The slap in Baghdad’s face recently promised by a Kurdish official arrived on 13 November with the revelation that the US’ ExxonMobil had signed oil deals with the Kurdistan Regional Government (KRG). It is hard to imagine that ExxonMobil would agree to this deal without the blessing of Washington.

ExxonMobil is now involved in a dispute between the KRG and Baghdad over ownership of oil and gas deposits lying under Kurdish and disputed territories. At the heart of the issue are differing interpretations of the constitution.  

Momentum in Iraq is now shifting in favour of greater federalism and further autonomous regions that would operate largely independent of Baghdad in a similar way to the KRG. Whether this will impact Iraq’s territorial characteristics will depend on the extent to which the Shia-led government appeases the discontent among Sunni Arab constituencies.

But it is not just Sunni Arabs who are calling for greater autonomy. The call to federalism has moved beyond simple sectarianism and even Shia-majority regions are protesting for increased rights and recognition.

If these calls are addressed, moves for other federalised regions should then cool down. But Prime Minister Nouri al-Maliki and his current government are not in a strong enough position either to negotiate with the provinces and address their concerns, or challenge any push for federalism through the complex constitutional and regulatory process that precedes any final creation of an autonomous region.

Without a parliamentary majority, Al-Maliki has had to rely on disunity among the growing number of unhappy provinces. The timing of ExxonMobil’s move has added to the tension, arising just a month before the 31 December deadline for US troops to evacuate Iraq. On 1 January 2012, Al-Maliki may face further challenges to his centralist project in Iraq. Dealing with the KRG over the ExxonMobil deals may be the only way for him to ensure his survival for a while longer.