Rex Tillerson, CEO of ExxonMobil, met on 21 January with Iraqi Prime Minister Nuri al-Maliki and the following day with Kurdistan Regional Government (KRG) President Masoud Barzani on the sidelines of the World Economic Forum in Davos, Switzerland. While little firm information on the bilaterals emerged, they nevertheless sparked a storm of speculation over potential moves to break the deadlock in the increasingly bitter Baghdad/Irbil oil dispute, fueled in part by Exxon’s investments in the Kurdish north.

The meetings certainly come at a time of crisis. The Kurds have been joined in their opposition to Mr Maliki by both Sunni Iraqis and Sadrists (see p13). And it is not just Baghdad that is under pressure. The federal government’s ban on Kurdish oil contracts is hitting KRG oil sector development and if the threat to cut the Kurds 17% budget allocation is enforced, the region could face serious economic pressure. And ordinary Iraqis everywhere, but especially in disputed territories, have suffered with the spike in violence that has accompanied the rise in political tensions. A 23 January suicide bombing at a funeral in Tuz Khurmatu, south of Kirkuk, in which at least 22 died was only the latest in a series of recent such atrocities. Tuz Khurmatu was the scene of a November shoot-out between Kurdish Peshmerga troops and federal forces which launched the latest escalation in Irbil/Baghdad tensions (MEES, 23 November 2012). (CONTINUED - 1163 WORDS)