KRG PM Optimistic on Oil Talks, Iraq Stands Firm

Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani returned April 22 from "optimistic" talks with Iraqi Prime Minster Nouri al-Maliki regarding the temporarily stalled hydrocarbons law.

"I am very optimistic about our discussions with Prime Minister al-Maliki," said Barzani. "The problems we face will take time to solve. They are complex and every solution must consider the interests of all Iraqis."

Barzani said talks are continuing about the oil law, and he is encouraged by Maliki's apparent willingness to find a resolution that benefits both sides. On the other side of the tape, Iraq took a firmer stance.

Iraq's Oil Minister Hussein al-Shahristani said that despite the talks, oil contracts signed between KRG and foreign oil companies remain unacceptable.

"We do not recognize them," said Shahristani. "They [the Kurdish contracts] have to meet the conditions of the draft hydrocarbons law from 2007."

Barzani recognizes the importance of the original draft, saying, "All parties agree that the solution lies within a legal and constitutional framework, and that we will resume our negotiations where we left off, using the draft hydrocarbon law of February 2007.

"We have also agreed that the national oil law, the revenue sharing law and the laws concerning the Iraqi National Oil Company and the Oil Ministry in Baghdad will be submitted as one package."

Shahristani said that the Iraqi government would require that any contracts signed by KRG and foreign oil companies meet current government guidelines, and he says they do not.

The guidelines include validating which companies are authorized to work in Iraq and the institution of a bidding round so that numerous companies are attracted.

"The national hydrocarbon law will contain the mechanism for a federal commission of technical experts to confirm contracts using agreed criteria," said Barzani. "Since the KRG's contracts have been drafted in a transparent, legal and professional manner and approved on the basis of technical, not political, considerations I do not anticipate any problems."

Since 2004, KRG has signed approximately 25 production-sharing contracts with foreign oil companies.

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