Baghdad to Block Oil Contracts Signed by Kurds

Middle East Online. Posted March 10, 2008.

ANKARA - Baghdad will block any contracts signed by foreign oil companies with Iraqi Kurdish regional authorities, Iraq's Oil Minister Hussein Chahristani said on Saturday.

"All contracts will be handled by the central government," he told a joint press conference in Ankara with his Turkish counterpart Hilmi Guler.

"No contracts signed by any regions in Iraq will be recognized by the government of Iraq. Companies will not be allowed to work on Iraqi territory unless their contract is approved by the central government in Baghdad."

The government in Baghdad and authorities in the autonomous Kurdish region of northern Iraq have been at loggerheads over the issue for months.

In November the minister announced he had canceled around 15 oil contracts signed by the authorities in Iraqi Kurdistan.

In response, Kurdish Prime Minister Nechirvan Barzan insisted the contracts would be honored, saying "nobody can cancel contracts signed by Kurdistan," as his government approved the signature of seven more oil contracts.

The autonomous Kurdish regional government in northern Iraq has signed 15 exploration and export contracts with 20 international companies since it passed its own oil law last August, infuriating the Baghdad government.

Chahristani has repeatedly said he considers the contracts "illegal."

He has threatened the companies concerned that they would not in future have the chance to work with the Iraqi government, threats which have so far have not been carried out.

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