Wednesday, September 12, 2007


KRG defends oil contract with Hunt Oil Co.

Oil, Kurdistan
(Reuters) - The government of Iraq's Kurdish region on Tuesday defended an oil and gas production contract it has concluded with a U.S. company, rejecting remarks by the country's oil minister who questioned its legality. The semi-autonomous Kurdistan Regional Government (KRG) said on Saturday it had signed the production sharing contract with a unit of U.S.-based Hunt Oil Co. and with Impulse Energy Corp.
Media reports have quoted Iraqi Oil Minister Hussain al-Shahristani as saying that the deal "has no standing" because it was not approved by the central government in Baghdad. "Shahristani's recent remarks about the legality of the KRG's contracts are totally unacceptable..." said Khaled Salih, spokesman of the Kurdistan regional government, in a statement made available to Reuters. "His (Shahristani) views are totally irrelevant to what we are doing legally and constitutionally in Kurdistan.
"The deal is the first such contract since the region passed its own oil law in August, while Iraq's parliament failed to pass a national law after months of negotiations. The national law is crucial to regulating how wealth from Iraq's oil reserves, the world's third largest, will be shared out among its sectarian and ethnic groups. The reserves are mainly in the north and the south of the country. "What right does Shahristani have to question the legitimacy of contracts awarded by KRG acting under the powers of the newly enacted law passed by the unanimous decision of the Regional Parliament and according to the new Iraq constitution?" the statement said.
The deal covers exploration activity in the Dihok area. Hunt Oil Co. of the Kurdistan Region will begin geological survey and seismic work by the end of 2007 and has plans to drill an exploration well in 2008. The regional government has signed five production sharing agreements earlier with foreign companies.

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