Iraq's Ex-oil Chief Accuses Kurds
of Suspect Contract

Oct. 11, 07

NICOSIA (AFP) -- An Iraqi oil minister under executed dictator Saddam Hussein accused the Kurdistan Regional Government of awarding an oil contract last month to a US company for areas outside its territorial control.

In an interview published in the latest edition of the Middle East Economic Survey, Jordan-based Issam Chalabi said the production-sharing contract signed with Hunt Oil will cause more friction between the Baghdad government and the Kurdish authorities.

Baghdad has already criticised the Kurdish authorities for signing deals with international oil companies before the federal oil law has been approved.

If confirmed, the latest development would suggest the KRG may have broader political ambitions for control of oil and gas in the disputed areas adjacent to its territory in northern Iraq, said Chalabi.

The Hunt deal covers four structures in Blocks 6, 7 and 8 - Jabal Kand, Fajir, Nerjis and Ain-Sifni - in the Dahuk area in the northwest of the KRG region, he said. The Kurdish authorities have released no specific details of the deal.

Chalabi, who held the Iraqi oil portfolio from 1987 to 1990, said "the first three structures fall outside the jurisdiction of the KRG, in the Nineveh governorate."

He told MEES that Hunt's signing with the KRG for terrain outside its three governorates of Dahuk, Arbil and Sulaimaniyah would have negative legal and political implications.

"This will be considered a very serious matter from a political point of view between the central government and the KRG," he said, adding that this was especially true since Hunt Oil is a US company.

The former minister said his suspicions about the Hunt agreement were raised because, in contrast to other awards made by the KRG, no information about the blocks concerned or their location was announced by the Kurdish authorities.

Speaking in general terms about Kurdish contracts with international oil companies, Chalabi said he supported the Iraqi government's denouncement of the contracts as illegal.

"I think they are absolutely right, because even if you go to the constitution it says in Article 111 that oil and gas are the property of all the Iraqi people.

"This means agreements ought to be signed by the only body that represents those Iraqi people, and in the absence of an oil law that gives particular authorisation to anyone else, it must be only the central government that has the right to sign these contracts," he said.