DERIK, Syria In the northeast corner of Syria a power struggle is developing over the promise of oil riches in the remote Kurdish region, threatening to drag Kurdish rivals, Arab rebels and Turkey into a messy new front in an already complex civil war.
Quietly and with little of the bloodshed seen elsewhere in Syria's 19-month popular revolt against President Bashar al-Assad, the Kurdish minority is grabbing the chance to secure self-rule and the rights denied them for decades.
With Syrian forces and Arab rebels entangled in fighting to their west, a Syrian Kurdish party tied to Turkish Kurd separatists has exploited a vacuum to start Kurdish schools, cultural centres, police stations and armed militias.
But the growing influence of the Democratic Union Party (PYD) is concerning not only Turkey, which is worried that border areas will become a foothold for Turkish Kurd PKK rebels, but also Syrian Arab fighters who see the Kurdish militias as a threat.
At the PYD's office in the Syrian Kurdish town of Derik, where walls bear a portrait of Kurdistan Workers Party (PKK) leader Abdullah Ocalan and pictures of members the party says were killed by the Assad regime, the mood is defiant.
"We have our rights, we have our land. We are not refugees here and we will protect ourselves," said PYD activist Mohammed Said. "We cannot accept any force from outside coming here."
Along Syria's border with Iraq, Kurdish militants in jeans and armed with Kalashnikov rifles now guard a frontier post where Assad's army once patrolled the sparse hillsides dotted with now lifeless oil pumps.
In a classroom in nearby Derik, teenage girls practice reading their own Kurdish language, banned in schools until a few months ago, and Syrian Kurdish leaders express ideological loyalty to Ocalan who is jailed in Turkey.
Under Assad's rule and his father's before him, Syrian Kurds were forbidden to learn their language or even to hold Syrian identity and often forced from their land, while their activists were targeted by Syrian intelligence agents.
But after Assad's forces pulled out from the Kurdish region to fight elsewhere six months ago the PYD and its allied People's Defence Units or YPG militia began to claim control of towns up against the Turkish border - Derik, Efrin, Kobane and Amuda.
In Derik, a town of 70,000 sitting amid parched fields, daily life appears normal apart from long lines of people waiting for cooking gas.
Kurdish militia forces man improvised checkpoints made of boulders and tyres. Committees run a Kurdish court and services such as fuel deliveries. At the city's one open school, Syria's Kurmanji Kurdish dialect is openly taught.
"We could never say we were Kurdish before," said Palashin Omar, 18, in the classroom running through grammar drills. "We were never respected before now."
But there is also a clear co-existence with the Syrian state.
The Syrian army maintains its own checkpoint unmolested. The PYD party office is 100 metres from the Syrian intelligence agency office and Assad's Baath party headquarters where portraits of Assad are still on the wall.
PYD activists say they allow a limited government presence for now so they can receive gasoline from Damascus, and that government forces just stay where they are, unable to act.
But suspicions have sharpened dangerous splits with other Syrian Kurdish parties who believe Assad allowed the PYD to consolidate its power and flout an agreement brokered with the smaller Kurdish National Council, or KNC alliance.
"We can say the Kurdish region is liberated once the Syrian army cannot reach it," KNC leader Abdul Hakim Bashar told Reuters. "Right now there is not a single place they couldn't reach if they wanted."
The fate of the Kurdish region will be key in any post-Assad Syria. Most Syrian Kurds - the country's largest ethnic minority - are wary of a Syrian Arab opposition dominated by Islamists who are hostile to Kurdish self-rule.
Even Syrian Kurdish rivals are split over what type of government they want if Assad falls, whether to follow Iraqi Kurdistan's model of autonomy or simply more self-administration in their areas under a new Syrian government.
Whoever seizes the Kurdish plains nudging against Turkey will control a chunk of Syria's estimated 2.5 billion barrels of crude oil reserves, including fields run by British-based Gulfsands Petroleum (GPX.L) until international sanctions on Assad stopped its operations there.
Any eventual Kurdish self-rule in Syria will also have repercussions for Kurdish minorities in neighbouring Turkey and Iran, and strengthen autonomous Iraqi Kurdistan in its dispute with Baghdad's central government over their region's oil.
But the PYD's powerful position poses a dilemma for Iraqi Kurdistan's president Masoud Barzani next door: How to balance support for pan-Kurdish aspirations with Iraqi Kurdistan's growing political and business alliance with Turkey?
Barzani, seen by many Kurds as their natural leader, has worked to unite Syrian Kurdish parties. He helped create the KNC alliance and trained Kurdish refugees to go back to protect Kurdish areas in a challenge to PYD and PKK influence.
For Ankara though, the presence of Kurdish militants on its border shows Assad has allowed the PYD to take over as a way to strengthen the PKK and help it step up its attacks in Turkey and hit back at Turkish support for the rebels fighting Damascus.
Assad's late father sheltered Ocalan until Turkish tanks massed on the Syrian border in 1998 forcing him to expel the PKK leader who was later captured by Turkish agents in Kenya.
Turkish prime minister Tayyip Erdogan has said his country will take action if the PKK launches attacks from Syrian territory, and has conducted military exercises along the border in a clear warning to Damascus. But for now, he has few options.
"Turkey has time to watch how this develops," said Hugh Pope at International Crisis Group. "The PKK are on the offensive in Turkey and Turkey does not need another front."
The PYD dismisses claims it has anything but a political affiliation to PKK militants. But Ocalan's influence is clear.
Syrian Kurds chant at protests, "long live Apo", the PKK leader's nickname, and Kurdish border guards greet visitors wearing Ocalan badges on their jackets. His face stares out from a flag above the sandbagged frontier post near Iraq.
"We don't want to establish our own country, we just want a democratic Syria and the right to administer our areas," said militia commander Ahmed Barhodan, sitting in a home in Derik.
A NEW KIRKUK?
More worrying for the Syrian Kurdish region now though are the recent clashes with Arab fighters battling against Assad.
Dozens of Kurdish militiamen were killed in battles with Free Syrian Army fighters this month over control of Aleppo's Kurdish districts. Rebels see the PYD working with Assad.
"It's a sign of what will happen in the future," said PYD activist Mohammed Said.
Already Free Syrian Army rebels are claiming control of oil assets elsewhere. The Jaafar bin Tayyar Division, a Syrian Arab rebel unit in Deir al-Zor, said its fighters had taken control of the al-Ward oil field near the Iraqi border on Sunday.
But so far there is little evidence of PYD controlling any oil production infrastructure. Many oil production pumps scattered across the hillsides around Derik stand idle and lines of cars waited in the town for gasoline deliveries to arrive from the Assad government.
Before the crisis erupted Syria was an oil exporter to Europe. But its strategic position as a transit route from neighbouring Iraq, Iran and Turkey outweighs its modest production of 400,000 barrels per day before the turmoil.
Gulfsands operated a production-sharing contract with China's Sinochem (600500.SS) on Block 26 spread throughout the middle of the Kurd region, with oil output running at 24,000 bpd before sanctions hit.
But Syrian Kurds only have to look across their border into neighbouring Iraqi Kurdistan for an insight into how oil mixes with sectarian and ethnic conflict in the region.
Ten years after the invasion to oust Saddam Hussein, petroleum is still the centre of a simmering dispute between Baghdad's central government and Iraqi Kurdistan.
At the heart of the feud is the city of Kirkuk, which sits atop some of the world's largest oil reserves and is claimed by both the Kurds and the Arab-led central government.
"This area will be just like Kirkuk," said one Syrian activist in Derik pointing to the oil derricks just outside the city. "Everyone will come to fight for this."
(Additional reporting by Isabel Coles in Arbil; Editing by Jon Hemming and Greg Mahlich)
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