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ENERGY > Iraq’s Kurdish gov’t defies BP over Kirkuk

BAGHDAD / ISTANBUL

The regional administration in northern Iraq says a deal between the central Iraqi government and BP to develop the oilfields in disputed Kirkuk is not legal. A BP exec says there is no deal at all

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Security forces inspect a Kurdistan Democratic Party office in Kirkuk after a bomb attack, an issue of dispute between the Iraqi government and the KRG. AP photo

Security forces inspect a Kurdistan Democratic Party office in Kirkuk after a bomb attack, an issue of dispute between the Iraqi government and the KRG. AP photo

The autonomous Kurdistan Regional Government (KRG) in northern Iraq has rejected an alleged deal between Baghdad and BP for an oilfield in the disputed city of Kirkuk as “illegal.” The oil firm has said there is no deal, only immature plans for temporary assistance.

Iraq’s central government in Baghdad and the Arbil-based KRG are locked in a widening dispute over control of oil revenues, oilfields and territory that is fraying the country’s uneasy federal union while the ethnically mixed city of Kirkuk, sitting on the internal border between Iraq and Kurdistan, is at the heart of their long-running battle over constitutional rights to the crude reserves.

Addressig constitution

“Iraq’s citizens are simply tired of this sort of language of threat and intimidation, which in the cynical pursuit of narrow political agendas serves only to create division and strife,” the KRG said in a statement on its website.

“In terms of oil and gas management, the KRG firmly believes in, and abides by, the letter and spirit of Iraq’s permanent federal Constitution.”

Speaking to Reuters earlier in the week, Iraqi Minister Abdul Kareem Luaibi said there was a preliminary deal with BP to revive the Kirkuk oilfield, which is suffering output declines. “He reveals details of an illegal and unconstitutional plan to allegedly allow BP to enhance the recovery of some of the depleted fields in Kirkuk... without consulting and obtaining approval of the other parties to the dispute,” the KRG said.

However, there was no such finalized deal, a BP executive told the Hürriyet Daily News in a phone interview Jan. 18. “This is an offer for short-term technical assistance to develop oilfields there,” the source said, adding that the talks were continuing and no concrete accords had been signed.

The feud between Baghdad and the Arbil enclave, which has run its own regional administration and armed forces since 1991, has escalated since the KRG began signing deals with oil majors.

Separately, the toll from a spate of attacks across Iraq on Jan. 17 rose to 29 dead and 120 wounded, according to AFP. The attacks marked the third consecutive day of violence that claimed 88 lives overall, including that of a Sunni Iraqi member of Parliament killed by a suicide bomber and 33 others who died in twin car bomb attacks in Kirkuk.

Arbil defends oil trade with Turkey

BAGHDAD / LONDON - Reuters

Iraq’s Kurdistan Regional Government (KRG) defended as “constitutional” its oil policy with foreign companies and its crude trade barter with Turkey on Jan. 18.

Two days earlier, Iraq’s oil minister told Reuters that Baghdad’s central government would sue companies exporting crude from the KRG.

Speaking to Reuters on Jan. 16, Iraqi Oil Minister Abdul Kareem Luaibi said Baghdad intended to sue Ankara-based Genel Energy, the first company to export oil directly from the KRG, and may slash the government’s allocated 17 percent budget to the region unless it halts what he described as “smuggling.”

Turkey is geographically on northern Iraq’s sole route to reach global markets, which by-passes the central government.

Separately, Genel said in a statement on Jan. 18 that it was continuing its oil trade to Turkey in harmony with the KRG and that its research, development and production activities were financed from the cash inflow from the region.

The company, which is trading on the London Stock Exchange, estimated its 2012 revenues from sales to be $330 million, exceeding its initial forecast.

January/19/2013

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