Tuesday, February 26, 2008

Lee Myung-bak Puts Marker on Kurdistan; Japan Missing?

China is viewed with some alarm and, yes, some envy for its forays into places where angels fear to tread. But it is the South Korean businesses that have the better-established reputation for risk-taking on the cutting edge of emerging and frontier markets. (Also a reputation for being quick to cut their losses, but some of that may be envy.) Their footprints stretch from Central Asia to sub-Sahara Africa, and the Kurdistan Autonomous Region in Iraq is no exception. In fact, Korean businesses have gone in to cut oil deals with the Kurdistan Regional Government even though the national oil bill to determine control over oil fields, contracts and revenue continues to be stalled in the Iraqi Parliament in a tug-of-war between the Kurds and the central government.

On February 14, South Korean efforts were rewarded when Nechervan Idris Barzani, the KRG Prime Minister and nephew of Masoud Barzani, met President-Elect Lee Myung-bak in Seoul, where the two sides celebrated an oil development deal. For later that day, according to the FT, a “consortium led by Korea National Oil Corp. on Thursday signed a memorandum of understanding with the Kurdish Prime Minister allowing the Korean group to develop energy projects in the Kurdish Autonomous Region.” The consortium includes SK Energy, South Korea’s largest oil refinery. According to this report, the Iraqi oil Ministry had earlier this year halted SK Energy’s oil exports “in response to what it [said] were illegal oil exploration deals with the Kurdish regional government.”

So South Korea’s state-owned oil corporation join in cutting a deal with the KRG in defiance of Iraq’s central government, to which South Korea’s President-Elect gives his blessing and is rewarded with a not-quite state visit. It probably helped that South Korea has, as Mr. Barzani duly noted, troops on the ground in KAR, in the Erbil City neighborhood.

Absent from news reports with regard to Mr. Barzani’s visit was any mention of Roh Moo-hyung, who still had ten days left in his tenure as President. But it is even more notable that Mr. Barzani did not bother to stop over in Tokyo. I used to wonder, early on, why Japan was not sending its troops to Kurdistan. After all, the Kurds asked for them, and it would have been safer than Samawa, where the non-combat Self-Defense Forces eventually went. Now, it’s too late, in more ways than one.

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