Sunday, October 07, 2007

Iraq's Kurdistan defends oil deals, says more soon

BAGHDAD, Oct 7 (Reuters) - The government in Iraqi Kurdistan has reiterated its defence of oil and gas deals it has signed with foreign firms this year, with the semi-autonomous region's prime minister saying two more would be signed soon.

Kurdistan Prime Minister Nechirvan Barzani accused Iraq's central government, which has said deals signed by Kurdistan after February 2007 are illegal, of being locked in a Saddam Hussein-era "time warp".

Oil Ministry officials in Baghdad were using Iraq's oil resources, the third-largest in the world, "to create obeisance and loyalty to the center", Barzani wrote in an opinion piece in The Wall Street Journal at the weekend.

Iraq's cabinet agreed on a draft oil law, under which control and revenue from Iraq's oil reserves are to be shared among Baghdad and Iraq's provinces, but the law has since been stalled amid political infighting.

Frustrated by the delays, the Kurdistan Regional Government (KRG) approved its own oil law in August and said last month it had signed a production sharing contract with a unit of U.S.-based Hunt Oil Co and with Impulse Energy Corp.

"So far, we have signed eight production-sharing contracts with international oil and gas companies," Barzani wrote.

"We expect to sign another two in the near future."

Barzani said the contracts were consistent with Iraq's constitution, which allows provinces substantial control of natural resources, and with the revenue-sharing provisions of the draft oil law.

He said the KRG had waited five months for Iraq's parliament to pass the draft law but there was no sign they would act "any time soon".

"We decided to 'lead from the front'," he said.

Iraqi Oil Minister Hussain al-Shahristani said in an interview with Reuters last month the KRG's deals were illegal and expressed concern about their "secrecy".

He said crude from the deals could not be legally exported because the draft law states that only Iraq's State Oil Marketing Organisation held the right to export.

Barzani said the KRG deals were not an attempt to "usurp" Iraq's oil resources and noted Washington's frustration at the slow progress of the oil law, a key legislative benchmark aimed at reconciling Iraq's warring communities.

"The resources that can ease the suffering of the people of Iraq lie beneath our feet," he said.

"We are not a 'rogue province' seeking an early escape from the chaos that has become Iraq," Barzani said.

Reuters

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