The next oil boom

  @FortuneMagazine May 31, 2013: 11:14 AM ET
OIL20 kurdistan oil

A Kurdish government soldier patrols near an oil refinery outside the city of Kirkuk, which is in a heavily disputed area.


If you head up the northern highway that cuts through Iraq's semiautonomous region of Kurdistan, a turnoff to the east leads you into the picturesque mountain village of Al-Kush. There, on a chilly afternoon in March, a monster traffic jam formed outside the local gas station, which had just received its first fuel delivery in days. As the wait to fill their tanks dragged on, the drivers grew edgy, so police erected a checkpoint, fearing violence. "Where are you going?" an officer snapped in Arabic, a language unknown to my Kurdish translator and driver. "Aren't we in Kurdistan?" I asked. "No, this is Iraq. Take a look," he said, cocking his head at Iraq's black, white, and red flag flapping in a stiff wind behind him.

So it goes in Kurdistan: In one of the world's hottest oil booms, even the territory in which the exploration blocks sit, such as this Exxon Mobil site, is a matter of intense dispute. (And gasoline lines are possible on top of oilfields.) Ten years have passed since President George W. Bush's "shock and awe" bombs pummeled Baghdad and toppled Saddam Hussein. The long Iraq War is finally over, and the last American soldiers are gone. But a new battle is unfolding on the ground: the struggle for control over oil resources. American power this time is not military but corporate, with Fortune 500 companies like Exxon (No. 2) and Chevron (No. 3) acting as boots on the ground. Yet like the war, the contest could drastically reshape Iraq, and potentially blow it apart, by disturbing a precarious equilibrium that has lasted for more than 80 years and perhaps sparking a civil war.

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