Baghdad stops Kurdish deals
Posted: 04 February 2008
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Despite repeated warnings to nullify contracts, the federal government of Iraq has taken action by suspending crude exports to countries involved in Kurdish oil contracts in protest against the ongoing deals made in the autonomous northern Iraqi state.
Iraq has stopped exports to Austria through OMV on Saturday and halted crude flow to South Korea’s biggest refinery SK Energy last week after its refusal to end its operations, agency reports said.
Minister of Oil Hussein Al-Shahristani said last year that it would not recognize foreign oil contracts and blacklist companies participating under agreement with the officials of the Kurdistan Regional Government (KRG).
According to reports, Baghdad deferred the South Korean contracts to export 90,000 barrels per day (bpd) on Jan.1 after giving the company an ultimatum to back out of the deal if it wants exports to resume.
Central Europe’s leading player, OMV signed two production-sharing contracts with the Kurdish administration for two exploration blocks in Irbil in November, but Iraq’s ruling government has later cut off around 10,000 barrels per day of Basra Light crude to Austria.
OMV has declined to comment but reiterated that their contract is constitutional, in accordance to the Iraqi laws, reports said.
Since last year, KRG has signed about 15 contracts brushing off Baghdad’s call to suspend its exploration and production activities.
The KRG estimates northern Iraq's oil reserves around 45 billion barrels of oil and 100 trillion cubic feet of gas. |
