Iraq Oil Min: Kurdish Oil Deals Still Invalid, Despite Talks

ROME, April 21, 2008 (Dow Jones Newswires)

Iraq's Oil Minister Hussein al-Shahristani said Monday that crude oil contracts signed between the autonomous Northern Iraqi Kurds and foreign companies remain invalid, despite recent amicable talks between the two sides over the country's long-delayed federal hydrocarbons law.

"We do not recognize them," al-Shahristani told reporters on the sidelines of the International Energy Forum here.

Al-Shahristani said discussions between Baghdad and the Kurds would continue but that the Kurds, who have signed around 25 production-sharing contracts with several small and mid-sized oil companies, would have to follow many federal guidelines that they currently don't meet.

These include determining which foreign oil companies are qualified to work in Iraq and holding an open bidding round that attracts many companies, Shahristani said.

"They (the Kurdish contracts) have to meet the conditions of the draft hydrocarbons law from 2007," he said.

The contentious dispute between the two sides has dragged on for many months and delayed agreement on a final oil law that Iraq needs to provide the legal framework critical to attracting foreign investment and ramp-up oil production.

Passage of a draft oil law was expected back in 2005.

ROME, April 21, 2008 (Dow Jones Newswires)