RIYADH Nov 15, 2007 (AFP via Dow Jones Newswires)
Iraq warned Thursday 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 al-Shahristani said.
"We warned the companies that there will be consequences...that Iraq will not allow its oil to be exported," al-Shahristani told reporters on the sidelines of Organization of Petroleum Exporting Countries 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 finalized by the Kurdish regional government since it passed its own oil law in August.
The regional administration said 85% 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 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 announcements would be made soon.
But al-Shahristani warned foreign firms which sign contracts with the Kurds risk being blacklisted by Iraq.
"Our position is that any company that signs a contract without the approval of the federal authority will compromise their chances of getting business in future in Iraq," he said.
The Iraqi hydrocarbons law is stalled before parliament due to bitter differences between warring political factions over the sharing of lucrative revenues from the crude, the third-largest proven reserves in the world.
The bill opens up the long state-dominated oil and gas sector to foreign investment and assures that receipts will be shared equally between Iraq's 18 provinces, a measure Washington regards as key to unite the rival communities.
Al-Shahristani however said "for the time being, Iraq does not need production-sharing agreements" to increase its oil output.
He said Iraq is currently exporting more than 2 million barrels a day.
Copyright (c) 2007 Dow Jones & Company, Inc.
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