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LONDON, June 17 (Reuters) - Iraq's Kurds have established control over the northern city of Kirkuk and its oil reserves and effectively achieved their "dream of a greater Kurdistan", the chairman of Iraq's oil and gas committee said on Tuesday.
Adnan al-Janabi, a senior Sunni politician, said the Iraqi army did not have the capability to take the areas back. Moreover, Sunni Arab rebels that have taken Mosul and pushed towards Baghdad appeared to be focused elsewhere.
Baghdad's military retreat from the north under the Islamic State of Iraq and the Levant (ISIL) led assault last week allowed Peshmerga forces of the Kurdistan Regional Government (KRG) to seize control of long-disputed Kirkuk and its oil reserves - potential economic lynchpin of a Kurdish entity.
"The dream of a greater Kurdistan has already been achieved on the ground.... Kurdistan of Iraq is already on its national desired border and I don't think it will be easy to push back," Janabi told a conference in London.
"It includes parts of Kirkuk, Diala, Salahuddin... They are already there, already running the place and I don't think anyone will challenge them."
If the autonomous region holds onto Kirkuk, revenues from its major oil fields could far surpass a budget offer from Baghdad, boosting any ambitions of sovereign statehood.
But the 600,000 bpd Kirkuk pipeline, which accounted for the bulk of Iraq's northern crude oil exports, has been offline since March following insurgent attacks.
Attempts to repair it have been thwarted by Islamic militants in the region, who have targeted repair men trying to fix sections of the line that passes through territory outside KRG control.
Although oil production in the KRG area would likely continue uninterrupted despite the latest violence, Kirkuk was likely to be out for some time because of the security situation, Janabi said.
"It is out of action and will be out of action for longer than we had thought," he said.
"The damaged areas could be repaired in a couple of weeks but given the circumstances, Kirkuk should be considered out for the time being. Some fields in Salahuddin should also be considered out." (Reporting by Lin Noueihed; editing by Ralph Boulton)