Rice Appeals to Oil-Rich Kurdish North

U.S. Secretary of State Condoleezza Rice and Iraq's Kurdish region president Massoud Barzani talk to media in Irbil Friday Oct. 6, 2006. Rice visited the autonomous and oil-rich Kurdish north of Iraq on Friday, less than two weeks after the regional government threatened to break away from Iraq in a dispute over oil. (AP Photo) (Str - AP)

In Iraq, fears of Kurdish secession have risen in recent weeks, especially when Barzani briefly banned the display of the Iraqi flag in government buildings.

The oil dispute reflects the larger fight over federal control in Iraq.

Although the parliament briefly averted a crisis over the Kurdish threat last month, leaders have been unable to pass a federal law on the distribution of oil wealth

The U.S. and other international backers want quick action on a law that would streamline the complicated oil sector, attract foreign investment and provide for equitable distribution of oil profits across Iraq.

Oil is still pumping at prewar levels more than three years after the invasion that toppled the former president of Iraq, Saddam Hussein.

Oil resources are now governed by vague terms in the national constitution written last year.

Energy analysts estimate oil revenues make up more than 95 percent of Iraq's domestic budget.

Since the Gulf War of 1991 the Kurdish north had been out of Saddam's control and the Kurds established their autonomous region under U.S. and British protection. After the U.S.-led invasion and occupation of Iraq, Kurdistan was the only region that did not witness major changes.

Iraq's new constitution recognizes Kurdish self-rule and provides a legal mechanism for other areas to govern themselves but within the Iraqi state.

Sunni Arabs, who had enjoyed control over Iraq under Saddam, now fear the Kurdish push for secession under the nation's new federal system. Should the Shiite majority in the oil-rich south follow suit, the Sunnis would find themselves with little more than date groves and sand.