will oil firms who deal with kurds be blacklisted by iraqis?

Iraqi oil minister threatens to blacklist firms which signed oil deals with Kurds

(AFP) 15 November 2007 RIYADH – Iraq warned on Thursday that foreign oil companies which signed deals with the autonomous Kurdish regional government will be barred from doing business in the country and from exporting oil.

“Any company that has signed contracts without the approval of the federal authority of Iraq will not have any chance of working with the government of Iraq,” Oil Minister Hussein Shahristani said.

“We warned the companies that there will be consequences… that Iraq will not allow its oil to be exported,” Shahristani told reporters on the sidelines of OPEC meetings in the Saudi capital Riyadh.Last week, the Kurdish authorities signed seven production-sharing contracts with a number of foreign oil companies in defiance of the Iraqi central government and before approving a controversial federal oil law.The latest contracts bring to 15 the number of deals finalised by the Kurdish regional government since it passed its own oil law in August.The regional administration said 85 percent of the returns from the foreign deals would be for Iraq and the rest would go to the contractor.The Kurdish government’s minister for natural resources, Ashti Hawrami, said last week that with the signing of the latest contracts, 20 international oil companies are now working in the region.

He said talks were ongoing with foreign firms over 24 new oil blocks in the oil-rich north and that announcements would be made soon.

Response:KRG.org, 15:58:04 20 Nov. 2007

KRG responds to Dr Shahristani’s threats to international oil companies

Statement by the Kurdistan Regional Government
Erbil, Kurdistan Region, Iraq

20 November 2007

Dr Hussein Shahristani, the Iraqi Oil Minister, has issued threats against oil companies who have signed contracts with the Kurdistan Regional Government. He warns that Iraq’s oil will not be allowed to be exported.

Dr Shahristani has failed to deliver any meaningful projects through his Ministry year after year. He has not managed to spend even a quarter of the annual federal budget allocated to his Ministry, and is now trying also to deter others from doing the right thing for the country. It is amazing that a Minister in Baghdad should continue to threaten international oil companies (IOCs) with sanctions and punishment because they have decided to invest in one of the secure and safe parts of Iraq.

We thought that the era of threats against the Kurds in Iraq was over. We thought that the era of punishing the Kurdistan Region was not part of our new and agreed political order. It is disappointing to see that Dr Shahristani has chosen to side with the anti-Kurdish elements from the Saddam era, and to see that he holds such grudges against the Kurdish people as if they belonged to another country.

We are not deterred by Dr Shahristani’s views. Experience shows that most international oil companies (IOCs) now ignore his unhelpful interventions. We know that the KRG is doing the right thing by encouraging the IOCs to invest in Kurdistan. The oil exploration contracts signed by the KRG will create an additional one million barrels of oil per day to enhance the much needed revenues to all the peoples of Iraq in the near future.

Dr Shahristani’s Ministry spent three years talking about the Khor Mor gas project for power generation without taking any real action. Earlier this year, the KRG made its decision to plan and implement the project through a service contract and by early 2008 we will be able to supply the power grid with much needed electricity to be shared throughout the country. If we had access to some of Dr Shahristani’s annual budget we would have done much more for the country by now.

Since we are an integrated part of Iraq with constitutional rights and duties, we know that oil exploration and production in one part of the country should create revenue for the whole country. When we are at the stage of exporting oil from the Kurdistan Region, we will be exporting Iraq’s oil for the benefit of all Iraqis. We have agreed in the approved Constitution of Iraq and the agreed draft Revenue Sharing Law that the country’s wealth and resources will be shared as demanded by the Constitution which was approved by an overwhelming majority of the country’s voters.

Our contracts with the IOCs are both constitutional and legal within the framework of the Kurdistan Oil and Gas Law, the only existing framework regulating our oil industry in the post-Saddam era.

People who are threatening to use the Saddam-era laws will not only go against the country’s principal agreement between crucial political forces, but they are directly endangering the country’s Constitution in which federalism and revenue-sharing are the only elements keeping the country together. During Saddam’s era nothing in the direction of federalism and revenue sharing ever existed.

Dr Shahristani keeps saying that Iraqi law does not allow this or that. People around the world wonder which law he is talking about because they know that since most of Saddam’s laws contradict the new Constitution, they are now null and void.

Since the fall of Saddam Hussein and his regime, representatives of the Kurdistan Region and its government have been both imaginative and forward-looking in solving many issues, ranging from constitutional to political mediation between different parties in Iraq.

We would like to remind Dr Shahristani that we neither expect nor accept threats, sanctions and punishments from partners in our coalition government in Baghdad. The Kurdistan Alliance List is a partner in Iraq, not a rogue region to be threatened or punished for exercising its constitutional rights and power and for its willingness to contribute to the country’s security, stability and revenue.

Once again our message to the IOCs and potential investors is that the KRG is mandated by the Constitution and has managed to create an investment-friendly business environment. Empty threats and talk of blackmail will not last. We are sure that eventually common sense will prevail in dealing with these matters.


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