Iraqi Kurdistan – “Sold Out!” – Part III

Sheri Laizer | Exclusive to iKurd.net

War On Iraq: US/UK/TURKEY/KRG: Patronage And Plunder

Highly Arabized, the Barzanis see themselves as on par with the Saudi princes.

The Saudi oligarchs and the KDP oligarchs are both Sunni tribal conservatives – one lot originates from the desert and the other from the mountains but their family and administrative conduct shares key similarities in the realms of oil and of human rights, respectively.

Looking back to the former KAZ’s oil ventures

This goes back to the opportunities presented to them under the Clinton Administration – bombing Saddam Hussein and Baghdad constantly in 1998 and exploring Kurdish oil opportunities with the divided KDP and PUK administrations on the other. The Washington Agreement and Koya/Shaqlawa process had more than just ‘peace’ in mind. The 50/50 Agreement of 1992 failed. The power sharing agreement retaining two separate areas was renegotiated in 2006.

In 2017, I published some research under the title, Iraqi Kurdistan, “Sold Out” Part II, from which it is useful to refresh memory before proceeding further: “An MoU, dated July 1998, was specifically set down owing to the 1996 expedient alliance of Barzani with Saddam Hussein against the PUK during their civil war. Clinton favoured weakening the KDP over it… The KDP was making $100,000 to $150,000 from the Khabur crossing trucking illegal oil into Turkey and breaking sanctions. [1] The PUK argued that it was not receiving its share and on May Day 1994, finally attacked the KDP for withholding funds.

To cut a protracted story short, after various efforts to reconcile the two parties, with the PKK also acting out a divisive role, the PUK broke off peace on 16 August 1996 and attacked the KDP, that turned to Saddam on 22 August. On 31 August the Iraqi forces entered to back Barzani and keep control over Erbil, taking Sulaimani on 9 September 1996. The PUK availed itself of Iranian support and retook their traditional seat on 13 October.

The US began attacking the south citing violation of UNSC resolution 688 and the “safe haven” creation. The “Ankara Process’ then kicked off afresh with several rounds of talks between Turkey, the US and the UK lasting through till May 1997.

The Turks meanwhile sent 50,000 troops across to the border to attack the PKK’s mobile base camps inside Iraqi Kurdistan showing their deeper intentions, under the name Operation Sledgehammer. The PUK pulled out from the process on the basis that Turkey favoured the KDP. The two parties returned to battle in September 1997. Various negotiations ensued but importantly in July 1998, David Walsh of the US State Department invited both parties to know out a comprehensive “peace settlement.” The now notorious Oil For Food program was also on the table as was keeping the PKK out of their territory. Meetings between the two leaders and the US government ensued between 2000-2002. [2]

As of 2002, before the ultimate US-led invasion of Iraq from 19 March 2003, oil contracts pre-existed for several foreign companies: Exxon, Genel, Petoil, Prime Natural Resources of Houston Texas, Western Oil Sands, Western Zagros and (then) a later MoU was signed with Iraq in 2004, and yet another with Norwegian oil company DNO (2004). Ayad Allawi chose to collude with Massoud Barzani instead of opposing the independent Kurdish oil scheme and they set up a joint oil company which was registered in Jersey as of 28 June 2004…” [3]

Barham Salih (Northern Iraq Administration) and Mehmet Sepil (Genel Enerji A.S) signed a July 2002 PSC, from which the following clauses derive, witnessed by the US State Department – the main Western broker in the Dublin peace agreement.

It reads; “The Production sharing contract agreement is ‘entered into on July 17, 2002 by and between

(1) Regional Government of Sulaimani… of the Interim Joint Regional Administration of Northern Iraq (hereinafter referred to as “Northern Iraq Administration) as the party of the first part;

(2) as party of the second part, Genel Enerji A.S…

WITNESSETH: Agreement 2002 PDF

WHEREAS, Patriotic Union of Kurdistan and Kurdistan Democratic Party together with the Department of State of the United States of America entered into the Final Statement on September 17, 1998 in Washington D.C (hereinafter referred to as the “Final Statement”)

WHEREAS, the Final Statement is determining the administration of the Northern Iraq as well as the governmental rights…”

The Simple Truth is simple lies

We must also look back to the period before the 1991 uprising and creation of the so-called ‘safe havens’ when Jeffrey Archer was working with Nadhim Zahawi and Brusk Saib [4]. These two men were Archer’s “Good Kurds” as opposed to the PKK being the “Bad Kurds”. He sought to make Nadhim Zahawi and his shadow, Brusk Saib, endearing to the public by endowing them with childish nicknames, Bean Kurd and Lemon Kurd. Nadhim Zahawi was named as Archer’s “advisor” in the scandal over Anglia Television in which Archer’s wife, Mary, held the dominant shares.

Until the televised scenes of Kurd dying on the mountains in freezing temperatures made the headlines in 1991, few Westerners knew or cared who the Kurds were. That is, aside from some keen US and UK government officials, military brass and business entrepreneurs including oil wildcatters and former SAS people. Several of these too, I named in the article above.

I was involved in organizing the Kurdish aspect to the Simple Truth concert before Jeffrey Archer appeared on the scene. The Red Cross sponsored Simple Truth Concert was managed by show business entrepreneur, Harvey Goldsmith. I brought in the most famous Kurdish singer, Shivan Perwer and Kurdish musicians and dancers from London in a show supposed to be about the Kurds suffering in Iraqi Kurdistan. It was Archer who introduced Zahawi – a Kurd from a Baghdad Kurdish family that fell out with Saddam Hussein and moved to the UK in 1976. After regime change, Zahawi’s father went in with IPBD, said to be working in steel but in fact operating security and reconstruction. [5]

Back in the year 2000, Zahawi co-founded YouGov with  Stephan Shakespeare and remained Chief Executive until February 2010. When YouGov was set up, one of its biggest shareholders was Zahawi’s Balshore Investments, based in tax haven Gibraltar. Balshore received around £112,000 in dividends from YouGov. [6] As the Guardian recorded: “Last year (2016) Balshore received around £112,000 in dividends from YouGov. The current tax on dividends for higher rate taxpayers in the UK is 32.5%. There is also no liability to tax on dividends paid by a Gibraltar company to a person who is not resident in Gibraltar…” [7]

As I wrote in “Sold Out”, in 2010, Zahawi took up his position in the UK Parliament with former head of Talisman, John Manzoni [8], after the sale of PSC contracts to Gazprom and Repsol. Manzoni is currently Chief Executive of the UK Civil Service and became Permanent Secretary of the Cabinet Office on 2 July 2015. Zahawi was previously the advisor to Talisman (and to the now defunct Afren) and declared Talisman to be a registered client of his consultancy, Zahawi and Zahawi Ltd. in 2014. He also keeps his profile aloft in the Centre for Kurdish Progress, promoting success among ambitious Kurdish exiles in London. [9] He co-authored a book with his Health Secretary boss, Matt Hancock on the 2007 banking crash. [10]

Oil and gas in northern Iraq

Billionaire hedge fund manager, Paul Singer, of Elliott Ltd. founded Prime Natural Resources in 1997 to go into Iraq with a stake in the Bina Bawi [11] oil block. Prime is a network of oil companies that have been churned up and switched about and include AT Petroleum and Trilax, both offshore. Paul Singer is currently rumored to be working with Nadhim Zahawi [12] on a pharmaceutical company by trying to get in to the network through a major pharmaceutical company. (I will come back to this issue at the end of the article.)

Singer had named Richard Anderson the company’s CEO back in 1997. Anderson had been an accountant at Hein Associates’ in Houston, and then moved to Boots and Coots, the oil-field services firm owned by Halliburton13 from 1999 to 2011. Richard Anderson was the Bush Cheney administration representative, who had worked with Monocrief oil, which carried out joint projects with Petoil of Turkey in the Caspian Sea in the 1990’s. Paul Singer had a close contact in the US government in Prentis B. Tomlinson. Prentis Tomlinson set up Calibre Energy, one of Prime’s partners, [14] for a hidden stake for Ross Perot and then the American privateers came in the back door. Back in 2006, Forbes observed:

“…there is the lure of relatively quick and hefty profits. Early investors in Calibre, …stand to pocket $100 million or so if a new stock offering becomes effective early this year. And there are other western investors in Iraqi Kurdistan. Adjacent to the ridge formation that marks Bina Bawi is a field called Taq Taq, where a Swiss-Canadian group, Addax Petroleum (2006 sales $2 billion), says it found 2 billion barrels in September. Last April Norwegian explorer DNO hit pay dirt–330 million barrels in the Tawke field. Other prospectors include Canada’s Heritage Oil and Western Oil Sands.” [15]

Prime were awarded the Chia Surkh and Taq Taq concessions, but Taq Taq was a joint project with Turkish front man, Mehmet Ali Ak [16], used to straddle two companies for the Turks – Petoil [17] and Genel.

Heritage Oil was formed to go into Iraq way back in 2001. M. Gulbenkian assumed the role of CEO in March 2003 when the US and UK fully invaded Iraq. [18]

According to the now defunct Kurdistan Human Rights Project former chair, Kerim Yildiz, Jalal Talabani had publicly invited the US to invade Iraq from PUK-held territory back on 15 August 2002.

Heritage had its experience in Africa along with several UK spies, army and mercenary actors. Tony Buckingham and Tom Spicer became two of the best known, if notorious figures. Heritage also ties in with Branch Energy. [19] Following US policy he fronted several IOCs for PM’s John Major and Tony Blair. Buckingham moved on in 1999 to Addax with Paul Gander. (Rupert Bowen, Sandline’s representative, and Robin Cook were implicated in the “arms to Africa affair” in 1998 when Sandline International’s role in Sierra Leone was encouraged by MI6.) Bowen was a former MI6 official with a military and diplomatic background. [20] He then became involved with Heritage Oil. He had links to the late Stephen Crouch [21], long active in Kurdistan during the post-1991 period and listed with the Iraqi Research Group (IRG), Iraqi-British Interest Group and the Iraqi-British chamber of commerce and industry. Crouch died in mysterious circumstances [22] in an ‘accident’ when walking his dog. [23]

Barham Salih, former PUK elite and now Iraq’s President was involved in a 2002 PSC contract involving Genel Energy in Taq Taq, attached here.

Heritage then went on to drill the first wells next to Taq Taq in 2004.

Paul Singer with Ross Perot, Hunt Oil and George Bush, also brought Jamal Daniel on board.

Anderson was an experienced oil patch hand, having worked with Houston-based Moncrieff Oil in the Caspian Sea. Around 2000, Moncrieff joint ventured with Güntekin Koksal, one-time top executive for state-run Turkish Petroleum Corp. who in 1990 founded his own company, Petoil.

Singer and Anderson met with Jalal Talabani in 2002 just prior to the company signing a contract with the KRG’s forerunner, the Kurdish Autonomous Zone (KAZ, 1991) under the establishment of the northern No Fly Zone in Iraq.

That year, Talabani signed the first production-sharing contracts with Turkey’s Petoil and Genel Enerji, as referred to above. Genel Enerji was a well-established Turkish oil giant. Petoil was a relatively small explorer that owned refineries and transported oil across the Turkish border. It needed a partner to shoulder some of the risk of operating in this volatile region and cash for exploring the Bina Bawi gas field in the Zagros Fold Belt in Kurdistan that anchored its production-sharing agreement. They became Pet-Prime. [24]

Petoil signed another contract in January 2003 with Bafel Talabani, Jalal Talabani’s eldest son, acting on behalf of the Northern Administration. Qubad, the younger son became Deputy Prime Minister of Kurdistan. The development area in the contract included the Chia Surkh, Kifri and Chemchemal fields. Paul Singer’s Prime Natural Resources, as it turned out, ended up with fifty percent of the contract, according to company documents obtained by U.S. regulatory enforcement officers. The company didn’t disclose its involvement until 2004 because as a private company it wasn’t required to.

According to documents that surfaced in a later British court case, and interviews with regulatory investigators, Bafel Talabani had set up the meeting with Anderson with the understanding that Prime’s involvement wouldn’t be disclosed.

A large batch of illegal oil contracts were first signed in Kurdistan under the Eagle Group in 2004 opening to a further raft of European companies by 2007. Once Tony Blair was out of office in the UK, Bush knew that he was leaving and Hunt Oil, Aspect Energy, Shamaran, GKP, Sterling Energy and so on all went in.

Ashti Hawrami [25] had Adnan Samarrai, country manager of Gulf Keystone Petroleum working in Kirkuk all the way to the Turkish border from 2005 until 2007 preparing the PSC areas. Nadhim Zahawi made $370k on top of his salary as an MP while investors lost [26]. GKP is referred to in the High Court Judgment of 2013 concerning Gulf Keystone, Case No: 2010 Folio 1517 involving Excalibur Ventures LLC. Over a PSC with the KRG.

Zahawi who was very close to Ashti Hawrami, reportedly transferred the convertible debt bonds from Gulf Keystone to Chinese state-owned Sinopec in part – but not all – and it can have made him some $75 million. [27]

Tanganyika Oil also sold two Syrian Kurdish fields to Sinopec [28] named Odeh and Tishrene in PYD- controlled Syria. The fields from Deyrik in NE Syria would therefore join up with Iraqi Kurdistan’s fields outside Zakho at Tawke with Komet drilling at Qush south of Duhok. The aim was to join the fields after getting them out from under the control of ISIS.

Allegedly Zahawi’s men paid ISIS for the oil from them at the time. After ISIS were driven out, the Kurds tried to take all of the Sinjar area as well as the Odeh and Tishrene fields.

Tanganyika Oil sold its interests to Sinopec who own 49% of Taq Taq so that Lundin Petroleum could set up Bayou Blend and then change its name to Shamaran.

Jamal Daniel and the Barzanis, Talabanis, and Kosrat Rasoul.

Och Ziff was key shareholder in Range Energy Resources and Jamal Daniel, and had links with Crest and with Philip May’s Capital Group, and was charged and convicted by the DPA in 2016 settling for $412 million to pay the DOJ and SEC. 29 Range Energy Resources was founded in 2005, after regime change in Iraq in March 2003 further secured Kurdistan’s autonomy has been co-developing the Khalakan Block. [30]

Och Ziff held the largest share in Oryx Petroleum with Barzani, Talabani, Kosrat Rasoul and the late Najmaldin Karim holding 20% privately. [31] In its disclosures Oryx said “The Corporation has received full payment in accordance with Production Sharing Contract entitlements for all oil sale deliveries into the Kurdistan Oil Export Pipeline during June 2020…Notwithstanding restrictions related to the COVID-19 pandemic, including the closure of the Corporation’s offices to regular activity, Oryx Petroleum continues to safely operate the Hawler license area in the Kurdistan Region of Iraq.” [32]

Oryx is also said to have passed control to Zeg Oil and Gas in July last year (2020) and forged a new agreement with the Ministry of Natural Resources (MNR) of the KRG noting the increased benefit to the MNR: “As part of securing consent for the change in control of the Corporation’s interest in the Hawler license area from the Ministry of Natural Resources of the Kurdistan Region of Iraq (“MNR”), the Corporation has agreed to amend certain terms of the Production Sharing Contract governing the Hawler license area. Specifically, the Corporation has agreed to a 22% reduction in the cost pool related to its interest, and to finance all costs attributed to the 35% interest it does not own for the duration of the development period and without a cap on such financing facility. Previously, the Corporation was financing only the costs attributable to a 20% interest in the license, to a maximum of US $300 million. The MNR has agreed to waive any rights it has to audit costs incurred up to December 31, 2020. Depending on actual future revenue and cost profiles, the changes may or may not result in a lower share of future cash flows attributable to the Corporation’s interest compared to the applicable terms prior to amendment…[33]

The corporation changed its name in 2020 to Forza Petroleum, still focused on the Hawler license area. Forza Petroleum claims to have a 65% participating and working interest in that area (in other words, in Erbil- the KDP seat) as well as being the main operator there. The company produced the map reproduced below of the license area, which also shows the surrounding stake holders. [34]

Forza’s CEO, Vance Querio, announced in March 2021: “It is noteworthy that higher oil prices since the start of the year allow us to forecast that our work program can be funded entirely from internally generated cash flow.”

A well informed commentator, Michiel Leezenburg, observed in 2017: “An unknown percentage of these funds has flown directly into KDP and PUK party coffers and into the bank accounts of leading politicians; another part has been spent on various forms of patronage. The most visible, and undoubtedly the most blatant, of these is the direct allocation of funds to those close to the power elites.  Already by 2006, there were an estimated “one thousand millionaires in Sulaimani governorate, and another one thousand in Erbil (Natali 2010: 100). “These millionaires had acquired their fortune through the redistribution of oil income and other revenues rather than through entrepreneurial activities of their own. Rather than constituting an affluent business class as a social force in its own right, they remained entirely dependent on – and hence loyal to – the parties in power…Given the general lack of transparency surrounding the region’s finances, it is quite unclear how much of these oil revenues (or even how much of the 17% of Baghdad’s oil revenues officially earmarked for the Kurdistan region) has ended up with the regional government, and how much has fallen in private hands; but one may surmise that the latter part is considerable, witness the large number of non-entrepreneurial millionaires in the region. Given the lack of transparency and the contested character of oil production, the very distinction between legitimate exports and informal or illegitimate smuggling becomes increasingly difficult to make. Put differently: the role of stable state institutions has been at best minor and at worst imaginary.” [35]

The patronage system was already fully operational with loyal clientelization a pre-requisite for any form of advancement.

Barzani holdings

Highly Arabized, the Barzanis see themselves as on par with the Saudi princes

Let us remember where the Barzanis were before the 1991 uprising – and that it was not the KDP that started it – they were either in Iran or the West. They had very simple apartments and houses in the UK and no cash. They were down at heel, Third Worlders, trying to get an audience in London and Washington. By 1997-98 a Panama-registered oil contract for Massoud Barzani was held by Nahim Zahawi.

Massoud Barzani does not use his name in the companies in which he holds stakes. An early report on his dealings with Turkey is illuminating.36 The Ster Group isjust one company linked with the Barzanis. So too is 77 Construction, based in Erbil, and registered as providing logistical support to US troops with 3,210 employees.37 As the Barzanis demand a stake in every business enterprise they are profiting from every sector from telecommunications through construction. Nothing gets passed without it passing through the Barzani’s hands.

According to the US New Republic: “Tracing the Kurdish fuel deals leads to a Virginia-based logistics company, DGCI. For at least half a decade, DGCI has been the Pentagon’s go-to fuel provider in Kurdistan and has been dogged by questions about its connections to Kurdish politicians.

That section of the article specifically deals with the role played by the Barzanis. It went on: “Most recently, DGCI was contracted by the U.S. military to deliver wildly overpriced jet fuel, American base at the international airport in Erbil, Kurdistan’s capital… On the strength of such deals, DGCI’s annual revenue rose from $2 million in 2015 to about $150 million in 2017. That year, it was the fastest-growing corporation in the state of Virginia and No. 20 in the nation, “with three-year revenue growth of 10,999 percent,” according to a 2017 Virginia Business article…DGCI is paired with a Kurdish conglomerate called Zozik Group; together, they share ownership of a subsidiary called Triple Arrow. Zozik has faced long-standing allegations that it’s a channel for bribes to PUK officials, as detailed in the earlier New Republic investigation. But according to this source, the PUK’s connections don’t explain DGCI’s overpriced deliveries to Erbil, that comes chiefly under Barzani control.

Cables published by Wikileaks. Show that Zozik and DGCI cooperated with companies linked to Barzani’s bloc in order to deliver fuel to the U.S. government…. A December 2017 memo from the KRG Regional Security Council granted special privileges to DGCI and its Zozik-connected subsidiary, Triple Arrow, along with a third, related, subcontracting company, called Rainfloods. They were to be “the only companies vetted and approved to deliver fuel products to Erbil International Airport,” the memo said, decreeing that with one narrow exception for civilian fuel business, “no other companies will be given access. No one from Rainfloods (AKA Repeat Consultants owned by Haval Dosky [38]) responded to requests for comment…three sources in the Iraqi fuel industry identified Rainfloods as a DGCI partner, owned by Mansour Barzani), former head of Kurdistan’s special forces. [39]

Massoud’s elder son, Masrour, former Asayish head and now Prime Minister of the Kurdistan region, is reportedly linked with a shell law firm, Apeks LLC, according to well known commentator, Michael Rubin. [40] Masrour tweeted recently about Kurdistan’s lucrative oil and gas opportunities in tandem with the US Energy Secretary, Dan Brouilette. [41] He also tweeted about inaugurating the $30m cable car project in Mt. Zawa, Dohuk.

Nadhim Zahawi and Paul Singer – Diversification

The small pharmaceutical companies involved in the COVID vaccine are German and the shares and stock are held very tightly by Deitmar Hopp42 and KfW German state bank [43]. This effectively blocks Trump or Biden from trying to take it over due to its unique small bioreactors – 1 metre wide, 2 metres high and 3 metres long.

These bioreactors are in essence printing mRNA vaccine units and can be transported anywhere within 36 hours, ready to set up to produce 100,000 doses of vaccine. They are designed to go to smaller, low income countries and to make vaccines at the first sign of an infectious disease. The technology has taken since 2000 until 2019 to go into action. It has been running trials in Peru, Panama and Manaus Brazil [44], and is reportedly close to having a vaccine that has 100% efficacy against the new variants including the South African variant. Zahawi and Singer are said to want to get hold of it.

The murky Porton Down is to receive £29.3 for developing labs against Covid variants. [45]

Meanwhile, the UK government under Boris Johnson is effectively undermining the non-proliferation treaty on WMD through his plans to build nuclear warheads. The London Economic revealed: “Boris Johnson wants to increase the size of the UK’s nuclear weapons arsenal – a move which could amount to a violation of international law, campaigners and experts have warned.

The government’s integrated defence review, published on Tuesday, revealed Britain would be increasing the size of its nuclear stockpile by 40 per cent, to 260 warheads. [46] Zahawi organized a trip to Iraqi Kurdistan for Johnson in 2015 when the latter was still Mayor of London.

Theresa May appointed Zahawi Parliamentary under Secretary of State at the Department for Education in January 2018. [47] Zahawi first took him to Kurdistan in 2015. He also hosted a meeting in London for Nechirvan Barzani with the UK business community he links with. [48]

Boris Johnson appointed Nadhim Zahawi, already Minister for Business and Industry to become the Minister for “Covid Vaccine Deployment on November 28, 2020 [49]. This has earned him praise and helped smother the past.

Queries continue

Not all are so easily taken in. Crowdfunder’s tweets lie alongside Zahawi’s own self congratulatory tweets.

A Freedom of Information request was made on 18 October 2019 to the Department for Business, Energy and Industrial Strategy concerning Zahawi “with regard to the potential takeover of British Steel by Turkish Ataer Holdings. Rob Davies asked for the following:

Details of meetings or telephone calls between Mr Zahawi and Ataer Holdings, including the disclosure of any correspondence, dating back to his appointment at BEIS.

– Details of meetings or telephone calls between Mr Zahawi and partners of, or employees of, Hannam & Partners, including the disclosure of any correspondence, dating back to his appointment at BEIS.

– Details of meetings or telephone calls between Mr Zahawi and Ashti Hawrami, minister for natural resources of the Kurdistan Regional Government, including the disclosure of any correspondence, dating back to his appointment at BEIS.

– Details of any visits by Mr Zahawi to Turkey or Iraqi Kurdistan within the past six months.

Details of any correspondent, meeting, or telephone call between Mr Zahawi and representatives of the Turkish government, dating back to his appointment at BEIS. [50]

Delighted to have been asked by @BorisJohnson to become the minister for Covid vaccine deployment.A big responsibility&a big operational challenge but absolutely committed to making sure we can roll out vaccines quickly-saving lives and livelihoods and helping us #buildbackbetter

— Nadhim Zahawi (@nadhimzahawi) November 28, 2020

Of related interest, the KRG Finance Ministry is transmitting a first draft of this year’s budget bill for approval to the Parliament – the last time they did this was 2013. The officials claimed it would be more “realistic and transparent.” [51]

A long way to go!

Those children born during the 1991 Kurdish uprising – if they survived – are now thirty-years-old. Unless they have joined one of the two main parties or belong to their families they will not have had real opportunities under their own leaders. As Barzani told me in our 1989 interview over Saddam Hussein’s leadership style, it is about “100% control.”

Related posts:

Barzani and Talabani families are above law in Kurdistan of Iraq How disgusting to see Kurds fight among themselves Dana Gas lawsuit against the Kurdistan Regional Government has come to a halt What is going on with Gulf Keystone Petroleum in Iraqi Kurdistan? Iraqi Kurdistan – “Sold Out!” – Part II KDP and PUK politicians are corrupt and dishonest in Iraqi Kurdistan KDP’s discriminatory rules – Get a job at int’l oil companies in Iraqi Kurdistan Why did the KRG sign an oil deal with an inexperienced, broke company?