As civil war boils, the country's future depends on how sectarian groups divide what's underground.By Michael Hastings
Newsweek
Issues 2007 - On the way to a surprise visit in Baghdad in October, U.S. Secretary of State Condoleezza Rice decided to talk to reporters about oil. "We believe that oil has to benefit the Iraqi people as a whole," she said at a press gaggle en route to the Iraqi capital. In a whirlwind of meetings over the next two days, she pushed the oil topic again and again with leaders on all sides—Sunni, Shiite and, most prominently, Kurdish President Massoud Barzani, to whom she reinforced her feelings that "oil needs to be a unifying factor, not one which will help to make the country less unified." In other words: please stop fighting and share.
Yet Iraq's sectarian fighting is, to an extraordinary degree, about the very issue of sharing oil. The country's political future and its energy future have converged. The side that wins in this burgeoning civil war gets control, in theory, over some $35 billion a year in oil revenue, making up 90 percent of the Iraqi budget. The side that loses—well, they fear they won't get anything at all. And Iraq's daily spasms of violence are closely tied to maneuvering over the future control of oil, as well as rampant oilfield corruption. Oil monies skimmed off the top are said to be funding the insurgency, say U.S. officials.
Of the competing plans to resolve the conflict, all depend on oil. Calls for a federated Iraq, broken up into three states, are hampered by fears of which state gets the most oil. The answer is well known—the Shiites in the southern region have more than 80 percent of Iraq's proven oil reserves. Kurdistan, in the north, has access to the fields of Kirkuk, which have been pumping petroleum since the 1920s. And the Sunnis, the minority that once dominated and profited from Iraq's black gold, are stuck in the middle with a desert and lots of sand, underneath which oil experts expect there is oil, but no fields are anywhere near being developed.
Oil was supposed to be Iraq's savior, with Bush administration officials promising that profits from oil revenues would pay for reconstruction. It was the Oil Ministry, almost alone among government buildings, that the U.S. forces protected after the fall of Baghdad.
http://www.msnbc.msn.com/id/16299313/site/newsweek/