The Tawke oil field, just south of Iraq’s mountainous border with Turkey, is a bare, windblown patch of hills in one of the Middle East’s most isolated corners.
Three hundred miles north of Baghdad, it is also four hours by road from the nearest international airfield and hundreds of miles from the nearest seaport. But on April 12, 2005, more than 100 dignitaries from around the world trooped up to this bleak turf to observe a bit of history. One year earlier, a scrappy Norwegian oil company called DNO had become the first foreign business since the U.S.–led invasion of Iraq, in March 2003, to purchase oil-drilling rights in the Kurdistan region; defying skeptics, the Norwegians had shipped in millions of dollars’ worth of infrastructure and equipment, built an oil workers’ camp, and brought in technicians from the Philippines, India, and Scandinavia. Now DNO had invited Kurdish officials, local luminaries, and assorted friends of the region to witness the launch of the first exploratory oil well on Kurdish soil in two decades.
Beneath a cloudless sky, the towering Qandil mountains along the Turkish frontier lent a touch of grandeur to the scene. Executives and engineers from DNO took seats on sofas inside a tent erected in front of a Chinese-made drilling tower. Former peshmerga — Kurdish freedom fighters — guarded the facility with automatic weapons. Top officials of the Kurdish regional government (KRG), including Nechirvan Barzani, then prime minister, joined the DNO brass. So did one of Norway’s wealthiest investors, the London-based Endre Rosjo, who had formed a partnership with the oil company.
Rounding out the entourage was Peter Galbraith, then 54. The son of famed Harvard economist John Kenneth Galbraith, Peter was the former U.S. ambassador to Croatia, a longtime friend of the Kurds, and one of America’s most courageous and hands-on diplomats. He had become famous for chronicling the destruction of Kurdish villages by Saddam Hussein in 1987 while serving as a staffer on the Senate Foreign Relations Committee, and for alerting the world to the Kurdish refugee crisis at the end of the 1991 Gulf War. After teaching national-security strategy at Washington, D.C.’s National War College, Galbraith left in late 2003 to sign on as a paid, then subsequently unpaid, consultant to the Kurds; in that role, he spearheaded their constitutional negotiations with Iraq’s central government as they pushed for regional autonomy and for control over their own oil riches. Galbraith, looking very much the diplomat in a black-and-gray pinstripe suit, took an honored place in the front row. As the giant drill began its work — it would ultimately burrow 10,000 feet into the carbonate rock — the crowd burst into applause.
Not everyone shared this enthusiasm. In Baghdad, central government officials reacted with rage to the news that DNO was drilling. These officials considered the Kurds’ sale of Iraqi oil rights to be illegal and warned that it threatened to polarize further a country already fracturing along ethnic and religious lines. When Karsten Tveit, the Middle East correspondent for the Norwegian national television network, sought out Galbraith, the former ambassador shrugged off Baghdad’s objections. The Kurds were “on safe ground,” he insisted. “The Iraqi Constitution is completely clear about it.” The fact that the constitution wouldn’t be ratified for another six months didn’t concern him: Galbraith, who’d had a hand in writing the document, seemed confident of what the final draft would say about Kurdistan’s oil reserves. Iraq’s government was responsible for petroleum in existing fields, he explained to Tveit, but the constitution “was silent” about new fields, including Tawke: “Everything [in Kurdistan] not listed as the exclusive power of the federal government belongs to [the Kurds], and [Tawke] falls into that category.”
In the era of Photoshopped everything, you’d be forgiven for thinking that the picture of an exploding oil tower that topped our story about Iraqi Kurdish oil fortunes was a digital rendering. But as you’ll see from this video, Fast Company hired a pyrotechnics crew in Texas to explode the real thing.
Years would pass before Tveit discovered that Galbraith was hardly a disinterested observer that day. In late 2009, Dagens Naeringsliv, a respected Norwegian paper, uncovered documents showing that nearly a year before the Tawke (pronounced taw-kay) ribbon cutting, DNO executives had quietly given Galbraith, along with Norwegian businessman Rosjo, a combined cut of 10% of the field’s future revenue. The stake was Galbraith’s compensation for having helped the company secure its exploration-and-production contract, a contract far more favorable to the Norwegians than the type favored by the central government in Baghdad — and one made possible only if Kurdistan enjoyed the very autonomy Galbraith had been advocating.
Galbraith’s deal with the Norwegians has since dissolved in acrimony after Kurdistan passed a new 2007 oil law disallowing certain third-party investors. DNO dropped both Galbraith and the Yemeni businessman who took over Rosjo’s share, saying the agreement was contingent on approval from the KRG; the men have taken DNO to court for breach of contract and, even now, stand to do quite well: They could walk away with as much as $144 million in damages. (DNO has offered $12 million to settle.) Today, Tveit still feels misled by Galbraith. “He called himself a consultant,” Tveit tells me. “He never said that he had a personal economic interest. It was clear he was hiding it.”
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As Iraqi Kurdistan shakes off the destructive legacy of Saddam, the regional government is teaming up with dozens of foreign oil companies to exploit an estimated 60 billion barrels of crude lying beneath its territory. Tens of billions more lie in the disputed oil fields around Kirkuk, a potential flash point now ringed by Iraqi troops, and in other areas just south of the Green Line, the armistice line negotiated by George H.W. Bush during the U.S. ouster of Saddam’s forces from Kurdish territory after the Gulf War. The oil reserves remained untouched during decades of Kurdish rebellion, wars, and economic sanctions; the Kurds, who have repeatedly pushed over the Green Line in an attempt to maximize their reach, believe it’s time to claim their due. And the foreigners are only too happy to help. Sadi Pire, a Kurdish ruling-party official and a candidate for Iraqi Parliament, told me that by 2012, if all goes well, “We will export 400,000 barrels per day.” This is modest against the estimated 2.5 million barrels per day exported by the rest of Iraq, with the world’s fourth-largest reserves, but it will be crucial to Kurdistan’s recovery after decades of destitution. (Iraq’s oil minister, Hussain al-Shahristani, said recently that capacity could reach 12 million barrels per day by 2015.)
Badly needed as that oil money may be for the Kurds, it remains elusive, and the furor over the Galbraith deal is just one indication that the oil rush is creating a backlash. In their eagerness to throw open the taps, the foreign companies have waded into a bitter dispute between the Kurds and Baghdad over the authority to hand out oil contracts — and the extent of Kurdish autonomy. In the 2003 — 2005 constitutional negotiations, the Kurds, at Galbraith’s urging, secured control over the peshmerga, as well as the right to manage their own domestic affairs and an agreement with Baghdad to jointly manage oil fields in the region. The constitution, however, left open to interpretation precisely who was empowered to grant drilling contracts and on what terms. Today, the Iraqi government says that deals made by the KRG were high-handed, opaque, and based on a local oil law that the central government doesn’t recognize. “We do not consider those contracts legal,” Thamir Ghadhban, a former Iraqi oil minister and a member of Parliament who now heads the prime minister’s council of advisers, tells me. “They were done without the consent, the cooperation, or the coordination of the Oil Ministry in Baghdad.” Or as Oil Ministry spokesman Asim Jihad has said, foreign companies in Kurdistan are “trying to enter Iraq through the window. They should come in through the front door.”
The foreigners’ role is still more complex and controversial. Besides Galbraith, whose service in the State Department began under President Clinton, the figures include retired General Jay Garner, who coordinated humanitarian operations along the Iraq-Turkey border at the end of the Gulf War in April 1991 and returned to Iraq after the 2003 invasion for a brief, ill-fated stint leading the reconstruction effort. Garner, and his deputy, Colonel Richard Nabb, signed on in 2008 with Vast Exploration, a small Calgary, Alberta-based company that secured a deal that year for a Kurdistan oil field and has invested $100 million in oil rigs and other infrastructure. Then there’s Richard Perle, chairman of President Bush’s Defense Policy Board Advisory Committee from 2001 to 2003. One of the principal architects of the Iraq war, he sought, according to The Wall Street Journal, an oil-field deal in Kurdistan in 2008 with a Turkish firm, AK Group International, in partnership with Houston-based Endeavour International. Perle was reportedly pursuing the coveted Khurmala Dome, which lies on contested land south of the Green Line and is potentially one of the richest sites in Iraq. He acknowledges to Fast Company, “I talked with the Kurdish ambassador [Qubad Talabani], in Washington, more than a year ago” about exploring oil projects in Kurdistan, but calls the Journal‘s description of the proposed deal “fantastic” and says that in the end, “I did not do any transaction.”
Texas oilman Ray Hunt is also in the mix, with a contract for a parcel known as Ain Sifni. Hunt, a George W. Bush “Pioneer” donor and former Halliburton board member who inherited most of his father’s H.L. Hunt Oil Co., served on Bush’s Foreign Intelligence Advisory Board. Even Zalmay Khalilzad, the former U.S. ambassador to Iraq and Afghanistan and now the president of Khalilzad Associates, a Washington consulting firm, recently set up shop in both Baghdad and Erbil to help U.S. and European companies looking to do business in Iraq, including Kurdistan. Khalilzad, who was an adviser to the Bush Administration in the run-up to the 2003 invasion, conceded, through a spokesman, that oil companies are among those to whom he offers “risk-management assessment” but rejected “categorically” allegations that he has helped companies procure “oil blocks” in Kurdistan. “I take into account the sensitivities,” he tells me. “I’m very careful about whom to represent, what to get involved in.”
Many Kurds welcome the outsiders, who bring investment capital, technological know-how, and, in some cases, a proven commitment to the Kurdish cause. But their involvement, especially that of former Bushites, troubles others. Critics point out that during the run-up to the 2003 invasion, the administration consistently denied that the U.S. was going to war for crude. “It is an out-and-out lie,” Perle told Ohio congressman Dennis Kucinich on NBC’s Meet the Press in February 2003, after Kucinich suggested that terrorism might not be the only motive for waging war. The petro rush, these critics say, now gives off a whiff of opportunism. “It is getting clearer and clearer that their interests are all focused on oil,” contends Aiyob Mawloodi, an editor at The Kurdish Globe, an English-language newspaper in Erbil.
There’s widespread dismay among the Kurds that many deals with foreign companies were done in secret, raising the possibility of favoritism or even corruption. The contracts by U.S. firms also appear to fly in the face of official U.S. State Department policy, which insists that no contracts should be signed until Iraq’s Parliament passes a final, binding oil law. A 2008 investigation by the U.S. Congressional Committee on Oversight and Government Reform concluded that both State and Commerce department officials had privately encouraged Hunt Oil to go ahead with its contract, even as State’s official position to the press and Congress was that such a deal could be “illegal.” In July 2008, Henry Waxman, chairman of the committee, wrote to then secretary of state Condoleezza Rice accusing Bush administration officials of “misleading” the public. Waxman warned that Hunt’s contract “complicated the efforts to enact a national oil law for Iraq,” and that it could fan tensions “because of the widespread suspicion in Iraq and other nations that the United States went to war to gain access to Iraqi oil.” Hunt Oil declined to comment for this article.
The situation is made more delicate by the fact that some tracts — Hunt’s Ain Sifni, for example — lie in territory claimed by Baghdad, south of the Green Line. “The Kurds are in de facto control of Hunt’s oil fields, but if Baghdad takes control, Hunt will be in real trouble,” says the International Crisis Group’s Joost Hiltermann, an expert on Kurdish oil. Hiltermann says that once U.S. troops pull out, political dialogue could collapse and violence might well erupt. He adds: “Everybody is just waiting.”
The seeds of possible confrontation are already in the ground. Last year, DNO and Turkey’s Genel Enerji demanded that the Kurdish government pay for the oil they had already put into the pipelines. “The companies are almost broke,” explains Hiltermann, “and the KRG said, ‘Sorry, that’s Baghdad’s responsibility.’ ” Baghdad refused to pay, saying it didn’t recognize the contracts and that the Kurds should pay out of the 17% of oil revenue it receives from the central government for oil sales elsewhere in the country. (All revenue from Iraqi oil sales, including those in Kurdistan, goes directly to the central government, which then distributes cash among the regions according to population.) As the stalemate wore on, the Kurds cut off all exports. “The companies,” says Hiltermann, “have received not a single penny since investing.”
But the issue is about far more than money: With a national election imminent, the Kurds agree in principle that the oil they produce belongs to all Iraqis, but they demand the right to determine who their partners are and under what terms they come in. Iraqi nationalists, meanwhile, see those determinations to be the job of the state. In their greed, the nationalists charge, the oil companies and the Kurdish government have incited separatism and deepened suspicions that could tear the country apart.
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Kurdistan sits on a fold belt — the meeting of two tectonic plates that created both the high mountains along the Iranian and Turkish borders and anticlines, small hills of carbonate rock, beneath which crude has been accumulating over the past 50 million to 70 million years. British geologists traveling in the region after World War I sank the first well near Iran in 1919 and eight years later hit the jackpot with the discovery of the fields of Kirkuk. The first oil flowed by pipeline to Haifa in July 1934, and the Kurdish oil industry was born.
After the Kirkuk find, however, the search for oil in Kurdistan largely stopped. Decades of rebellion, the outbreak of the Iran-Iraq war, Saddam’s gas attacks against the Kurds, and the 1991 Gulf War chased away potential investors. “Nobody wanted to come to Kurdistan,” says Adnan Samarrai, country manager for Gulf Keystone, a British-American firm in Erbil, who himself was seized by peshmerga, while conducting a geological survey for a British oil company in 1962, and held for six months. It was only after the U.S. invasion in 2003 that the Kurds consolidated control of their territory and turned to exploiting the riches that had been untapped for so long.
Nowhere is the optimism of the post-Saddam era more apparent than in Erbil, the Kurdish capital. I arrived in Iraqi Kurdistan in January — crossing overland from eastern Turkey — and reached Erbil after a four-hour drive from the border, past barren hills and peshmerga checkpoints. Now a boomtown of 1 million people, Erbil moves to the rhythms of dozens of foreign oil companies — Aspect Energy, Dana Gas, DNO, Gulf Keystone, Hunt, OMV, Reliance, Sterling Energy, WesternZagros. Many outfits have set up offices in gated communities such as the English Village, a slice of American suburbia with villas lining quiet cul-de-sacs. New shopping malls, office towers, hotels, and estates are springing up at every intersection. “When I first came to Erbil in 1998, it was a ruin, totally neglected, but now it’s a different city,” Mawloodi, of The Kurdish Globe, tells me. He says Erbil has grown by more than 50% in the past seven years. The lobby of the Sheraton, built just after the U.S. invasion, serves as the town’s de facto boardroom, one surrounded by 8-foot bomb-resistant concrete blocks known as “Texas barriers.” Kurdish politicians and a smattering of foreign businessmen fill the lobby, chain-smoking, talking quietly among themselves or on cell phones.
Here, I meet Kiwan Siwaily, production and field manager of KAR Group, a Kurdish company that has the contract to drill in the fabled Khurmala Dome. A young oil engineer who received his doctorate in Germany, Siwaily returned home in 2007 to advise the Ministry of Natural Resources and grab a stake in the oil business. KAR had been the first company to pump oil from Kurdistan in the post-invasion era. “The first oil ceremony was in June 2009, and I was there, opening the valve in Khurmala,” he tells me. “We sent it through the Iraqi pipeline to Kirkuk and through Turkey.” The sight made him euphoric. “We lost 80 years, from 1927, when oil was discovered in Kirkuk. We can’t wait any longer.”
One day, I set out with Sadi Pire, the would-be Iraqi parliamentarian, on a campaign tour of rural Kurdistan. We stop for a meal at the hilltop home of a retired peshmerga, his face scarred by a phosphorus bomb dropped by Saddam’s air force in 1987. Over a spread of goat kebabs and fresh naan, Pire tells me how in 2007, with the draft for an oil law stalled in Baghdad, the Kurdish government went ahead with its own law: It created a standard oil contract, then partitioned the territory into dozens of oil blocks and invited foreign oil companies to bid. “We had a gentleman’s agreement” with the central government, Pire says: “If the Iraqis could not finish an oil law by May 2007, then Kurdistan would be authorized to sign the contracts directly.” Baghdad officials say no such agreement existed and that the Kurds went ahead with deals unilaterally.
The terms of the 2007 Kurdish oil law were far more favorable to foreign oil companies than those the Iraqi government was offering — providing a powerful incentive to foreign companies to push for maximum autonomy for the Kurds. Instead of offering “service contracts,” under which the Iraqi government keeps 100% ownership of the oil and pays the companies a fixed amount for every barrel, the Kurds offered “product-sharing contracts,” with Kurdish government participation limited to 20% ownership plus a 15% royalty. Dozens of oil companies descended on Erbil, some backed by U.S. figures whom Pire knew well, especially Garner and Nabb. “They supported the struggle of the Iraqi opposition for a long time, without thinking about a deal,” Pire told me, as we got into the back of his Toyota Land Cruiser and headed down the road to Erbil. “In difficult times, we know who our friends are.”
Few were better positioned for a deal than Vast Exploration, a subsidiary of Toronto-based Forbes & Manhattan, which had Garner on its advisory board. After Kurdistan opened its oil bazaar, Vast president and CEO Ahmed Said tells me, Garner told executives at Vast and its parent company, ” ‘Why wouldn’t you consider Kurdistan? I have tremendous relations, lots of experience and know-how.’ ” Garner brought in Nabb, who had earned the Kurds’ gratitude in 1991 when he deployed a force of British Marines in the border town of Zakho and scared Saddam’s spies and soldiers all the way to Dohuk, 50 miles further south. Nabb, says Said, was “one of the brothers in the [Kurdish] family.” Garner and Nabb took several trips to Erbil with Vast executives, “and made the introductions to the right people,” Said continues. “By 2008, the competition for oil blocks was [fierce] and having these two people on board brought us credibility.” Vast secured a block in late 2008 estimated to contain 2.7 billion barrels of oil. Says an exultant Said: “We tell people we are one of the most highly connected groups in Kurdistan today.”
By early 2009, the Iraqi and Kurdish regional governments were heading for a clash. Ignoring warnings from Baghdad, the Kurds had distributed oil rights among more than 30 foreign companies from Austria, Great Britain, Norway, Turkey, the United Arab Emirates, the United States, and half a dozen other countries. A war of words had broken out between Kurdistan’s minister of natural resources, a British-educated engineer named Ashti Hawrami, and Iraq’s minister of oil, Hussain al-Shahristani. Besides questioning the deals’ legality, the Iraqi government claimed that the deals weren’t transparent. Even some Kurds say that Baghdad has a point. One Kurdish-Iranian businessman I met in Erbil, who is attempting to build a small oil refinery in Kurdistan, tells me that the system is “full of corruption” and that demands for kickbacks are common. Although the Kurdish government has made public a few finished contracts (including the one with DNO), it has refused to release documents showing how any of the deals were done. The Kurdish Globe‘s Mawloodi says the Kurdish government has refused his requests for information. “I asked, ‘How did you announce the tenders? On what basis did you choose the companies?’ And they said it was not public,” he tells me. “But these are oil contracts related to the whole nation. It should be made public.”
In his 2006 memoir about the Iraq war, The End of Iraq, Peter Galbraith writes of having been affected by the horrors he witnessed in Kurdistan in 1987, when Saddam Hussein ramped up a genocidal campaign against the Kurds in the closing days of the Iran-Iraq war. This campaign, known as Al-Anfal, or “the spoils of war,” culminated in sarin gas attacks on Halabja and other Kurdish villages that killed as many as 180,000 people.
That experience bound Galbraith tightly to the Kurds, he wrote, and, years later, in the wake of Saddam’s fall, he believed they should take full advantage of weakness and sectarian and political division in Baghdad. It was a seductive message for a proud and long-suffering populace, but not without its risks. “He was pushing the Kurds to defend the toughest position possible [against Baghdad],” says one journalist, who met Galbraith at a gathering of former peshmerga and Kurdish politicians in Erbil in 2004 and knows him well. The correspondent points out that the Kurds have repeatedly tried to extend their border into Turkey, Iran, and Iraq, only to provoke powerful governments and wind up with nothing: “At the meeting, [Galbraith] said [to the Kurds], ‘You’ve never had a better chance for independence.’ I and several other Western journalists said to him, ‘This is irresponsible. The Kurds are notorious gamblers, and they have lost time after time.’ “
Galbraith lays out his logic in his book: “While they had secured support from the Iraqi opposition for federalism, the Kurds had yet to think through some practical issues. What powers would belong to Kurdistan and what to the central government in Baghdad … Who would control the police and security forces? And there was the all-important question, Who would own the oil of Kurdistan?” Galbraith never mentions his stake in DNO in the book but states that he played the lead role in unifying Kurdish leaders behind an aggressive position: “Kurdistan should, I argued, own and manage its own oil resources.” Summing up his contribution, he writes, “These ideas eventually became the basis of Kurdistan’s proposal for an Iraqi Constitution.”
The result of Galbraith’s negotiating position, and the cause of the present crisis, was Article 112, which left open the question of the administration of oil reserves in “future” fields. Should oil fields that have already been identified but not yet exploited be included? “It was unclear whether the regions or the [Iraqi] central government have control over future oil fields [or] how you even define a ‘future field,’ ” says Hiltermann of the International Crisis Group. The silence was deliberate. “They could never have gotten [the constitution] passed otherwise,” Hiltermann says. Yet by leaving the language vague, Article 112 set the stage for bitter argument. Reidar Visser, an Iraq expert with the Norwegian Institute of International Affairs, in Oslo, says that the Kurds’ position “undercuts the vision of a government able to pursue a coherent policy. Baghdad feels it should be in control of the total output from Iraq.” He thinks Galbraith’s hard line was predicated on the belief that the central government would roll over or simply disintegrate: “[He thought that] Iraq was headed for partition, so it was natural that the Kurds should control their own oil fields. But Iraqi nationalism proved to be more resilient.”
When The New York Times repeated late last year, on its front page, the Norwegian newspaper’s revelations about Galbraith’s relationship with DNO, it confirmed Baghdad’s suspicions that the Kurdish system had been corrupted. Galbraith has been trying to explain himself ever since. In a phone interview with Fast Company from his home in Vermont, he says he was pushing hard for an independent — or largely autonomous — Kurdistan long before he thought about an oil deal. And, he adds, as a private citizen, he had every right to profit from his Kurdish connections.
Galbraith insists that he finished his paid advisory role for the Kurdish government months before he became involved with DNO. “The Kurds put forward their proposals for the Iraqi Constitution on February 11, 2004, proposals that included Kurdistan control over oil on its own territory,” he said in a statement late last year. “At that time, I had no relationship with DNO, and DNO had no involvement in Iraq.” Magne Normann, the company’s managing director, refused to comment on when Galbraith began his association with DNO. The company finalized its deal for Tawke on June 25, 2004.
Galbraith does acknowledge that he continued to work as an unpaid adviser to the Kurds after the constitutional proposals were submitted and the DNO deal was signed, although he’s quick to point out, “I was not in the room. I was not a negotiator.” As he explains to me, “I offered advice to people, who knew, of course, that I had put together this deal, that I had a financial interest in it, who nonetheless wanted my advice, and it was given to them. It was quite a normal thing.”
Not everyone agrees. Says Visser: “From the moment he acquired an economic interest in this oil field, he should have stayed out of the constitutional process, because anything he touched from that second was tainted.” And Galbraith’s “financial business,” says Ghadhban, the former Iraqi oil minister, has exacerbated an already tense situation. “It raises a lot of questions. In Baghdad, it has strengthened those who were opposing the [Kurdish] contracts.”
Galbraith briefly returned to public service in 2009 as deputy head of the United Nations mission in Afghanistan; he has become increasingly bitter about the criticism, telling me that The New York Times has conducted a “smear campaign” against him. Galbraith, who also has a house in Norway, further accuses Norwegian oil interests of conspiring with the Norwegian media, after he feuded publicly with — and was eventually fired by — his Norwegian boss at the UN, Kai Eide, over how to deal with fraud in the recent Afghan elections. (Eide left his post in February.)
Galbraith brushes off the chance of violence breaking out between the central and Kurdish governments and believes the two parties will soon iron out their differences. “Thirty companies have invested billions of dollars,” he says. “They know full well what the risks are, and they’ve concluded that this is an extremely promising place.”
That certainly is the view of DNO’s Normann, as we make our way up to Tawke on a frigid January morning. The tall, blond Norwegian leads me across barren hills, a cutting wind in our faces, to have a look at DNO’s first oil well in Kurdistan. He doesn’t want to talk about Galbraith — the ongoing case has made matters delicate — except to say that Galbraith had been a critical go-between. “We have a lot of friends out there, one of which I think you know,” he says with a grin. “These people came up with recommendations and made us aware that there was an opportunity here.” Now, however, after delivering 3.7 million barrels of crude oil into the Kirkuk pipeline, DNO is in a bind: The Kurds have ordered DNO to stop exporting, and the central government still owes the company millions of dollars. Only a couple of wells out of 15 were still pumping, producing diesel for local consumption.
Yet Normann remains hopeful. “We firmly believe that there is going to be a solution before not too long and that wisdom will prevail,” he tells me as we stand on a hill surveying a North Dakota — like vista of big skies and treeless terrain. “We were the pioneers. We were the first in — and now everybody is looking to us to see [if it will succeed].” Peter Galbraith had been instrumental in bringing the Norwegians here, he acknowledges, and DNO had tied itself to Galbraith’s vision of a future in which Kurdistan would control its own destiny — and potential riches. How the dispute resolves itself will decide not only the fate of DNO’s big gamble but Galbraith’s legacy as well.
Joshua Hammer wrote “Bloody Shame,” about the Zimbabwean diamond trade, for the December 2009/January 2010 issue of Fast Company.
The original version of this article had some imprecise language about former U.S. ambassador Zalmay Khalilzad. He held the title of counselor to secretary of defense Donald Rumsfeld in early 2001; he then served at the National Security Council; in December of 2002 he became Ambassador at Large for Free Iraqis, a title he held through the March 2003 invasion of Iraq.