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Iraq makes good on Kurd oil blacklist
22.1.2008
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January
22, 2008
BAGHDAD, -- Iraq's Oil Ministry has
reportedly cut current and will block future deals
as part of a blacklist of firms that have signed oil
contracts with Kurdistan region.
Companies will not be able to purchase Iraqi oil or
bid on upcoming projects in Iraq's oil and gas
sector if they have signed any deals with the
Kurdistan Regional Government since February 2007.
That's when a deal was reached -- and a few months
later rejected -- by the KRG and Baghdad on the oil
law.
The KRG has signed dozens of production-sharing
contracts since it passed its own regional oil law
in August, blaming Baghdad for taking too long and
violating the deal.
Oil Minister Hussain al-Shahristani has called the
Kurd contracts illegal and the KRG moves
unconstitutional. While inter-Iraqi politics has not
dealt with the KRG-Baghdad dispute -- whose power
struggle has derailed a draft oil law -- the
ministry is.
Shahristani has sent letters to companies that have
signed contracts to explore and develop the Kurd
region's prospective oil sector, cancelling deals
the companies have with Baghdad. Weekly Petroleum
Argus reports letters have been sent to SK Energy in
South Korea, OMV in Austria and Reliance Industries
in India, among others.
Later this year the ministry will start bidding
rounds for service contracts on producing oil
fields, and companies that want in must register by
Jan. 31.www.ekurd.net
The ministry is also
conducting direct negotiations with select super
major oil companies for contracts on Iraq's largest
fields.
The ministry will prequalify companies that will be
able to bid.
SK Energy, a South Korean refiner that is part of a
consortium in a KRG deal, has had its Iraqi crude
shipments cut.
International Oil Daily reports the country's
largest refiner is trying to balance its desires for
Iraq oil and the KRG deal, with Seoul attempting to
broke a political deal. SK, which imported 90,000
barrels per day from January through November 2007,
will likely just increase imports from Iraq's
neighbors.
South Korea in total imported about 125,000 bpd
during that timeframe, a major increase since 2006.
Shahristani has also reportedly cut all memorandums
of understanding with oil firms that have signed
with the KRG. The annual memorandums allow an
exchange of information, technology and training
between the ministry and companies.
Iraq draft oil law becoming irrelevant
Iraq's Kurds want to focus on reviving the country's
oil law, but high-profile talks during a U.S. visit
haven't forced progress as they hoped.
Contention between Baghdad and the Kurdish region
over the draft oil law has led to a split between
Iraq's leaders. Now both sides are condemning each
other as they move forward on oil developments
unilaterally,www.ekurd.net
pushing aside any
relevance to the oil law.
U.S. Vice President Dick Cheney met with KRG Oil
Minister Ashti Hawrami and Deputy Prime Minister
Omer Fattah Hussain during their Washington visit in
November. The United States has designated
Undersecretary of State Reuben Jeffrey a top
political envoy to focus on the oil law.
But the oil law appears as stuck as before as a
power struggle continues over Iraq's political
process and the oil sector.
Weekly Petroleum Argus reports the Kurds are asking
Prime Minister Nouri al-Maliki to delegate his
energy adviser, Thamir Ghadhban, instead of Oil
Minister Hussain al-Shahristani in new oil law talks
in Parliament's Energy Committee.
The KRG wants decentralized oil governance, allowing
more rights for producing regions and provinces to
develop their respective oil sectors. Others in Iraq
believe the central government should keep control
over the oil sector strategy. Leaders of political
parties representing near 150 parliamentarians
signed a pact recently declaring opposition to the
KRG oil policy.
The KRG has signed dozens of production-sharing
contracts with international oil firms and passed a
regional oil law, which has not settled well
elsewhere in Iraq.
Meanwhile, Shahristani is starting a process to sign
deals for developing Iraq's oil sector. The Oil
Ministry has given interested companies until Jan.
31 to submit prequalifying applications. The
ministry said companies that have signed deals with
the Kurds will not be chosen.
UPI
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