On the other hand, Baghdad lets the Kurds export their own oil

MIDDLE EAST AND AFRICA: "Iraq's Kurdish oil: Kurdistan goes glug glug; The federal government is letting Iraq's Kurds export from their new oilfields," The Economist, 30 May 2009.

Maliki may be letting contracts on Kirkuk to keep it out of the Kurds' grasp (and their alleged desires for independence, lest they achieve this critical mass), but while the right hand taketh away, the left allows Kurdish oil to flow, suggesting that whatever the national petro law says, some respect will be shown to Kurdish autonomy within Iraq.

We're talking the first new oil field development in Iraq in 30 years--the Kurds leading the way despite the supposed controversy of the PSAS (production-sharing agreements where foreign firms get 10-20% of the profit off the top before the rest of the revenue is sent to Baghdad for the usual distro--the Kurds getting something like 17% based on population). The first foreign companies in are Dutch and Turkish (so much for fearing the rise of the Kurds, the practical Turks decide to make money instead). The row between Irbil and Baghdad is mostly about who cuts the deals first off, as the Kurds want to develop their own fields even as they admit they will share the revenue with the rest of Iraq as previously agreed. Baghdad wants to approve all deals. The Kurds have a hydrocarbon law in place, the south does not.

Projections for Kurdish production would have the three northern provinces cranking 42% of Iraq's oil production in 2012--if the south can do no better in the meantime. But since even civilian casualties in Iraq have tanked, that seems unlikely.

Meanwhile, the Kurds enjoy showing up the "decrepitude of Iraq's oil establishment," says the Economist, which overplays, IMHO, Baghdad's antipathy.

In truth, Baghdad may be learning the benefits of federalism--as in, let the provinces experiment and then have the center follow the fastest.