Kurdish Government Quietly Signs Oil Deal

From the LA Times:
A controversial oil exploration deal between Iraq's autonomy-minded Kurds and a Norwegian company got underway this week without the approval of the central government here, raising a potentially explosive issue at a time of heightened ethnic and sectarian tensions.

The Kurdistan Democratic Party, which controls a portion of the semiautonomous Kurdish enclave in northern Iraq, last year quietly signed a deal with Norway's DNO to drill for oil near the border city of Zakho. Iraqi and company officials describe the agreement as the first involving new exploration in Iraq since the U.S.-led invasion in 2003.

Some Iraqi politicians are not amused:
"This is unprecedented," said Alaa Makki, a leader of the Iraqi Islamic Party, a Sunni Arab group. "It's like they are an independent country. This is Iraqi oil and should be shared with all the Iraqi partners."
For a different perspective, check out this article from the Kurdistan Regional Government.

(via Kevin Drum)

I think the sooner we disabuse ourselves of the fiction that Iraq is really a country, rather than just some lines drawn on a map for the convenience of the Brits after WW I, the better off we'll all be.
Well said.
Iraq's neighbors also fear the possibility of Iraqi Kurds using revenue generated by oil wells to fund an independent state that might lead the roughly 20 million Kurds living in Turkey, Iran and Syria to revolt.

This is another potential problem.

Actually this is THE problem.
I wish it were but unfortunately, there are some other things to worry about including but not restricted to a civil war between the Iraqi Shia' and the Sunni Arabs after the inevitable American withdrawal.
Iraq will become 3 independant states, it becomes more and more  inevitable - both US and local interests intersect on this.
Classical Balkanisation (or Romanisation maybe) in action. THE problem are the Kurds which by themself are THE problem of Turkey. Of course there will be a lot of blood to spill on old-style oil oooops... border issues, but the alternative is even more bloody.

Anyhow forget about oil form there in the next XXX years. Such young, unstable quasistates are uncapable of providing basic security, not to mention prosperity for their citizens or businesses. What they produce is mainly poverty and terroism.

If memory serves correctly, Iran has a significant Kurdish population that they would prefer not to get to 'uppity'.
Good timing, too!  President Bush just announced his Plan for Victory that hinges on splitting the insurgency and convincing Sunni nationalists to come into the tent.  Not likely.  Perhaps that's why the Kurds announced it now -- they want a civil war.  It is, however, what's in the new Iraqi Constitution.  Thanks to peak oil, oil companies are hungry to book new reserves.  To do that, they need a lawful contract signed by a lawful entity.  The constitution has been adopted and the entire operation is now blessed by the UN Security Council.
Here are the perverse incentives: oil companies have more leverage over smaller regional governments and so want them to be stronger than the central government.  So, it's best for them if the pot boils enough to weaken the central government but not so much that the entire thing collapses into civil war.  The institutional arrangement is highly unstable and probably can't work unless the U.S. Pipeline Police remain indefinitely.
Also, don't forget that the borders of the Kurdish region have not yet been agreed.  Small matter of where you put Kirkuk and nearby oil fields.  I wonder what the contract says.  (Sorry about the duplicate post, friends.)
Looking at the entire Middle East, it is difficult to imagine anything other than an enforced peace within the area. As long as the US or Israel is around for whipping boy functions, "the enemy of my enemy is my friend" will apply. Should the US get out of the area or Israel somehow manage to come to terms with the Palestinians, then local Muslim factions will become restless, each desiring power (ie, oil).

I think this is typical of what we can expect in ANY future, whether the US maintains a presence in the region or not. This area has always been tribal, and comfortable with it. I think that it simply doesn't matter whether we (the US) are there or not, the area is inherently unstable due to social and political forces that live on top of all this oil...

This should only add to the rationale and the push for AE!

What I want to know is this:  What on earth are the Norwegians thinking??!  Don't they know that this move will infuriate the US?  They are already an extremely wealthy country due to their own oil native oil endowment, for crying out loud!  Is it just me, or don't the Norwegians stand to lose a lot more (perhaps not in immediately tangible ways) than they stand to gain by this little stunt?

Any opinions out there as to whether the Norwegians are motivated by greed?  Or perhaps they WANT to provoke the US?  Or perhaps they are just clueless?

The Norwegian oil fields like the North Sea is is rapid decline.  They may not have more than a trickle of oil in a decade.
Is there any reason to suppose this is more than the entrepreneurial actions of a single company?  Why suppose any official Norwegian involvement?
According to this page the Norwegian state doesn't own any shares in this company. We are no talking about Statoil or hydro here, where the state owns 70%(link) (select share, then shareholders(top 20)) and 43%(link).
The company in question, DNO (Det Norske Oljeselskap) has no Norwegian state ownership, this is purely the entrepreneurial actions of a single company.