Kirkuk's Oil Fields Loom as Possible Flashpoint for Kurds, Turks

KIRKUK, Iraq – Kurds, Turks and Americans sought Thursday to avert any violent scramble for control of the prolific oil fields around Kirkuk after Iraqi defenses appeared to collapse in the strategic northern city.

Kirkuk's petroleum wealth has long made it a potential flashpoint of conflict in a region rife with competing territorial claims and ethnic allegiances.

As advancing Kurdish fighters poured into the city, neighboring Turkey dispatched military observers to the area -- stoking fears the two sides could blunder into a local war within the larger Iraqi conflict.

A U.S. military official, speaking on condition of anonymity, said American special operations forces were trying to establish an American presence in Kirkuk "in the interest of regional stability" -- an apparent reference to Turkey's concerns that Kurds might take over the hub of Iraq's No. 2 oil-producing region.

Despite the possibility of a clash, some analysts played down the day's ominous developments and suggested that neither Kurds nor Turks would push to the point of bloodshed.

Kirkuk, about 150 miles north of Baghdad, lies outside the Kurdish enclave set up in northern Iraq after the 1991 Gulf War. It was long a predominantly Kurdish city, and Kurds still speak of it with reverence.

But Dara Attar, an independent oil consultant living in London, said the prospect of a democratic and federal Iraq made it wrong for his fellow Kurds to speak of Kirkuk's oil fields as belonging only to them.

"'Kurdish oil' is a very wrong expression," he said. "Although Kirkuk is part of Kurdistan, and Kirkuk will be the capital of the new federal state of Kurdistan, Kirkuk's oil is Iraqi oil."

Attar is one of 14 expatriate Iraqi oil specialists working together with the U.S. State Department to restructure Iraq's state-run oil industry once the war ends.

The working group favors an equitable distribution of Iraq's oil revenues among all its citizens and would disapprove if Kurds tried to grab control of Kirkuk, he said.

Under the U.N. oil-for-food program, Iraq's Kurds have received 13 percent of the country's oil revenues. Some Kurds say they deserve twice that share because they comprise as much as 27 percent of the Iraqi population.

Turkey has repeatedly said that it won't accept Iraqi Kurdish control of Kirkuk, fearing that it could encourage Iraqi Kurds to form their own state. That, Turkey says, could inspire Turkish Kurdish rebels who fought for autonomy for 15 years.

But even if the Kurds did seize Iraq's northern oil fields, they would have no good way of profiting from the crude there.

"You may be sitting on top of the oil fields, but where do you go with the oil?" asked Jim Placke, an Iraq specialist at Cambridge Energy Research Associates in Washington.

Much of Kirkuk's oil has flowed under U.N. supervision through a pipeline to the Mediterranean port of Ceyhan, Turkey. To export significant amounts of oil, the Kurds would have to use the same pipeline, which extends to the southwest and far from areas the Kurds are ever likely to control.

Without the pipeline, they'd be limited to using trucks for small-scale local sales, said Manouchehr Takin of the Center for Global Energy Studies in London.

Turkey was dispatching military observers to Kirkuk to make sure that Kurdish peshmerga fighters do not keep control of the city. But Turkish Foreign Minister Abdullah Gul indicated that Turkey has no immediate plans to send ground troops to the region.

Gul said U.S. Secretary of State Colin Powell told him Thursday that U.S. paratroopers from the 173rd Airborne Brigade would move shortly into Kirkuk. Powell offered to let Turkey send military observers to make sure that Iraqi Kurdish fighters withdrew, Gul said.

Any Kurdish operations would take place "in close coordination with and under the control of our U.S. forces," said Brig. Gen. Vincent Brooks of U.S. military Central Command in Doha, Qatar.

More than 100 vehicles laden with Kurdish fighters drove though the streets of Kirkuk, but the Kurds have promised to act strictly within U.S. orders.

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

Although it's Iraq's oldest producing oil field, estimates of Kirkuk's daily production capacity range as high as 900,000 barrels. Together with other fields nearby, it accounts for about 40 percent of Iraq's total output.

Michael Rothman, an analyst at Merrill Lynch in New York, said oil markets would react negatively to uncertainty caused by Turkish troop movements in the area.

But Takin argued that an armed struggle for control of Kirkuk's crude might not have such a severe impact.

"There's no oil being exported from Iraq, and prices are coming down anyway," he said "The world can do without 40 percent of Iraq's oil. That's not a crisis now, and not so for the next several months."