Jun 24 2012

Iraq warns Western oil majors against signing contracts with Kurds

By Adel Kadhem

Azzaman, June 24, 2012

Iraq’s Deputy Prime Minister Husain al-Shahristani has warned foreign oil majors against signing oil development contracts with the semi-independent Kurdish enclave in northern Iraq.

Shahristani, who is in charge of Iraq’s energy sector, has repeatedly reminded foreign firms that Iraq will place any firm dealing with Kurds without central government’s approval on its embargo list.

The deputy minister has recently been summoning ambassadors of industrialized nations to clarify the country’s stand.

The most recent audience Shahristani had was with the French ambassador to Baghdad Jean-François Girault.

A statement by Shahristani’s office faxed to the newspaper said Shahristani made it clear to the French envoy that Iraq will “penalize” any French oil firm working in the Kurdish region.

Iraqi pressure seems to be working and Exxon Mobil is reported to have suspended operations in the Kurdish region as well as talks to develop newly discovered fields in areas close to the northern city of Mosul.

The government is particularly angry with Kurds for claiming oil fields in the so-called “disputed areas” as their own.

The plateau north east of Mosul, inhabited mainly by non-Kurdish ethnic minorities, is reported to be holding billions of oil barrels in reserves.

The Kurdish move to persuade Exxon Mobil to develop the area prompted Prime Minister Nouri al-Maleki to issue a stern warning to the Kurds, threatening grave consequences if they moved ahead with plans to develop the newly discovered fields.

Maleki is reported to have said that he would do everything possible to prevent Kurds from controlling the fields in Mosul even if it meant going to war.

While giant oil majors have so far shunned striking deals with Iraqi Kurds, Kurdish authorities have signed scores of deals with smaller firms.

The Kurds say they now have the capacity to produce 200,000 barrels of oil a day and have constructed small refineries to churn out by-products.

Shahristani, according to the statement, told the French envoy that France’s relations with Iraq particularly in energy sector will be at risk if French majors signed any contracts with Kurds.

“Shahristani warned French firms working in the oil sector in Iraq against striking deals that are not sanctioned by the central government in Baghdad in order for Iraq to establish developed relations with France, particularly in the area of energy and major strategic industries,” the statement said.

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