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The Kurdish region of the war-torn country has significant oil reserves and its pipeline with Turkey means the Yes campaign will face fierce opposition from Baghdad

IRAQs Kurdish region will hold a bombshell independence referendum in September, despite fierce opposition from Baghdad.

Iraqi Kurds largely support the idea of an independent state, but a yes vote in September would only be the start of a contentious project that would face major external and internal challenges.

Reuters

The date for the independence referendum shall be Monday, September 25, 2017, Kurdish leaders said in a statement.

The statement added: It will be on that day when the people of the Kurdistan region, as well as those living in the disputed areas, will cast their votes on whether they accept independence.

The decision was made at a meeting attended by Kurdish leader Massud Barzani and representatives of the regions political parties.

Iraqi Kurdistan is made up of three provinces that are run by an autonomous regional government and protected by their own security services, providing the basis for a potential state.

But there are major political and economic obstacles to Iraqi Kurdish independence.

The presidency statement said the referendum would include areas of Kurdistan outside the administration of the region, which were termed disputed areas.

This refers to swathes of northern territory that are claimed by both Kurdistan and Baghdad, including the key oil-rich province of Kirkuk.

Opposition in Baghdad to Iraqi Kurdistan becoming independent would become even greater if the region tried to take disputed territory along with it.

Iraqi Kurdistan, like the rest of the country, depends almost entirely on revenue from crude sales to provide government funds.

Kurdistan exports most of its oil via a pipeline leading to the Turkish port of Ceyhan, but also overland through Turkey by tanker truck.

A major external challenge to independence is potential opposition from Turkey.

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Turkey has a large Kurdish minority with which the government has been engaged in a multi-decade armed conflict, and Ankara would almost certainly fear that Iraqi Kurdish independence could fuel increased calls for a similar move within its territory.

Due to how Iraqi Kurdistan exports its oil, Turkey potentially has both an effective veto over independence in general, and a ready means to apply huge pressure to any fledgling state's economy if it did split from Iraq.

Given the poor state of relations between Ankara and Baghdad, Iraq is likely to oppose part of its territory being turned into a state under Turkey's influence.

Internally, Iraqi Kurdistan has been hit hard by low oil prices to the point that it has stopped paying some government employees for extended periods.

And while the concept of Kurdish independence has broad appeal, Iraqi Kurds are deeply divided politically, which could lead to paralysis in a new state.

The regional presidency's statement said that "the political parties... agreed to resolve some of the outstanding political and economic issues prior to the date of the referendum".

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Kurds in Iraq are to hold a referendum on independence on September 25 - The Sun