Another item covered in Ben Lando's http://www.iraqoilreport.com that has been almost completely unnoticed in the MSM is that on August 6, the Kurdistan Regional Government (KRG) passed an oil law, in sharp contrast with the central Iraqi government, which has so far failed to do so. In the wake of its passage, the KRG is apparently making a deal with Hunt Oil Company of Dallas, which the Oil Minister of Iraq, Ali Shahristani, is threatening to declare illegal because it does not apparently contain a provision for sharing revenues with the central government, although the KRG has issued a statement saying that it is in principle willing to do so, especially if no oil deals are allowed in the Kirkuk region, containing the second biggest pool of oil in Iraq, and which the KRG is hoping a referendum will hand over to the KRG.
Actually, the KRG has since May 2006 cut deals with five oil companies, most of them wildcatter operations not from the US, with the first (and the first to start production) being DNO from Norway, with the others from Canada and Turkey. The early prospects have been favorable, with "gushers" reported coming in from parts of Iraqi Kurdistan in the fields operated by DNO, and the KRG apparently hoping to have 200,000 barrels per day (bpd) going by the end of this year and 2 million bpd in five years, out their own pipeline through Turkey (assuming that taking Kirkuk does not anger the Turks too much, who are worried about the Turkmen population there). Reportedly the DNO contract gives the company 10-30% of the revenues as profits, with the rest going to the KRG, and none to the central Iraqi government.
So, this may be the economic beginning of the "ground-up" partition of Iraq that seems to be going on more widely. The SIIC in the south is pushing for a separate entity there, which region has the largest oil pool. And the tribal Sunni sheiks in al-Anbar are getting armed by the US (which arming could have been done without the surge). Today they fight al-Qaeda in Iraq (which Juan Cole has long claimed would have happened sooner if US troops had completely withdrawn sometime ago, and their move to do so predated the surge), but tomorrow they will be able to fight an increasingly Shi'i-dominated central government, especially if the other regions take all the oil revenues for themselves. leaving nothing for the Sunni Arabs in the center, who remain alienated by the ongoing de-Baathification Commission, led by Chalabi.