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Iraq's Kurdish oil impasse rumbles on
2008-12-10
By Ahmed Rasheed
BAGHDAD, Dec 5 (Reuters)
Iraq\'s oil minister on Friday again denounced oil contracts signed by Kurdish authorities with foreign firms as illegal, signalling that a bitter feud over oil in the semi autonomous northern region is far from over.
\"We are in serious discussions with the (Kurdish Regional Government) about several issues, but the position on the contracts that were signed without the approval of the central government remains unchanged,\" Oil Minister Hussain al-Shahristani said during an energy conference in Baghdad.
\"Those contracts (have no) standing with Iraqi law.\"
His comments are the latest sign that the U.S-backed government of Prime Minister Nuri al-Maliki and officials in Arbil, the Kurdish capital, are loathe to back down as they vie for control of considerable oil resources in Iraqi Kurdistan.
The Kurdish region, which has enjoyed defacto autonomy since 1991, has signed several oil contracts, but cannot export any oil without permission from Baghdad to use pipelines that run to neighbouring Turkey.
Resolution appeared close at hand last month when the Oil Ministry announced an initial agreement that would allow 100,000 barrels per day of exports from Kurdistan\'s Tawke oilfield, where Norwegian oil firm DNO holds a concession.
A second oilfield, Taq Taq, would bring Kurdish oil exports through Turkey to 250,000 barrels per day by the end of next year, Kurdish officials have said.
Yet since then officials have sparred over whether Kurdistan will need to alter existing contracts.
Shahristani said that when Kurdish contracts were amended to the extent that they became acceptable \"and recognized by the government of Iraq, then the oil could be exported.\"
Kurdish-Arab feuding has also held up passage of a national oil law that is seen as a centrepiece of rebuilding Iraq\'s economy and attracting major foreign investment.
Iraq has the world\'s third largest oil reserves, but production has been hobbled by years of sanctions and under-investment, in addition to widespread destruction and bloodshed since the U.S.-led invasion in 2003.
Iraq is now in the process of seeking major contracts for oil and gas fields in several bidding rounds.
As global oil prices plummet, Iraq\'s plans for spending billions on reconstruction and economic development in the coming years are thrust into doubt.
Shahristani said Iraq is seeking to boost oil exports from an average of 1.7 million barrels per day in October.
\"The Ministry of Oil is doing its utmost to increase production as fast as we can and that\'s why we have gone to the first bid round and we will be going to the second in a very short time,\" he said. (Writing by Missy Ryan; Editing by Michael Christie)
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