Iraq's Sunni-backed Iraqiya bloc, lead by Ayad Allawi, suspended its participation in parliament to protest the control of key posts by Shi'ite Prime Minister Nouri al-Maliki Dec. 18. The move came as an arrest warrant was issued for Tareq al-Hashemi, a Sunni who is one of Iraq's two vice presidents. Politicians have apparently intervened to stop the arrest from being carried out.

The Iraqiya bloc narrowly won a majority of seats in last year's parliamentary election, but Allawi was outmaneuvered by al-Maliki, who kept the premier's post with the support of Shi'ite parties. For over a year now, al-Maliki has effectively controlled the Interior and Defense Ministries, which oversee the police and military. Conflicts between Sunni and Shiite politicians have delayed the appointment of permanent ministers.

Also in Baghdad, a bomb exploded near shops selling car parts in an eastern neighborhood, killing two people and wounding four others. (AP, Reuters, Dec. 18)

A wave of some 20 explosions across Baghdad killed dozens of people Dec. 22—overwhelmingly civilians. At least 63 people were killed and at least 185 were wounded in 16 of the attacks around the city. One targeted a market. Another, at a school as children were arriving. A third was at a coffee shop. (CNN, Dec. 22)

However, no point in being a gloomy gus. Let's look at what really matters...

Bloomberg informs us that Iraqi crude oil production jumped to the highest level in at least 20 years, or more than 3 million barrels a day, according to Hussain al-Shahristani, deputy prime minister for energy affairs.

Mission Accomplished.

From the New York Times, Dec. 22:

The American oil giant Exxon Mobil and its partners are embroiled in a $50 million payment dispute with the Iraqi government over an oil field in southeastern Iraq that the companies are upgrading and modernizing. The Shiite-led government of Prime Minister Nuri Kamal al-Maliki is also unhappy with Exxon over a separate development deal the company has struck with the leaders of the semiautonomous Kurdistan region in northern Iraq...

Exxon's 2009 deal with the Iraqi government to improve production in the West Qurna 1 field was never expected to be lucrative under the best of circumstances. The government had agreed to pay Exxon and its partners $1.90 for each additional barrel of oil they pumped after refurbishing the already producing field. The fees would barely be enough to cover the companies’ costs. Other deals between Iraq and foreign oil companies had similar terms.

International oil contracts are more typically structured to compensate companies with a percentage from sales or a share of production that takes into account the fluctuating price of oil, so that they can be more profitable for the companies when prices rise.

Western oil companies, shut out of Iraq's oil fields for decades under the government of Saddam Hussein, were willing to do the low-profit, technical service deals to get a foot in the door with the new government that was put in place after the American-led invasion in 2003. Only a few dozen of Iraq’s 80 or so discovered fields are in production, and the government has suggested that it would give more lucrative agreements later to companies that helped the country early on...

Exxon and its minority partners in the project — which include the Anglo-Dutch oil giant Shell — increased output in the West Qurna field by more than 10 percent by last March. That was the trigger point for the Iraqi government to begin paying the companies for their work.

But the payments have not been made, according to Hans Nijkamp, Shell’s country manager for Iraq.

"There are a lot of admin-type issues that we’re working through with the government," Mr. Nijkamp said in an interview...

An Exxon Mobil spokesman declined to comment, saying the company has a policy of not discussing commercial matters.

The Iraqi government awarded 11 oil and natural gas contracts for fields at auctions beginning in 2008. Two other consortiums that won deals and have since raised output by more than 10 percent — those led by BP of Britain and Eni of Italy — have been compensated...

Western oil service companies, including the American giants Halliburton and Baker Hughes, have also made substantial profits working in Iraqi oil fields...

Faisal Abdullah, a spokesman for Iraq’s deputy prime minister in charge of energy, Hussain al-Shahristani, confirmed in an interview in Baghdad in November that the government owed a payment to the Exxon-led consortium, but he did not characterize it as late.

"Exxon has increased output and a small amount of money has not been paid," Mr. Abdullah said. He said the government had not paid Exxon about $50 million, a figure that roughly conforms with estimates by Western oil analysts.

Mr. Abdullah described the delay in paying America's largest oil company as bureaucratic and unrelated to the dispute over exploration contracts in Kurdistan that Exxon signed in November.

However, that deal has caused great consternation. The central government considers deals in Kurdistan illegal. Without an oil law to split petroleum wealth, these agreements are worsening an already poisonous ethnic divide between Kurds and Arabs, officials in Baghdad say.

Mr. Abdullah said that Exxon executives had expressed concerns to officials in Baghdad about the profitability of the West Qurna 1 contract before striking the deal in Kurdistan, suggesting that the Texas-based company was dissatisfied with the deal.

"They said 'We are not getting enough profit from West Qurna 1,'" Mr. Abdullah said. "But that is not true. It is a very big field."

Iraqi officials say they cautioned Exxon not to sign the deal in Kurdistan, even as they were apparently withholding payment for the work in the south.

Ali al-Fayadh, the deputy chairman of the oil committee in the Iraqi Parliament, said in an interview in his Baghdad office that the government was considering banning Exxon from working in southern Iraq because the company had signed the deal in Kurdistan.

From China Daily, Dec. 30:

Turkish warplanes killed 35 civilian smugglers in northern Iraq after mistaking them for Kurdish militants, Ankara's ruling party said on Thursday, promising not to allow a cover-up of an incident that threatens to wreck relations with minority Kurds.

The attack, which Turkey's largest pro-Kurdish party called a "crime against humanity", sparked clashes between hundreds of stone-throwing protesters and police in Diyarbakir, the largest city in Turkey's restive, mainly-Kurdish southeast...

The Turkish military had said its warplanes launched air strikes overnight after drones spotted suspected rebels of the Kurdistan Workers' Party (PKK). The military had denied there were civilians in the area.

But ruling AK Party spokesman Huseyin Celik said initial reports based on local government officials had found the victims were not militants and that most of the dead were cigarette smugglers under the age of 30...

The pro-Kurdish Peace and Democracy Party (BDP) said party leaders were heading for the area and that it would hold demonstrations in Istanbul and elsewhere to protest.

"This is a massacre," BDP Deputy Chairwoman Gultan Kisanak told a news conference in Diyarbakir. "This country's warplanes bombed a group of 50 of its citizens to destroy them. This is a war crime and a crime against humanity."

In addition to demonstrations in Diyarbakir, there were smaller protests in Turkey's largest city Istanbul, where police fired tear gas and water cannon at pro-Kurdish demonstrators.

From AP, Jan. 8:

Iraq's Shiite-led government on Sunday demanded that authorities in the semiautonomous Kurdish region hand over the country's top Sunni official to face terrorism charges, turning up the heat in a political crisis that is stoking sectarian tensions.

Vice President Tariq al-Hashemi traveled to the Kurdish north in December just as the last American troops were leaving the country and charges against him were being drawn up.

The government accuses him of running a hit squad that assassinated government and security officials years ago — allegations he denies. Fellow Sunnis, who made up the dominant political class under Saddam Hussein, see the charges as part of an effort to sideline them.

John McCain meanwhile takes the opportunity to again invoke the partition of Iraq, telling CBS TV's "Face the Nation": "I think there's clearly an unraveling going on which could eventually lead basically into three different kinds of states in Iraq." (AFP, Jan, 8)