Courtesy of Oil & Glory, a look at Russia’s interest in Kurdistan:

After four unanswered triumphs by autonomy-minded Kurdistan, the ball is firmly in Baghdad’s court — it must craft a response to growing defiance by the world’s biggest oil companies, which have been signing exploration deals with the northern region. Baghdad claims the right to vet and approve all energy deals in Iraq, while Kurdistan argues that it is autonomous, and can make its own such decisions. The latest miscreant as far as Baghdad is concerned is Gazprom, whose oil affiliate Wednesday bought large percentages in two blocks of land that the Russian company estimates could contain 3.6 billion barrels of oil. The move follows on the heels of an announcement just the day before by France’s Total, which said it had bought a 35 percent stake in two Kurdistan fields. Last week, Chevron entered into a deal for a Kurdistan oilfield, and in October, ExxonMobil was the first Big Oil company to sign a contract in the region. As punishment, Baghdad excluded Exxon from a May auction, and wholly blacklisted Chevron from any future oil deals. But since the oil companies and Kurdistan itself have already said — loudly — that they don’t care about exclusion, “the next chess move needs to come from Baghdad,” a Western oilman based in the country told me. Baghdad’s choices, according to this oilman: Do nothing; punish all the companies in a way that hurt them materially; punish Kurdistan – or punish both. “I don’t know which way they’ll go, no idea at all,” the oilman said.

The issue is more than bragging rights or cash. We are talking nationhood and geopolitics — as this blog pointed out a couple of days ago, with their actions, the oil companies have effectively recognized Kurdistan as a stand-alone state. Ironically, Baghdad itself has set this course of events into motion with miserly oil-contract terms that make it ultra-profitable for the companies to pull up stakes and go north.

“The terms offered by Iraq are so thin, that the draw of Kurdistan seems irresistible,” Steven Kopits, an energy analyst at Douglas-Westwood, told me. “So Iraq, in choosing to maximize its own oil revenues, may also be choosing to let Kurdistan go.” Kopits said:

Could the matter end in open conflict sometime in the future?  Possibly. But given that Iraq can hardly manage its own restive minorities, and given that arbitrarily crafted countries like Iraq tend to fall apart into ethnic or religious groups when they become democracies, it would seem more likely that over time the de facto status will become the de jure status.  With oil revenues, acceptable governance, and the support of the oil industry, Kurdistan has the opportunity to survive as an independent entity.  In a Solomon’s choice of money or country, Baghdad has elected to take the money.

That may be the case, but Baghdad will still move to hold the country together.