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DE RUEHGB #3915/01 3361713
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O 021713Z DEC 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4617
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 BAGHDAD 003915 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 12/01/2017 
TAGS: PGOV PTER EPET ENRG TU IZ
SUBJECT: KRG OFFICIALS DISCUSS WITH DEPUTY SECRETARY LACK 
OF POLITICAL PROGRESS, HYDROCARBONS, TURKEY/PKK AND MOSUL 
 
Classified By: Charge d'Affaires Patricia A. Butenis for reasons 1.4 (b 
) and (d). 
 
This is an Erbil Regional Reconstruction Team message. 
 
Summary 
------- 
 
¶1. (C)  In November 28-29 meetings with Deputy Secretary 
Negroponte, S/I Satterfield, Ambassador Charles Ries, and 
Senior Advisor David Pearce, KRG PM Barzani and VP Rasoul 
praised Iraq,s improved security while criticizing PM 
Maliki,s failing performance and cautioning that security 
gains could be undone by flagging political progress. 
Barzani stated that the KRG would soon more actively wield 
its parliamentary influence to drive political change in 
Baghdad.  Barzani claimed the KRG was waiting however until 
the Security Council adopted a new Chapter 7 United Nations 
Security Council Resolution (UNSCR) to authorize 
Multi-National Forces-Iraq (MNF-I) for another year as well 
as the conclusion of the Declaration of Principles for a 
Long-Term Relationship of Cooperation and Friendship (aka the 
strategic agreement) with the United States.  PM Barzani 
agreed in principle to a process to move past the technical 
difficulties in concluding the KRG,s hydrocarbon 
legislation.  That process would include harmonizing the July 
and February texts of the hydrocarbon law, determining a 
precise list of oil fields, and agreeing to the revenue 
sharing law.  Barzani and Rasoul agreed that continued 
coordination on combating the PKK was necessary and welcomed 
the opportunity for engagement and intelligence sharing; and 
agreed to cooperate on fighting a growing Al-Qaida threat 
moving north as insurgents are denied sanctuary in southern 
and central provinces.  Barzani noted the recent visit of 
United Nations Special Representative De Mistura as 
&excellent,8 and agreed a new way forward on Article 140 is 
needed with U.S. and UN help.  End summary. 
 
 
PM Barzani:  Security Gains Can Be Undone by Lack of 
Political Progress; Maliki,s Performance:  &A Failure; Time 
to See Some Changes8 
--------------------------------------------- ------- 
 
¶2. (C) Kurdistan Regional Government (KRG) Prime Minister 
Nechirvan Barzani and Vice President Kosrat Rasoul praised 
the overall improved security situation in Iraq but cautioned 
that the improvements would be undermined without parallel 
political progress in Baghdad.  They criticized Iraqi Prime 
Minister Maliki for his lack of flexibility in dealing with 
issues, unwillingness to change, and lack of political 
progress.  PM Barzani complained that Maliki,s reluctance to 
share authority for key portfolios had created a system that 
failed to function.  Barzani said the KRG was &tired of 
dealing with Maliki;8 that he was unable to establish good 
working relations with other political groups; and that 
despite the KRG,s past support for the prime minister, it 
was &time to see some changes.8 
 
¶3. (C) Deputy Secretary Negroponte and S/I Satterfield noted 
our concern over the lack of political progress and 
encouraged Barzani to use the Kurdish party bloc,s 
parliamentary leverage to impact policy and send a message to 
PM Maliki that more needed to be done to move forward on 
critical issues.  Barzani took the point but claimed that the 
KRG was waiting first for the adoption of the next UNSCR 
authorizing the MNF as well as for the conclusion of the 
strategic agreement with the United States.  The KRG, Barzani 
claimed, did not want to complicate progress on those vital 
issues.  He indicated that he would take up the issue with 
President Masoud Barzani, who would be returning in early 
December from medical treatment in Germany. 
 
 
KRG Agrees to Process to Push Past Hydrocarbon Impasse 
--------------------------------------------- -- 
 
¶4. (C) The Deputy Secretary raised the lack of progress on 
resolving the hydrocarbon legislation issues and stressed 
that the legislative agenda needed to move forward in step 
with security improvements in order to show tangible results. 
 Left unresolved, the hydrocarbon issue risked undermining 
U.S. political and public support for Iraq and could scare 
off large oil and gas investors over time.  PM Barzani 
expressed willingness to resolve the issue but indicated the 
KRG,s misgivings over Baghdad,s moves to exert more 
centralized control over the industry.  Trust was the issue. 
He indicated that the KRG was ready to sign the revenue 
sharing law -- with nothing to add to it, but took issue with 
the article in the February text of the hydrocarbon law that 
allowed for KRG contracts/production sharing agreements 
(PSAs) to be reviewed by &Baghdad,8 arguing this was 
 
BAGHDAD 00003915  002 OF 003 
 
 
tantamount to a veto. 
 
¶5. (C) Ambassador Ries clarified that the February text, in 
accordance with the constitution, provided for a 60-day 
review of contracts by the independent Federal Oil and Gas 
Council; that the hydrocarbon law, together with the revenue 
sharing law, guaranteed a regional role in the oil and gas 
sector; and that as oil prices rose, the KRG,s influence in 
the sector would rise )- provided the legislative package 
was concluded as soon as possible.  Responding to Barzani,s 
concerns, Ambassador Ries proposed (1) convening a 
non-political technical committee to correct the July draft 
of the law (which Barzani complained the Shura Council had 
substantively altered) so that it was consistent with the 
February text; and (2) and to open negotiations on a precise 
and accurate list of oil and gas fields according to the 
following four categories:  (a) discovered and developed; (b) 
discovered and near-developed )- categories that the Iraqi 
government would control;  (c) discovered and 
far-from-developed; (d) not discovered )- categories in 
which regional PSAs could apply.  Ries stressed that the 
package would need to include a corrected and agreed February 
text, a precise list of fields, and an agreed revenue sharing 
law; and that it all must be legally sound and possible to 
implement.  The KRG,s trust issues could be resolved by a 
close eye to oversee the process, and that this process 
offered the advantages of a definitive time frame, clear 
parameters, and an absence of political influence.  PM 
Barzani indicated the KRG would want to review the make-up of 
the technical committee but agreed to the process as a way 
forward.  Ambassador Ries said that  the Secretary has asked 
Under Secretary Reuben Jeffery to travel to Iraq in the 
coming weeks to discuss next steps. 
 
 
Situation with Turkey Calming:  Ongoing Need for 
Coordination on PKK 
--------------------------------------------- --- 
 
¶6. (C) The Deputy Secretary noted that the situation with 
Turkey over the PKK had calmed but stressed the need for 
continued consultation and cooperation, including in the area 
of intelligence, between Iraq and the U.S.  The situation 
still required great care and coordination of effort between 
the U.S., Iraq, the KRG, and Turkey, and we needed to do the 
maximum to avoid any destabilizing action by Turkey. 
Ambassador Negroponte expressed appreciation for measures the 
KRG has taken to date to counter the PKK and pointed to the 
potential for developing a stronger Iraqi-Turkish strategic 
relationship once the PKK threat was resolved.  Vice 
President Rasoul offered that the KRG stood ready to 
coordinate with the other governments on the PKK issue, but 
turned to the familiar argument that support for the PKK 
would dissolve if the rights of Kurds in Turkey were 
respected.  A general amnesty (by Turkey for the PKK) would 
change the overall dynamic of the problem.  The Deputy 
Secretary responded that one could support democratic rights 
 
SIPDIS 
for the Kurdish people in Turkey while rejecting and 
confronting terrorism; the two were not mutually exclusive 
)- the question was how to apply both principles 
effectively.  Ambassador Satterfield noted that the Kurds, 
situation in Turkey was moving forward; that any military 
action would jeopardize this progress; and that the PKK,s 
strategy had less to do with agitating for Kurdish rights 
than with polarizing Turkish politics by destabilizing 
southeastern Turkey.  PM Barzani said there was broad 
agreement that the PKK was a problem, and Vice President 
Rasoul welcomed the opportunity for continued engagement on 
the issue. 
 
 
Support for New Mosul Operations Command 
---------------------------------------- 
 
¶7. (C) Senior Advisor David Pearce noted that Ambassador 
Crocker had asked that we raise the GOI's intent to establish 
a Mosul Operations Command.   This has our full support. 
The GOI also will appoint MG Riyad as commander of the MOC. 
He has our full support, and we expect our friends to 
cooperate with him as we try to calm the atmosphere and face 
a common AQI enemy in Ninewa. Ambassador Satterfield stressed 
our critical operational concern (as we increased pressure on 
Al-Qaida elements) to continue to deny them opportunities to 
regroup and gain strength in KRG border areas.  Barzani 
readily agreed to cooperate seriously in confronting Al-Qaida 
as it looked for new havens in the north. 
 
Barzani Open to UN Involvement on Article 140 
--------------------------------------------- 
 
¶8. (C) On Article 140, Barzani said that time is heading to 
the end point; a solution is needed.  United Nations Special 
 
BAGHDAD 00003915  003.2 OF 003 
 
 
Representative De Mistura visited Erbil and it was 
&excellent8 to have him here, Barzani noted.  We want the 
U.S. to engage on Article 140 and have the United Nations 
help us technically.  We need to find a way out by end of the 
year and avoid problems with public reaction to further 
delays.  Ambassador Satterfield replied we fully support and 
encourage implementation of Article 140, but agree there will 
not be resolution by year,s end.  We hold the same position 
as yours on UN involvement. 
 
¶9. (U) The Deputy Secretary's party has cleared this cable. 
 
BUTENIS