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No cooperation with Oil companies over
Kurdish deals: Iraq Official
18.1.2008
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January 18 2008
BAGHDAD, -- The Iraqi Oil Ministry has
decided to stop cooperating with international oil
companies participating in production-sharing
contracts with the Kurdish administration in
autonomous region of Kurdistan 'northern Iraq', an
official said Thursday.
The decision is considered a first step toward
implementing the ministry's threats to blacklist and
exclude these companies from any future deals with
Baghdad if they refuse to abandon their oil deals
with the self-ruling Kurdish government.
The following companies are thought to have
agreements with both Oil Ministry and with
Kurdistan: the United Arab Emirates' Crescent,
Canada's Western Oil Sands and Heritage Oil Corp. (HOC.T),
India's Reliance Industries Ltd. (500325.BY) and
Austria's OMV AG (OMVKY).
The Kurds are a key group within the national
governing coalition and have been Washington's most
reliable allies in Iraq.
Since the ouster of Saddam Hussein they have forged
a close relationship with the majority Shiites.
But assertive acts by the Kurds, such as the refusal
to fly the Iraqi national flag in the region, have
irritated the Shiite-dominated government in Baghdad
as well as Sunni Arabs. Many see such gestures and
the recent oil deals as a threat to
the country's national unity.
The Oil Ministry's decision came days after 145
Iraqi Arab lawmakers from rival sects joined forces
to criticize what they say is overreaching by the
Kurds, alleging the powerful U.S.-backed minority's
go-it-alone style threatens national unity.
They took issue with Kurdish ambitions in the
disputed northern Kurdish city of Kirkuk and in
negotiating deals with foreign oil companies without
involving the central government.
With the national oil and gas law stuck in dispute
between the Kurds and Arab leaders over who has the
final say in managing oil and gas fields,www.ekurd.net
the Kurds have signed 15
production-sharing contracts with 20 international
oil companies. The
Oil Ministry considers those contracts illegal.
As of Dec. 31, the Oil Ministry ended South Korea's
SK Energy's (096770.SE) term contract to import
Basra crude oil because it refused to abandon its
exploration project in Kurdistan as part of a
consortium led by the state-run Korea National Oil
Corp.
Another aspect of cooperation being halted is the
one-year memorandums of understanding the ministry
has signed with about 40 international oil companies
since 2004, including those companies believed to
have signed oil deals with the Kurdish regional
administration.
Under these memorandums, which are up for renewal
every year, companies offer the Oil Ministry free
technical support for specific oil and gas fields
and some provide training for ministry staff.
In return, the ministry provides data on the fields
for which it was seeking help, though these
memorandums aren't considered a commitment to
awarding these fields to the companies in the
future.
"They will be canceled as well," added the unnamed
official.
A spokeswoman for Reliance Industries said the
company hasn't received any official communication
from the Iraqi government. She said the company
hoped any possible issues will be resolved without
affecting business.
Last year, the Iraqi-owned, UAE-based Crescent
signed a series of deals with Kurdistan through
subsidiary Dana Gas (DANA.AD).
Canada's Heritage Oil signed a deal with Kurdistan
last October for the Miran Block in Sulaimaniyah
province. Western Oil Sands is working on three
structures in Kurdistan's Zagros Fold Belt,www.ekurd.net
under an agreement
signed in mid-2006 and ratified in
March.
Another production-sharing contract was signed last
November between Reliance and the Kurdish regional
government for the Rovi and Sarta Blocks through
Dubai-based subsidiary Reliance Exploration and
Production.
Also in November, Austria's OMV signed similar
contracts for the Mala Omar and Shorish Blocks in
the Erbil area.
DJ.Newswires
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