BAGHDAD, Nov 24, 2007 (AFP) - Iraq's oil ministry has declared all crude
contracts signed by the Kurdish regional authorities with foreign companies null
and void, a government official said on Saturday.
"The ministry has nullified all contracts signed by the Kurdistan Regional
Government," the official told AFP, asking not to be named. "They will not be
recognised."
The Kurdistan Regional Government has signed 15 exploration and exportation
contracts with 20 international companies since it passed its own oil law in
August, infuriating the Baghdad government.
Oil Minister Hussein Shahristani has in recent weeks angrily denounced the
Kurdish authorities for signing the contracts before the national parliament
approves a new oil and gas law, declaring them "illegal".
The government official said the minister had now gone further and nullified all
the contracts and had warned the foreign companies involved that they would be
blacklisted.
"Minister Shahristani had warned companies who sign contracts without taking the
advice of the oil ministry that the ministry would ... blacklist them from any
future deals with Iraq," the government official said.
"The minister had told them the oil ministry in Baghdad is the only institution
authorised to sign oil contracts before the approval of the oil law."
Shahristani told Monte Carlo radio on Friday that countries neighbouring Iraq
would prevent the Kurdish authorities from exporting oil.
"There is an understanding between Tehran, Ankara, Damascus and Baghdad," he
said.
"The Iraqi government had warned these companies of the consequences of entering
into these contracts," the minister added. "And the consequence is that Iraq
will not allow these companies to extract the oil."
The Kurdish authorities reacted sharply on Saturday, saying Shahristani should
take the matter to the federal tribunal which deals with disputes between the
provinces and the central government.
"The Kurdistan Regional Government (KRG) signed contracts according to laws
passed by the Kurdistan provincial parliament which comply with the Iraqi
constitution," said a statement on the KRG website.
"The KRG considers that the minister is exceeding his authority in making these
statements," it added. "His statements will not affect our contracts with
foreign companies."
It said his comments were reminiscent of the Arab chauvinism of Saddam Hussein's
regime.
"We are sorry to hear such statements, which are close to Baathist ones," it
said, referring to the Baath party of the ousted dictator.
Regarding the minister's comments on preventing oil being exported, the
statement said: "Who said we are exporting oil? We said we signed oil contracts
to explore and produce oil -- we know that there must agreement with the federal
government on the issue of exporting oil."
The regional government says the contracts will benefit all Iraqis as 85 percent
of the returns from the deals would be for Iraq and the rest would go to the
contractor.
Iraq's oil and gas bill is stalled in the national parliament amid bitter
differences between rival factions.
When approved, the new law will open up Iraq's long state-dominated oil and gas
sector to foreign investment.
It will also stipulate that receipts be shared equally between Iraq's 18
provinces, a key concern for the Sunni Arab minority that Washington says has
fuelled the anti-American insurgency.
