At the eve of the World War I, Winston Churchill decided to shift the British Royal Navy’s, symbol of the British imperial power, dependency on secure Welsh coal to something new in distant and insecure territories. This new commodity was called oil and located in today’s Iran. Churchill was heavily criticised for his decision. Despite that he was determined to base the Empire’s “naval supremacy upon oil”. He declared that “Mastery itself was the prize of the venture,” to which he committed himself with full energy and enthusiasm.

Since then, oil has dominated world politics and business. The issue of oil once again dominated world politics when Saddam Hussein invaded and annexed Kuwait in August 1990. If Iraq was allowed to control Kuwait, Saddam Hussein would have become a dominant regional and potentially global figure. He would have been able to impose much of his view and political ambition on the rest of the world. Saddam Hussein was prepared to pay the prize for his mastery of the oil. Leaders of the United States and many other countries did not allow that mastery to be materialised.

But not all mastery of oil is of the same nature as Saddam Hussein’s. Many oil producing countries use the oil and its power (economically and strategically) to improve their societies and the world.

Oil is a fundamental contribution to the improvement and development of both capitalism and modernisation of the global business. Looking for oil has meant great risks and rewards at the same time. It can salvage or ruin countries and regions. Oil can enrich individuals, companies, and entire countries. Despite the electronic revolution and the wealth it generates, having oil is almost like having money. The crucial question is how it is managed, by whom and for what purpose.

Oil also provide a different element of power than money. It provides oil producing countries with a particular strategic strength and position on the global stage. Since the beginning of 1900 many wars and conflicts were about controlling oil reserves and securing access to oil production.

In many ways, oil has become a fundamental element in our modern society. Some argue that we should be talking about a “hydrocarbon society”. We might even call the modern individual a “hydrocarbon man”: we use oil and its products in everyday life without reflections anymore. Electricity extended the working hours. Heavy metal objects, like cars, tractors, airplanes, satellites, etc., are suddenly moving around by using oil. In fact oil makes it possible for us where and how to live, to travel and commute, to grow more agricultural products for feeding ever-growing global population, to build houses, and myriad of other products. Some people argue that if we stop producing oil our entire contemporary civilisation will collapse.

Emerging powers, like China and India, and emerging economies are demanding more and more oil. Kurdistan Region has also witnessed greater demands for oil and its products since 2003. Almost all construction and other economic activities depend on oil. The prosperity of the entire society seems to be based on the availability of oil and gas. In many ways, that is a fantastic news for the citizens of Kurdistan: to be able to develop a normal society in which wealth and prosperity can flourish after decades of war and destruction. Ordinary citizens would like to enjoy life the way many other people are doing in stable and safe societies. No wonder.

Since the discovery of oil in Iraq the country’s political system of Iraq was heading towards centralisation. When Arab nationalist forces took over power at the end of 1960s a stronger centralisation process drove the decision-making mechanisms in Iraq towards a more aggressive and destructive state as a result of which forced population transfer, ethnic cleansing and genocide were practiced to solve the country's political and social problems.

Already in 1930 Ismael Beg of Rewanduz expressed a worry that became a systematic trait of Iraq's policies when oil revenues became the main source of income without any proper checks and balances on the government. Ismael Beg said: “”The large revenue that Iraq gets from the oil-fields might be used to help us instead of being spent on waging wars in these mountains and making the Kurds bitter and hostile. Remember the oil fields are in Kurdistan, so we have some right to ask for benefits from the revenue they earn. Yet all we seem to derive from our oil are bullets and bombs.”

In a failed state like Iraq, the oil revenues were used to wage wars on different parts of the country's population. The people of Kurdistan were the first to experience that policy already from 1930s, as conveyed by Ismael Beg. However, this was only the beginning. The more the revenue to the state budget, the less transparent became the government spending and the more destruction came to the country.

In 1974 the legendary Kurdish leader, General Mustafa Barzani, told Gwynne Roberts, a British film-maker, that “oil was a curse and had blighted the future of the Kurds”. The reason for that was obvious. While nationalisation of oil was celebrated in Iraq and the Arab and Socialist world for being an important anti-colonial and anti-capitalist move, the Kurds were witnessing an intensified process of repression, ranging from dislocation of people from Kirkuk and the oil industry and services to forced transfer of families and individuals and mass killings and genocide.

In the entire history of modern Iraq, what made all these destructive policies possible was the absence of accountability and the clear lack of checks and balances on the tremendous wealth gradually generated by the oil production. Most probably, neither Ismael Beg nor General Mustafa Barzani could fully imagine the level of destruction the population of Kurdistan went through in the second half of the 19805 in which Saddam Hussein's infamous Anfal Campaign-led to the destruction of more than 4000 villages and the killing of more than 180,000 people.

Taking this tragic history into account, Kurdistan's political leaders were determined to prevent any recurrence of such a recent past when they actively supported the removal of Saddam Hussein’s regime in 2003 by the American-led coalition. In the American-supported opposition meeting in London in December 2002, the Kurds insisted on the idea of federalism on which the Iraqi state will be re-built. The first post-Saddam Hussein negotiated political agreement came in March 2004 in form of an interim constitution called the Transitional Administrative Law, TAL, which paved the way for federalism as the fundamental principle on which Iraq was to be re-built.

The second round of negotiation ended up in agreeing the draft of Iraq's permanent Constitution, which was endorsed by four out of five Iraqi voters in October 2005. For the entire population of the Kurdistan Region, this was seen as a dramatic historical turning point. The strong centralised decision-making process was broken at last.

Kurdistan Region achieved two important objectives: to be a self-ruling entity within Iraq and become a meaningful partner in a federal Iraq. Managing the oil resources and revenue sharing were essential in all negotiated agreements, allowing the Region to be a co-decision maker in relation to the producing fields, granting it exclusive
power when it comes to new explorations and sharing the revenue in accordance with the letter of the constitution.

This was, and will remain, the basis on which the Kurdistan Region wanted to re-join Iraq in 2003. Kurdistan’s people and leadership believe that this arrangement will put an end to the vicious circles of the past by decentralising power, encouraging internal competition to improve the country’s economy and establishing a constitutional committee to supervise the revenue sharing mechanism enshrined in the country’s 2005 Constitution. Abstaining from, delaying or undermining the implementation
of the Constitution is seen in Kurdistan as an attempt to go back to previous policies of decentralisation and subsequent destruction.

In order to pre-empt such a recurrence, the Kurdistan Regional Government, KRG, passed its Regional Oil and Gas Law in accordance with Iraq’s Constitution in early August 2007. The Law established a Regional Oil and Gas Council consisted of the Prime Minister, the Deputy Prime Minister, and the Ministers of Natural Resources, Finance and Planning. As Prime Minister Nechirvan Barzani said in his speech on 1 June 2009, the KRG was “determined to use our natural resources in a constructive manner for the benefit of all Iraqi citizens, and to create a better future for ourselves and our neighbours, as well as for future generations.” Prime Minister Barzani told Gwynne Roberts on the same day that what his grand-father told him in 1974 was “correct. Then oil from Kurdistan was used to buy weapons to destroy the region. But after 35 years, I think the situation has changed. Now Iraqi oil is used for reconstruction, welfare and the people's well-being. We are honouring [General] Barzani's soul with what we have done so far. We are providing a future of hope to our nation.”

Maybe what Prime Minister Barzani is saying is that this is much more than the beginning of a new era of political initiatives from the Kurdistan Region. Maybe the Kurds are not any more what Ehmedi Xani said in 1692, dispossessed, fugitives
and condemned when he asked

“I am confused by God’s wisdom:
In this world of States,
Why have the Kurds remained stateless, dispossessed?
What for have they all become fugitives, condemned?”

What the leadership of the Kurdistan Region is engaged in is a constructive political process in which it is taking bold decisions to implement the federal constitution in order to use the oil revenues to re-build Iraq, to bring prosperity to the Kurdistan Region and to show a good example by attracting billions of dollars to the Region. Or as the Prime Minister Nechirvan Barzani once said: “Success for us will be to be part of the next thing that happens in Iraq, in the Middle East and on the global stage. If anything, this is the beginning of our journey.”