US official warns of Kurdistan deal risks

Hunt Oil Co. has come under pressure from the US government for its recent signing of an exploration and production agreement with the Kurdistan Regional Government (KRG) in northern Iraq.

Oct 2nd, 2007

Eric Watkins
Senior Correspondent

LOS ANGELES, Oct. 2 -- Hunt Oil Co. has come under pressure from the US government for its recent signing of an exploration and production agreement with the Kurdistan Regional Government (KRG) in northern Iraq.

In Baghdad, a US Embassy spokesman warned that Hunt and a handful of small "wildcat" companies that have signed similar deals could find themselves in a legal battle between the Iraqi federal government and the northern, semi-independent Kurdistan region.

"We think that these contracts have needlessly elevated tensions between the KRG and the government of Iraq, who both share a common interest in the passage of national legislation," the official said.

He added that the US is "pushing all sides to negotiate in good faith and knock off the things that undermine national unity." Meanwhile, he said, "We advise companies that they could incur significant political and legal risk by signing contracts with any party before the national law is passed."

Analysts interpreted the spokesman's statements as signaling that the US government may be unwilling to support Hunt Oil should there be a future dispute about the legality of its contract with the KRG.

KRG, Hunt Oil Co. of the Kurdistan Region, and Impulse Energy Corp. on Sept. 8 announced the signing of a production sharing contract covering the Dihok area of the Kurdistan region (OGJ, Oct. 1, 2007, p. 36).

Contact Eric Watkins at hippalus@yahoo.com.

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