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Iraqi Elections Likely to Stifle Kirkuk's Energy Potential

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Western markets have their eye on the region's oil and gas, but political instability keeps them away.

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The evidence on the ground in Kirkuk suggests that there is some truth to the allegations of demographic manipulation. In September 2009, local officials in Kirkuk estimated that the population of the province stood at 1.4 million, up from 850,000 at the time of the US invasion in March 2003. More significantly, the voter registry in Kirkuk has increased from 400,000 in 2004 to 900,000 for the March 7 elections. A dispute between Kurds and other ethnic groups over how many seats to allocate to Kirkuk to accommodate this huge increase in voters resulted in the entire election being put back two months after originally being scheduled for January 2010.

Although a compromise was eventually agreed, the real test is likely to come after the election itself. As happened at the last Iraqi general election, the two main Kurdish parties -- the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) -- are running on a joint ticket, the so-called Kurdistani Alliance, together with five minor parties. However, this time they will face a challenge from a new party called "Goran" (meaning "Change"), which is dominated by former members of the PUK who had become exasperated by the widespread corruption and misuse of resources in the three provinces under the KRG's control.

In the July 2009 elections for the KRG, Goran picked up 23.5% of the vote. It is also expected to perform well in Kirkuk on March 7. But Goran has already declared that, however much it may be opposed to the KDP/PUK in other areas, it is in complete agreement with them on iconic issues such as the transfer or Kirkuk to KRG control. As a result, the predominance of ethnic Kurds in Kirkuk means that the main hope for those opposed to the transfer of Kirkuk to the KRG is that voters break with the pattern of previous elections in Iraq and vote across ethnic lines. If the Kurdish parties fail to win an overwhelming majority in the province, then it will be much more difficult for them to push for the inclusion of Kirkuk in the territory administered by the KRG and they may be more prepared to reach a compromise with other ethnic groups on the division of revenue from Kirkuk's oil and gas. But, for the moment at least, the signs are that the Kurds of Kirkuk will again vote along ethnic lines -- which is likely to encourage the Iraq Kurds to renew their calls for a referendum and the eventual transfer of both the province and its oil and gas to the KRG.

Even if the Kurdish parties sweep Kirkuk, there's still no indication that any of the other ethnic groups in Iraq or the central government in Baghdad is prepared to allow the KRG to take over Kirkuk. Consequently, the most likely outcome of the March 7 general election in Kirkuk appears to be an increase in political tensions; and, as long as the standoff remains unresolved, energy companies are likely to continue to be reluctant to make substantial investments in extracting the province's hydrocarbons and transferring them to Western markets.
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