The KRG is rejecting the oil compact on the basis that it is unconstitutional. That might be a negotiating bluff but it might be absolutely sincere - the KRG minister was certainly eloquent in his rebuttal and quite detailed in his analysis of the various fields.
If the Baghdad government attempts to go forward with the proposed centralized monstrosity outlined in the Dubai Annexes then we can rest assured that the average Iraqi will gain the same benefit from new fields that they enjoyed under Saddam from the old ones - or that the average Iranian or Saudi peasant enjoys.
Buddy made an excellent point concerning democracy's chance for success in Iraq being improved considerably by the average Iraqi having an actual stake as a citizen of Iraq rather than as a serf controlled by some petty desert despot. It could make a very significant and favorable difference in the probable outcome.
Using Kurd oil money to pay extortion to Sunni Arab sheiks shouldn't be acceptable to anyone and using a state owned monopoly which hasn't a hope of transparency to do so may be enough to move the Kurds from autonomy to a declaration of independence. Who could blame them? They've never had a real stake in the fiction of Iraq since the Brits drew the boundary lines on a map.
Current Iraqi production is around 2.3 million bbls per day which (at $50 bbl) translates to a per capita income of $1,500 (total per capita income today is around $2,900). If the KRG minister is correct in his computation that total output could rise to 8 miilion bbls per day then per capita oil income would move to around $5,600 per year.
One might wonder if most of the violence in Iraq isn't driven by speculative investment concerning control of that oil income stream.
Which side will Washington support? If democracy is really an objective, the Kurds should be in good shape.