.
By 1929, when the TPC became the Iraqi Petroleum Co (IPC) and Iraq was under
British mandate from the League of Nations, a difference of interests had
emerged within the companies comprising it. While Shell and the CFP (which
became the French company Total in 1991) sought to develop the Kirkuk deposits
as quickly as possible, the APOC (today's BP) and the American company Standard
Oil of New Jersey (which became Esso, then Exxon, and is today ExxonMobil)
sought to delay it because they had other holdings and didn't mind keeping the
oil in the ground there.
This soup of companies gives a hint as to continuities in the story. Skipping
the next three hardly uneventful decades, the IPC by 1960 was still developing
only one-twentieth of all the resources in Iraq to which it had rights. That
year, a meeting of oil producers in Baghdad led to the foundation of the
Organization of Petroleum Exporting Countries (OPEC), and the next year the
Iraqi "Law No 80" expropriated all IPC concessions not already in production.
Following these events, OPEC members began negotiating with Western consuming
countries independently of one another, leading to increased production and
undercutting of Iraq, which suffered a significant decline in market share.
Throughout the 1960s, the Iraqi National Oil Company (INOC) contracted first
with the French and then with the Soviet Union, asking for help to development
the North Rumaila fields: the ones just signed over to BP and CNPC.
By 1975, and following its strong advocacy of the 1973-74 oil embargo on the
West, Iraq nationalized all foreign energy interests still remaining in the
country, then throughout the rest of the decade autonomously developed the
domestic energy extraction industry. This went relatively well until the
disastrous Iran-Iraq war began, lasting for a decade. Then came the first Gulf
War, followed by United Nations sanctions.
By the end of the 1980s, the USSR had agreed to assist in the development of
the West Qurna field; LUKoil inherited this agreement after the end of the
Soviet Union, but it is now out of luck. After the fall of Saddam Hussein, the
government of Iraq declared all contracts signed during the Saddam era were
invalid and were to be reviewed and subjected to new Iraqi law. LUKoil
accordingly put in a new bid for West Qurna earlier this year, but has lost out
to Western rivals.
The Iraqi government has just reached agreement with America's ExxonMobil
(Standard Oil of New Jersey when it was a member of TPC in the 1920s) and
Anglo-Dutch company Shell (also a TPC member) to develop the West Qurna field,
of which the reserves are estimated at 8.7 billion barrels.
The signature of these agreements with Western firms (and there are surely more
to come) represents the historic reversal of the nationalization policy
introduced in 1960, seven years after the coup in neighboring Iran against
Iranian prime minister Mohammad Mossadeq, who had pursued an analogous policy.
The agreements also coincidentally signify the irretrievable downfall of the
ideology and practice of the transnational Arab socialist Ba'ath party, of
which remnants are present and active throughout a number of state structures
in the Arab world, although an Iraq-Syria split dating from the mid-1960s had
already destroyed its pretensions to any sort of universalism.
The Ba'ath party had taken power in Iraq in 1963 and Saddam was its last
significant representative in power, although it survives through the Assad
clan in Syria. This era of the 1960s also marked the Soviet foreign-policy
initiative to curry favor with such regimes, categorized in Soviet doctrine of
the time as "revolutionary democracies", adding Third World intelligentsia and
other miscellaneous social strata into the already eclectic mix of the "popular
front" line of Seventh Comintern Congress (1935).
That Soviet doctrinal shift had been made authoritative in the 1960s through
writings and speeches by Boris I Ponomarev, chief of the Third (Communist)
International before its dissolution in 1943, thereafter head of the Soviet
Communist Party Central Committee's International Department and eternal
candidate member of its politburo.
So the new energy agreements allow one to see in still clearer retrospective
focus the final extinction of a whole so-called (in Soviet doctrine) "national
anti-imperialist" social stratum that came into state executive power
throughout a number of former European colonies, at the head of the
anti-imperialist independence movement about half a century ago.
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