Sep 12 2012

Iraq may expel U.S. oil majors cooperating with Kurds

By Zeena Sami

Azzaman, September 12, 2012

Iraq is considering the expulsion of U.S. oil firms refusing to suspend their activities in its Kurdish region, Deputy Prime Minister for Energy Affairs Hussein al-Shahristani has been reported as saying.

Local newspapers said Shahristani, who leads the current rise of the country as a major oil exporter and producer in the world, is unhappy with the persistence of U.S. oil majors not to annul their contracts with the Kurdish region.

He was reported as saying that the Americans were to choose between keeping their lucrative contracts with the central government in Baghdad or their deals to develop much smaller oil fields in the Kurdish north.

Shahristani is emerging as a national figure in Iraq due to his insistence that the development of the country’s national resources, namely oil, must be the sole responsibility of the federal government in Baghdad.

He has been the most vociferous Iraqi official to denounce the Kurds for striking oil deals with foreign firms without Baghdad consent.

Shahristani would also like all the proceeds from oil sales in Iraq, including those collected from the export of oil originating in the Kurdish region, be funneled to the Iraqi exchequer.

The Kurds have suspended shipping oil produced in their region via Iraqi pipelines for exports, denying the country of nearly 175,000 barrels a day, totaling more half a billion dollars a month.

Iraq’s oil exports are currently the highest in 30 years and running at an average of 2.56 million barrels a day.

The Kurds rely on the central government to finance their budget. They get 17% of the total oil revenues Iraq earns.

But Baghdad has threatened to trim billions of dollars from their budget due to their failure to heed its terms on oil development and exports.

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