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Ethnic tensions may impede progress of Iraq's oil infrastructure

KIRKUK, Iraq—Iraq's oldest and largest oilfields stretch across black hills and emerald valleys, through ancient settlements and all the way to a horizon broken only by wells straining for every drop of the nation's lifeblood.

These vast northern fields could bring in billions of dollars to help rebuild the economy. But the multiethnic community once bound by oil is unraveling, as Kurds, Arabs and Turkmens rush to claim Kirkuk. If Kurds follow through on plans to add the city to autonomous territory, there could be disastrous results for the other ethnic groups that for years have been the backbone of local oil production.

The tension in Kirkuk suggests huge obstacles for U.S. plans to pull back from Iraq, leaving the country whole and at peace.

Many local residents and oil officials are worried that ethnic conflict may divide Kirkuk's workforce, lead to widespread violence and invite devastating attacks on the struggling postwar oil infrastructure, which has been hit by frequent sabotage and theft.

The prize in Kirkuk is about 113 billion barrels in possible reserves, which engineers believe lie under the city and are roughly the equivalent to the already proven reserves of the entire oil-rich country.

Yasin al Hadidi, 56, a patriarch in one of the city's oldest Arab families, said his father worked the Kirkuk fields for three decades, often lugging barrels of oil by mule until a citywide alarm sounded to announce the end of a day's work. The multiethnic neighborhoods that flourished around the fields are now threatened by Kurds who want to break away and take oil revenues with them, al Hadidi said.

"Before there were little bubbles of tension. Now it's boiling," he said, sitting at home in a district named after his family. "I hope and pray the oil stays in good hands, maybe in the hands of the central government. But even if the Kurds take over, where am I going to go? This is my city. This is our work."

The coalition seized the oilfields during the war but quickly relinquished oversight to the new Oil Ministry under Iraq's interim government. International export is slowly resuming, and engineers are working overtime to correct the sabotage, theft, outdated equipment and other obstacles that prevent Kirkuk's oil output from reaching prewar levels.

But recent eruptions of ethnic violence in northern Iraq raise questions as to whether the central control of the fields will last. The city's oil wealth would ensure the long-term viability of an autonomous Kurdish state. That makes rival Arab and Turkmen groups nervous.

Already, young Kurds are the faces of security at the oilfields and along miles of pipeline. Arabs run Northern Oil, the state-run company responsible for regional production and distribution. They say there will soon be enough crude to supply the international market, take care of domestic demand and ensure the livelihoods of each of Kirkuk's ethnic communities. So far, sabotage on key pipelines has prevented significant oil revenue, which is slated for a domestic development fund.

"A field in Kirkuk or a field in Basra has nothing to do with me as an Arab or someone else as a Kurd," said Manaa al Obaydi, deputy director of Northern Oil. "Kurdish people are part of Iraq. If they take some revenue from Iraq's oil, so what? That's their right."

Privately, however, other Arab oil executives voice concern about the steadily growing influence of the Kurds, many of whom recently returned to Kirkuk after being forcibly removed under Saddam Hussein's policy of "Arabization." About 300,000 Kurds were driven from their homes under the former regime and replaced by Arabs from southern and central Iraq who received financial incentives to head north.

A manager at Northern Oil, who wouldn't give his name, showed visitors photographs of wartime looters carting off computers, dismantling furniture and burning 50 years of company records. He pointed to the red "Patriotic Union of Kurdistan" tag that vandals had scrawled across a wall in one photo and to the baggy, traditional Kurdish trousers worn by apparent looters in another image.

"There are groups who don't want to see a united Kirkuk," the manager said. "They want to swallow the oil, they want to swallow the people, they want to swallow the buildings."

Officials from the two main political factions in northern Iraq, the Patriotic Union of Kurdistan and the Kurdish Democratic Party, have yet to make overt moves for petroleum purse strings. However, they've made it no secret that the Kurds' geographical and historical ties to Kirkuk include having a voice in how the oilfields are run.

"We just want Kurds to have their fair share of natural resources," said Jalal Jawhar Aziz, director of the PUK in Kirkuk. "We have huge economic potential here, but there is a lack of management. We have enough oil not for just one Iraq, but for two. We could help with correct, fair management."

Inside Kirkuk's heavily guarded oilfields, workers use mostly 1950s machinery and wear little or no protective gear for their often-dangerous jobs.

"If we can work under these conditions, the work will continue, regardless of who is in charge," said Taghreed Ali, 43, a mechanical engineer who gave up conventional dreams of marriage and children to pursue her love of oil.

The U.S. Army Corps of Engineers entered Iraq the day after Kirkuk fell and immediately started putting out fires and assessing the damage. Members of Task Force RIO (Restore Iraqi Oil) have since managed to recover $14 million in stolen equipment and have gotten refineries back in shape, said Bill Graney, a project manager. But much remains to be done.

Southern fields, which were far less damaged than Kirkuk's, have recovered rapidly to exceed expectations by producing nearly 2 million barrels per day. By contrast, the northern fields are churning out 500,000 barrels per day, far short of its capability of 900,000 barrels per day. Shaping up the flagging northern fields is crucial to the oil ministry's plans to increase nationwide output to up to 4 million barrels per day in 2005 and 6 million per day by 2010.

Since Kirkuk crude first bubbled up in the 1920s, oil has determined the fortunes of three generations of residents. Locals follow production reports the way American Midwesterners watch weather forecasts, and many are worried that growing ethnic divisions could change their way of life.

The Kadhims are one of the few Kurdish families in a heavily Arab housing complex built by the former regime for oil workers. For 30 years, Mortada Kadhim has overseen a Northern Oil warehouse and enjoyed friendships with his Arab neighbors. His two sons, bright and bilingual, are out-of-work petroleum engineers who hope to remain in Kirkuk.

These days, the Kadhims are keeping a low profile and seldom tell strangers that they're Kurds.

"I don't understand why they are so upset," Kadhim said. "A Kurdish state wouldn't mean kicking out all the Arabs and Turkmen—just the ones who came recently. If Kurds promise to control the oilfields with fairness and justice for all Iraqis, then why not give them control? It's for all of Iraq's future."

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(c) 2004, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): USIRAQ-OIL

GRAPHIC (from KRT Graphics, 202-383-6064): 20040122 USIRAQ OIL

Iraq

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