Friday, April 27, 2007
Iraqi oil ministry says oil contracts not signed with central govt. will be considered illegal
Oil
(Reuters) - Iraq's oil ministry said on Thursday foreign firms should sign oil contracts only with the central government until a new oil law is passed, adding that deals outside its jurisdiction would be considered illegal.
An oil industry source told Reuters the warning, made in a ministry statement after Oil Minister Hussain al-Shahristani met the Russian envoy to Baghdad, referred to contracts signed recently without the approval of the central government.
"Foreign companies should only sign contracts through the central government and the oil ministry. The ministry warns companies who violate Iraqi law of the consequences of their actions and any contract that is signed outside the jurisdiction of the central Iraqi government is considered illegal." Iraq's Kurdistan regional government has signed several agreements with foreign companies, including a service contract last week with United Arab Emirate's Dana Gas.
While Kurds favour agreements that would share production with foreign firms, such deals have drawn criticism from some Shi'ite and Sunni Arab nationalists. Ashti Hawrami, the Kurdish region's minister of natural resources, said it could clinch deals with any company it chose. "If they do not want to agree on the remaining contentious points we will implement our own laws for the Kurdistan region according to the constitution," he told Reuters.
Iraq's central government and Kurdish officials are currently trying to resolve disputes over the draft oil law, which would determine control of the world's third-largest oil reserves. The law has yet to be approved by parliament. Hawrami has said annexes to the draft law that would wrest oilfields from regional governments and place them under a new state-oil company are unconstitutional.
Shares of Norway's DNO, an independent producer about to start drilling for oil at its Tawke field in the Kurdish-controlled north, fell as much as 4.5 percent after the oil ministry comments appeared to cast doubt on its production agreement with the Kurdish region. Shares later pared their losses. An oil industry source told Reuters in Baghdad that the Iraqi government had no problem with a "Norwegian firm" that had signed a deal with the Kurds, without specifying DNO by name. In Olso, DNO said it was confident about the validity of its oil production deal with Iraq's regional Kurdish authorities.
Iraq's Deputy Prime Minister Barham Salih, an architect of the draft oil law, told Reuters after the cabinet passed it in February that it would allow the Kurdish regional government to review existing contracts it has signed with foreign firms to ensure consistency with the terms of the new law. Salih said a commission of independent experts would ratify consistency in case of contention and that regional authorities would be able to negotiate oil contracts with foreign companies based on "maximising revenues for Iraqi people."
An oil industry source told Reuters the warning, made in a ministry statement after Oil Minister Hussain al-Shahristani met the Russian envoy to Baghdad, referred to contracts signed recently without the approval of the central government.
"Foreign companies should only sign contracts through the central government and the oil ministry. The ministry warns companies who violate Iraqi law of the consequences of their actions and any contract that is signed outside the jurisdiction of the central Iraqi government is considered illegal." Iraq's Kurdistan regional government has signed several agreements with foreign companies, including a service contract last week with United Arab Emirate's Dana Gas.
While Kurds favour agreements that would share production with foreign firms, such deals have drawn criticism from some Shi'ite and Sunni Arab nationalists. Ashti Hawrami, the Kurdish region's minister of natural resources, said it could clinch deals with any company it chose. "If they do not want to agree on the remaining contentious points we will implement our own laws for the Kurdistan region according to the constitution," he told Reuters.
Iraq's central government and Kurdish officials are currently trying to resolve disputes over the draft oil law, which would determine control of the world's third-largest oil reserves. The law has yet to be approved by parliament. Hawrami has said annexes to the draft law that would wrest oilfields from regional governments and place them under a new state-oil company are unconstitutional.
Shares of Norway's DNO, an independent producer about to start drilling for oil at its Tawke field in the Kurdish-controlled north, fell as much as 4.5 percent after the oil ministry comments appeared to cast doubt on its production agreement with the Kurdish region. Shares later pared their losses. An oil industry source told Reuters in Baghdad that the Iraqi government had no problem with a "Norwegian firm" that had signed a deal with the Kurds, without specifying DNO by name. In Olso, DNO said it was confident about the validity of its oil production deal with Iraq's regional Kurdish authorities.
Iraq's Deputy Prime Minister Barham Salih, an architect of the draft oil law, told Reuters after the cabinet passed it in February that it would allow the Kurdish regional government to review existing contracts it has signed with foreign firms to ensure consistency with the terms of the new law. Salih said a commission of independent experts would ratify consistency in case of contention and that regional authorities would be able to negotiate oil contracts with foreign companies based on "maximising revenues for Iraqi people."
Labels: Ashti Hawrami, Baghdad government, Barham Salih, Dana gas, DNO, draft oil law, Hussain al-Shahristani, Norway, Oil Ministry, UAE
