The visit of a high-ranking Kurdish delegation led by the Kurdistan Region Prime Minister Nechirvan Barzani to Russia had several short and long-term goals.
On the one hand, it reinforced the already strong relations, especially in the battle to defeat the Islamic State (IS), but Kurdish eyes were also on the upcoming independence referendum scheduled for later this year.
As a dominant global power and a major influence in the region, Russian support is vital for Kurdish aspirations and ensuring its prosperity both now and in the future.
Russian backing also provides the Kurds a powerful alternative gateway to the regional players such as Baghdad and Ankara but also diversifies the Kurdish reliance on the US.
The Kurdistan Regional Government (KRG) and the US have enjoyed strong relations, especially since 2003. However, too often the Kurds have suffered under the US’ obsession with a united Iraq.
Its “one-Iraq” policy has seen Washington lean toward appeasing Baghdad, often at the expense of giving the KRG too much support or legitimacy.
One of these key factors was the lack of US endorsement for independent Kurdish hydrocarbon exploration and exportation deals signed with foreign companies, after pressure from Baghdad. The KRG may have pursued with its oil policy regardless, but this offered a major constraint.
Facing a difficult economic crisis over the past three years, the KRG deal with Russian giant Rosneft, reportedly the largest signed at the International Economic Forum in St. Petersburg (SPIEF), provides Kurdistan with new leverage and breathes life and renewed credibility into the Kurdish oil sector that was stagnating.
The Rosneft statement detailed the signing of a series of documents aimed to expand cooperation between the two parties “in exploration and production of hydrocarbons, commerce, and logistics.”
“The Parties signed an investment agreement under which they committed to develop cooperation in exploration and production, agreed on monetization of the export oil pipeline in [the Kurdistan Region], as well as entered into a number of production sharing agreements,” read the Rosneft report
PM Barzani declared a new state of bilateral relations had begun between the KRG and Russia in all aspects, following meetings with Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov, and the unveiling of the historic oil deal with Rosneft.
The PM stated that “this is certainly a sign of restoring trust after all these years of problems in the Kurdistan Region, especially the budget cut, the war on [IS], and 1.8 million refugees.”
“I think this is, after all these problems, a good beginning for the restoration of trust in the markets of Kurdistan,” he continued.
“We hope this marks the beginning of further agreements with countries in the energy and all other sectors,” PM Barzani added.
On his visit, PM Barzani reaffirmed that Kurdistan’s independence referendum is one of the KRG’s priorities.
The major deal with Rosneft, under the auspices of Putin, provides indirect endorsement to a future Kurdish state.
In December, Putin emphasized Russia’s “special and very good relationship with the Kurds” while responding to a Kurdistan24 reporter.
With Putin further adding, “Ultimately, the legitimate rights of the Kurds will be ensured, but what will be the form and how it depends on Iraqis and Kurds themselves.”
The deal was naturally met with apprehension from Baghdad. But, fighting a bitter sectarian war and engulfed in the battle against IS, Baghdad is experiencing a weak hand in provinces under their control, let alone in Kurdistan.
However, the deal did face some criticism from opposition circles at home.
The Change Movement (Gorran), Kurdistan Islamic Union (KIU, Yekgirtu), Kurdistan Islamic Group (Komal), and Kurdistan Islamic Movement (KIM), issued a statement declaring: “The Rosneft agreement should not have been signed in the absence of the parliament’s observation and interpretation.”
“It is impossible not to know how much discount the Kurdistan Region has made for the price of oil to Rosneft,” the joint statement continued.
“It is impossible not to know in what way Rosneft will become partner or possessor in these five oilfields, and for how many years the deal is,” the report added.
In any case, the finer details of the agreement are expected to take months of ironing out before contracts can be signed.
Despite the objections, the opportunity for lucrative and possibly game-changing energy deals with major powers such as Russia is difficult to turn down, especially with an upcoming referendum, a tough economic climate, and with an energy sector that has been lagging in recent years.
First Published: Kurdistan 24