Iraq still not recognizing deals between KRG, IOCs

March 11, 2008
Iraq has repeated its refusal to recognize any agreements for oil or gas signed between the country's Kurdish Regional Government and international oil companies.

Eric Watkins
Senior Correspondent

LOS ANGELES, Mar. 11 -- Iraq has repeated its refusal to recognize any agreements for oil or gas signed between the country's Kurdish Regional Government and international oil companies.

Iraq's oil minister Hussain al-Shahristani said, "The central government is in charge of the administration of natural resources, and agreements not approved by the central government will not be recognized."

KRG, against the wishes of the central government, already approved several contracts with international oil companies, including Crescent Petroleum, Sharjah; Reliance Industries Ltd., Mumbai; OMV AG of Austria; and a consortium led by state-run Korea National Oil Corp.

The Iraqi oil ministry considers such agreements illegal and has threatened to exclude and blacklist participating IOCs from future opportunities in the country.

As of Dec. 31, 2007, the Iraqi oil ministry suspended SK Energy's term contract to import Basra oil because it refused to abandon its exploration project in the Kurdish region as part of the KNOC consortium.

Last month, KRG Prime Minister Nechirvan Barzani planned to lead a delegation to Baghdad for talks with Iraqi Prime Minister Nuri al-Maliki on the status of the Oil and Gas Law, as well as recent and pending contracts KRG signed with international oil companies (OGJ Online, Feb. 8, 2008).

Contact Eric Watkins at [email protected].