Iraq set for oil auction amid autonomy drive

BASRA, Iraq

An Iraqi worker operates valves at the Nahran Omar oil refinery near the city of Basra, 550 kilometers) southeast of Baghdad.

A top politician in Iraq’s oil-rich Basra province moved on Monday to give the area more autonomy from the central government, three years after the failure of a similar bid. Basra provincial council chief Sabah al-Bazzouni told reporters he was making the push because of a prolonged political crisis that has seen Prime Minister Nouri al-Maliki threatened with a vote of no confidence and criticism that he has centralized power. “We will call the members of the provincial councils, and the heads of the provincial councils, to announce a southern region,” Bazzouni told a news conference in Basra, Agence France-Presse quoted.

The vast majority of the country’s oil exports, upon which Iraq’s budget is almost entirely dependent, pass through Basra. “If they do not respond to this call, we will announce the region of Basra,” Bazzouni said.

Amid Basra’s autonomy drive, Iraq set to auction 12 new oil and gas exploration blocks this week in a fourth energy bidding round, as it seeks the rapid expansion of a sector vital to its economy, but tough contract terms mean Baghdad may struggle to drum up major interest. Iraq qualified 47 energy companies, ranging from oil majors such as BP to Russian state-run operator Gazprom, to participate in the auction, which is expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil to Iraq’s current reserves of 143.1 billion barrels.

Iraq’s constitution allows for any province or provinces to become an autonomous region, like the three-governorate Kurdish region in the country’s north, by way of a referendum. All that is required to trigger such a plebiscite is the approval by a tenth of the province’s voters, or a third of that province’s provincial council members. In January 2009, Basra launched a petition to turn itself into an autonomous region, but failed to collect enough signatures. Bazzouni said he was launching the effort for greater autonomy because of a protracted political crisis in Iraq, which has seen the Shiite-led authorities issue an arrest warrant for the Sunni vice president. Several key political leaders from various ethnic backgrounds and political parties have accused Maliki of violating the tenets of a power-sharing deal, and have threatened him with a vote of no-confidence.