Bush administration encouraged Oil Deal in 'Kurdistan', undermining Iraqi "National Unity"

David Walsh, WSWS

4 July 2008

The Bush administration publicly criticized a deal made between Hunt Oil of Dallas, Texas and the Kurdistan Regional Government in Iraq last September for supposedly undermining Iraqi "national unity," while privately officials were facilitating the oil firm’s activities, documents released this week by the US House Committee on Oversight and Government Reform reveal.

Hunt Oil, whose chief executive Ray Hunt has been a major backer of George W. Bush, signed the agreement with the Kurdish government on September 8, 2007 to explore and develop oilfields in the region.

No national law on the division of oil revenues had been passed at the time (and still has not been), and the agreement outraged Iraqi government officials fearful that Baghdad would be cut out of its share of lucrative oil profits by such arrangements and that the country might well break up under centrifugal pressures. At the time Iraq’s oil minister, Hussein al-Shahristani, called the deal "illegal."The Bush administration echoed these remarks.

The president stated on September 20, 2007: "I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I’m concerned."A State Department official told the press: "It’s counterproductive. Our view is the contract process should be controlled by the central government and that these regional deals could become illegal if an oil law is passed."

The Assistant Secretary of State for Legislative Affairs, Jeffrey T. Bergner, wrote to a Congressional committee in October 2007 that, in his department’s view, "the signature of such contracts would needlessly elevate tensions between the KRG [Kurdish Regional Government] and the Government of Iraq."

Bergner went on to say, "We believe it is in the best interest of Iraq for all interested parties to agree to a single central approver of contracts so that Iraq’s oil and gas resources can be developed in accordance with a rational plan."

This was all for public consumption. Behind the scenes, US government officials were assisting Hunt, a former member of the board at Halliburton (1998-2007), who has contributed $35 million toward the building of a Bush library, to land the deal with the Kurds.

The documents released by California Democratic Congressman Henry Waxman’s Oversight and Government Reform committee include an email from David McDonald, Hunt Oil’s General Manager for Europe, Africa and the Middle East, reporting on conversations with US government officials held June 12 and 15, 2007 in Erbil, the capital of the Kurdish autonomous region.

McDonald sent the message in late September 2007, after the Hunt deal had been publicly censured by Bush and other administration officials.In the email, addressed to Hunt Vice President Ken Topolinsky, McDonald writes about the initial discussion with US officials on June 12: "I described our visit as a security and business opportunity assessment, we discussed their views about security, power supply."

The officials, including members of the State Department’s Regional Reconstruction Team for the Kurdish region, suggested that McDonald return for another discussion three days later "when the expert concerned with the petroleum industry would be present."McDonald did so, and on June 15 another conversation took place between the Hunt oilman and US government representatives, among them, the "Senior Economic Adviser, Regional Reconstruction Team, USAID Northern Region."

In response to a question about production sharing contracts, McDonald explained that "I answered with a demonstration on a whiteboard of the terms of the agreement how royalties, cost oil, and profit oil are calculated and noted that the KRG contract [model production sharing agreement on the KRG web site] is consistent with agreements in use around the world and in fact is a sophisticated agreement.

I specifically asked if the USG [US government] had a policy toward companies entering contracts with the KRG and [blacked out name] replied that there was no policy, neither for nor against."McDonald notes other contacts with American government officials in August and early September 2007, and concludes: "There was no communication to me or in my presence made by the 9 state department officials with whom I met prior to 8 September that Hunt should not pursue our course of action leading to a contract. In fact there was ample opportunity to do so, but it did not happen."The Commerce Department official who participated in the June 12 meeting, wrote Hunt Oil executives that same day: "It was a real pleasure meeting with you today, hope you [have] a fruitful visit to Kurdistan ... Please feel free to contact in case you need any support from our office here in Erbil."Casting further doubt on State Department claims that it was discouraging deals similar to the one Hunt was making with the Kurdish government, a few days after the agreement was announced in September, the Deputy Director of the US Regional Embassy in Basra wrote to a Hunt official, "I read and heard about with interest your deal with the regional Kurdish government," and went on to tip her off about "another opportunity," a liquefied natural gas refinery in southern Iraq. He added, "This seems like it would be a good opportunity for Hunt."

As to the White House claim that it knew nothing about the deal, Ray Hunt’s own political relationship with the administration puts the lie to that. Aside from being a billionaire oilman, Hunt is a member of the President’s Foreign Intelligence Advisory Board (PFIAB), along with 15 other business, military and intelligence types. Hunt dispatched two letters informing the PFIAB of his Kurdistan venture, presumably because the latter would involve contact with representatives of a foreign government.

On July 12, he wrote: "We were approached a month or so ago by representatives of a private group in Kurdistan as to the possibility of our becoming interested in that region. We had one team of geoscientists travel to Kurdistan several weeks ago and were encouraged by what we saw. We have a larger team going back to Kurdistan this week but who they will actually meet with while they are there and what the relationships of those people might be with the Government of Kurdistan are both unclear at this time."

Some six weeks later, Hunt wrote again to the PFIAB, informing board members of his upcoming visit to the region: "While my schedule is still fluid, there is a high likelihood that I will meet with President Masoud Barzani, the Prime Minister, the Oil Minister and various other individuals associated with the government of Kurdistan." The visit bore fruit.

Barzani said recently, in response to criticism from Baghdad, that the more than 20 production-sharing contracts his government has signed with foreign oil companies since passing its own gas and oil law in August 2007 are "irreversible." He added, "Anyone who wants to put off these deals is a dreamer."

The Iraqi oil ministry has threatened to blacklist any oil firms making deals with the KRG, but that has not stopped the flow of such agreements. In late June, the Kurdish regime announced a new package of oil deals with South Korea’s state oil company.

The revelations about the US government and its dealings with Hunt come in the context of the recent announcement that American and European oil giants Exxon, Shell, BP and Total are receiving no-bid service contracts from the Iraqi government, deals that are simply the foot in the door for the massive companies.

The Bush administration claimed in this case too that it had nothing to do with the negotiations. Secretary of State Condoleezza Rice stated, "The United States Government has stayed absolutely out of the matter of the awarding of Iraq oil contracts." A State Department spokesman declared, "These are Iraqi contracts. They were made by Iraqis, for Iraqis."

Everyone over the age of 10 knows that these claims are boldfaced lies. The US intervened in Iraq to seize control of the country’s oil reserves and assert its hegemony throughout the petroleum-rich Middle East. All the stated reasons—weapons of mass destruction, the Hussein regime’s ties with Al Qaeda, the establishment of democracy—have been exposed as falsehoods, and now, some five-and-a-half years later, the truth is emerging for all to see.

This is a potential embarrassment to the American ruling elite. Rep. Waxman makes clear that the brazenness of the Bush administration’s actions is a political problem: "The documents the Committee has received about Hunt Oil show that in matters involving Iraqi oil, official denials of knowledge and involvement can be misleading.

This is a serious matter because of the widespread suspicion in Iraq and other nations that the United States went to war to gain access to Iraqi oil.

"As to why the State Department aided Hunt in Kurdistan, effectively undermining official policy in support of Iraqi "national unity," the Bush administration is no doubt keeping all its options "on the table."

Washington is duplicitous in its dealings with the puppet regime in Baghdad, which it mistrusts and believes is too close to the Iranians, as it is with everyone else.

Voices have loudly been raised in favor of partition of the country, legal or de facto, and this policy has its backers in the administration. At the time of the Hunt deal signing last year, New York Times columnist Paul Krugman noted that Ray Hunt, "thanks to his policy position, is presumably as well-informed about the actual state of affairs in Iraq as anyone in the business world can be. By putting his money into a deal with the Kurds, despite Baghdad’s disapproval, he’s essentially betting that the Iraqi government ... won’t get its act together. Indeed, he’s effectively betting against the survival of Iraq as a nation in any meaningful sense of the term.

"The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia. And I suspect that most people in the Bush administration—maybe even Mr. Bush himself—know this, too."

Bush officials no doubt believe that there are various routes to the exploitation of Iraqi oil reserves. They are pressing for a national oil law, but see no difficulty in helping open up the Kurdish region to foreign predators in the meantime. Their policy is shortsighted and reckless, but this has been the character of the administration’s actions all along. The criminal plundering of Iraq’s natural resources, in the interest of the American corporate oligarchy, does not lend itself to rational, long-term planning.

Billions of dollars are at stake, and no doubt the administration did what it could to pass along some business to Hunt, a close political ally, whatever the ultimate consequences. A State Department official’s September 2007 email notes that when asked about "concerns over potential conflicts between the recently passed KRG hydrocarbon law and an [sic] national law," Hunt’s McDonald said "the 'significant opportunity’ outweighs the legal ambiguity." Indeed.It is worth noting that the Hunt name has a special political connotation.

The founder of the company, H.L. Hunt (1889-1974), Ray Hunt’s father, made a fortune in the oil industry in Texas. In 1957 Fortune magazine estimated that Hunt was worth $400-700 million, making him one of the eight richest individuals in the US.Hunt was a fanatical right-winger and anticommunist. In 1951, he launched the Gen. Douglas MacArthur for president campaign with a chunk of his own money. Later, with two of his sons, he set up a right-wing "intelligence network," the International Committee for the Defense of Christian Culture.

Hunt was involved in various ultra-right activities, including anti-Castro operations, and was a member of the John Birch Society. He also apparently helped bankroll the career of Democratic President Lyndon B. Johnson.Ray Hunt was appointed the finance chairman of the Republican National Committee’s Victory 2000 Committee. During that campaign he was designated one of the 241 Bush "Pioneers," thanks to his raising more than $100,000 in donations from his family. In 2004, Hunt and his wife donated $190,000 to the Republican cause.

In addition to his seat on the Foreign Intelligence Advisory Board, Hunt serves as chairman of the Federal Reserve Bank of Dallas and is a member of the National Petroleum Council, which advises the president on energy policy. As noted above, Hunt also served on the board of Halliburton, the firm once headed by Vice President Dick Cheney.

www.wsws.org/articles/2008/jul2008

Iraq Kurd oil sales, signing bonus waiting for Baghdad

Ashti Hawrami, Kurdistan Regional Government minister of natural resources, in his office in Erbil, Iraq. (Ben Lando/UPI)



By BEN LANDO, UPI Energy Editor
Published: June 10, 2008

ERBIL, Iraq, June 10 (UPI) -- Iraq's Kurdish region has been collecting millions of dollars in signing bonuses for 19 oil deals inked with international oil companies but is waiting for a federal revenue-sharing law before turning it over to Baghdad.

The signing bonuses vary from between $1 million and $5 million "to sometimes more than that," said Kurdistan Regional Government Minister of Natural Resources Ashti Hawrami, though he wouldn't give details "until we publish the information."

"It will be published probably within a month or two. We're currently working on compiling all of our agreements, and then we will just put all the information on the KRG Web site," he told United Press International at his office in the KRG capital. He said the funds are being held in an account "in Erbil."

"The signing bonuses are part of the oil revenue, and they should be accounted for as such. That money hasn't been touched by the regional government. It's basically accounted for to be deposited when we have an agreed revenue sharing law."

Also to be published are details of what is required of the contractors, aside from searching for and producing oil and gas.

"We have placed quite a lot of burden on the contractors on the local content, i.e., through employment, training, capacity building, expats (foreigners) coming in to help us, technology transfers, just to make sure that we can benefit from the contract in a variety of ways, also this includes environmental fund and so on," he said. "We want the contract area to benefit from the contractor's good will and corporate responsibilities. You're going there and you're disturbing everybody's life in terms of seismic activities, drilling, housing, expats coming and going.
"We're basically putting the burden on the contractor to really make an impact locally at the contract area, the villages, the area affected, to contribute to them. Maybe building a couple schools, a hospital, or maybe contributing to a government program. We call that local capacity support.

"We're also doing some sales of crude oil internally now," he said. "A few million dollars of revenue is accumulated, again this revenue is accounted for in the same way."

The 19 oil and gas deals with foreign companies are part of a dispute with Baghdad over control of the hydrocarbons development. The federal Oil Ministry has called most of them illegal. This contention has stalled talks on a package of oil-related legislation including a new oil law, a revenue-sharing law and laws reconstituting the national oil company and reforming the Oil Ministry.

And although only two of the 19 oil deals have resulted in oil production, none is being exported, he said.

"The government share of the revenue belongs to all Iraqi people. We will deal with that and account for it, but in practice we haven't reached there yet."

Small local refineries are taking what is produced by Norwegian firm DNO and the Taq Taq Operating Co., the joint venture of Turkey's Genel Enerji and Canada's Addax Petroleum. But as these and the other contracts start increasing flow, the KRG plans to have the capacity to keep some crude at home.

"Cumulatively probably we're going to build about 100,000 barrels per day refinery capacity, which basically should solve most of our domestic problems," Hawrami said. One is to be built by Heritage Oil of Canada and the other by Genel, both at the site of their respective exploration blocks.

"It is difficult to forecast these things because they are not entirely under our control," he said. "Typically I think two years from the date of the award is about right for these refineries, which under the current environment is considered to be a fast track, because the refinery builders have full orders, much bigger orders, and so on."

Kurds sign more oil deals with South Korea

Media reports from Seoul say Iraq’s Kurds have signed deals for oil and other projects with a South Korea consortium, but details are sketchy, United Press International reports.

If so, the move would heighten current tensions between the Kurdistan Regional Government and Iraq’s central government, and mark a departure from the previous 20 controversial oil deals that were announced with fanfare by the KRG itself.
Part of the deal, it appears, is a construction of roads and other infrastructure package with South Korean firms.

Bloomberg’s Kyunghee Park has more.


http://iraqoilreport.com/2008/02/16/confusion-on-reports-iraq%e2%80%99s-kurds-have-signed-more-oil-deals-with-south-korea-sure-to-irk-baghdad%e2%80%a6/

Protesters greet Iraqi Oil Officials in London

February 05, 2008
LONDON -(Dow Jones)-

Iraqi oil officials and oil company executives were greeted by demonstrators in London Tuesday protesting long-term oil contracts being signed in Iraq, which they say are handing control of the country's oil wealth to private foreign enterprise.

Iraq Oil Minister Hussain Al-Shahristani, Ashti Hawrami, minister of natural resources for the Kurdistan Regional Government, and executives from companies like BP PLC (BP), Exxon Mobil Corp. (XOM) and others were among the attendees at a Middle East oil conference being held by London-based think tank, Chatham House.

About a dozen protesters with placards, some calling out "No to cheap Iraqi oil," stood outside the conference venue. One of the demonstrators, Greg Muttitt, co-founder of London-based oil industry watchdog Platform, said contracts known as production sharing agreements, or PSAs, were being struck in Iraq under pressure from Western governments, which benefit foreign companies at the expense of Iraqis.

"They give control of Iraq's oil to multinationals for 20-30 years. It's like giving my house to a decorator and renting a room back from him," Muttitt said.

Gabriel Carlyle, another proteter, said polls show that a large number of Iraqis are against such contracts and called the companies "war profiteers" working with western governments to exploit Iraq.

Muttitt said the Kurdistan Regional Government's recent signing of oil contracts with foreign companies a move that effectively hands the Iraqi Kurds' new-found autonomy over to foreign governments and oil companies. "What they're doing now is jumping out of a frying pan into the fire...taking their sovereignty and surrendering it," Muttitt said.

The demonstrators said they were not against Iraq seeking technical expertise anf financing from foreign oil companies in order to rebuild the war-torn industry but opposed the exploitative deals they said were being struck.

-By Natalie Obiko Pearson and Lananh Nguyen, Dow Jones Newswires natalie.pearson@dowjones.com.

Kurds' Power Wanes as Arab Anger Rises

Article by Alissa J. RUBIN, published in The New York Times on February 1, 2008.

Comment: Following the neo-cons' false classification of the Iraqi people:"Kurds, Sunnis and Shiites", the author has completely ignored the existence of the Turkmens in her article.
How can one write about Kerkuk and not mention the Turkmens, the city's original inhabitants? The Turkmens together with the Arabs are opposed to the inclusion of Kerkuk into the Kurds' semi autonomous region! The Turkmens cannot be left out of the equation and I am glad that our friend Mr. Abed Moutlaq Al-Juburi (an Arab) who is from Kerkuk confirmed this in his speech at the Venice conference in December 2007 (see previous post).



As a minority group in Iraq, the Kurds have enjoyed disproportionate influence in the country’s politics since the ouster of Saddam Hussein in 2003. But now their leverage appears to be declining as tensions rise with Iraqi Arabs, raising the specter of another fissure alongside the sectarian divide between Sunnis and Shiites.

The Kurds, who are mostly Sunni but not Arab, have steadfastly backed the government, most recently helping to keep it afloat when Prime Minister Nuri Kamal al-Maliki lacked support from much of Parliament.With their political acumen, close ties to the Americans and technical competence at running government agencies, the Kurds cemented a position of enormous strength. This allowed them to all but dictate terms in Iraq’s Constitution that gave them considerable regional autonomy and some significant rights in oil development.

But now the Kurds are pursuing policies that are antagonizing the other factions. The Kurds’ efforts to seize control of the oil-rich city of Kirkuk and to gain a more advantageous division of national revenues are uniting most Sunnis and many Shiites with Mr. Maliki’s government in opposition to the Kurdish demands.

For the United States, the diminution in Kurdish power is part of a larger problem of political divisiveness that has plagued its efforts to build a functioning government in Iraq. While several political parties can come together to address a particular issue, none can seem to form the lasting allegiances needed for actual governance.

The Kurds, with their pro-American outlook, were a natural ally. But now the Americans are increasingly placed in the uncomfortable position of choosing between the Kurds, whom they have long supported and protected, and the Iraqi Arabs, whose government the Americans helped create.

One major Shiite group, the Islamic Supreme Council of Iraq, has not publicly taken sides, but powerful people within the party have been openly critical of the Kurds. Others expressing frustration are leading members of Parliament and Hussain al-Shahristani, the oil minister and a prominent Shiite politician, who calls Kurdish oil contracts with foreign companies illegal.

Humam Hamoudi, a leader of the Islamic Supreme Council of Iraq, said, “They are no longer the egg in the balance,” using an Arabic proverb that refers to the item that tips the scale. Mr. Hamoudi added, “The Kurds are not so powerful.” Independent analysts largely back that assertion.

“There’s a strong feeling that the Kurds have overreached,” said Joost Hiltermann, a senior analyst for the Middle East at the International Crisis Group who is based in Istanbul.“ The Kurds had their eye on independence in the long term, and they wanted to use the current window to increase the territory they hold and the powers they exercise within the territory,” he added. “They’ve done well on the powers, but not so well on the territory. They now face real restrictions.”The jousting threatens to undermine much of what the Kurds have achieved in political influence and to supersede, at least temporarily, the far deeper divide between Sunnis and Shiites.

And by helping unite Sunnis and Shiites, the Kurds’ overreaching has strengthened the hand of Mr. Maliki despite widespread doubts about his ability to govern effectively. The tensions could even persuade the central government to further postpone an already delayed referendum on whether to make Kirkuk part of the Kurds’ semiautonomous region.

“The government got a lot of support when they stood against the exaggerated demands of the Kurds,” said Jaber Habeeb, an independent Shiite member of Parliament who is also a political science professor at Baghdad University. But to capitalize on this support, which is almost certain to be temporary, he said, the government must move quickly to improve electricity, water and other basic services.

The Kurds have been locked for decades in a power struggle with Sunni Arabs, most recently with Mr. Hussein. That led to the Hussein government’s Anfal campaign, in which about 180,000 Kurds died and 2,000 Kurdish villages were destroyed, according to Kurdish counts.

The United States and its allies created a no-flight zone over the Kurdish areas after the Persian Gulf war in 1991, and the areas have since become increasingly affluent. While much of Iraq has been engulfed in violence since 2003, Kurdistan has been notably peaceful, with streams of foreign investment and a building boom in Erbil, the largest city. Against that backdrop, the Kurdish aspiration to bring more territory, including Kirkuk, into its semiautonomous region looks greedy to the Arabs.

In a signal of its displeasure, Parliament has refused to approve a new budget because it awards the Kurds 17 percent of the total revenues, which many representatives say is more than their share based on population. Because Iraq has not had a census in decades, it is impossible to know the true size of the Kurdish population. Some Kurdish leaders say it could be 23 percent; some Arabs say it is 13 percent.

The Kurds are also believed to collect millions of dollars in duties on goods coming into Iraq but they neither send the money to Baghdad nor share accounts of the income, according to the International Monetary Fund.

Parliament members are also angered that the Kurds want Baghdad to pay salaries of their militia, the pesh merga, from the Defense Ministry’s budget. The pesh merga operate primarily in Kurdistan rather than serving the country as a whole.However, the Kurds contend that in the event of an invasion they would be on the front lines. Such a situation seems all too real to the Kurds, because Turkey has recently threatened to invade to rout the rebel Kurdistan Workers Party. The rebels have been mounting attacks over the border into Turkish territory.

Perhaps most grating for Iraqi Arabs, the Kurds have refused to back down on the oil exploration contracts they have signed with foreign companies. Arabs view the central government as the only entity empowered to approve contracts, albeit in consultation with the regions where the oil is located.

The Kurds argue that the central government has been dragging its feet on an oil law and that they cannot afford to defer oil exploration and development further, said Ros Shawees, a former vice president of Iraq and point man in Baghdad for Massoud Barzani, the president of the semiautonomous Kurdistan Regional Government.

The Kurds acknowledge that they are worried by the opposition that has developed, although they are reluctant to concede that they may have overplayed their hand. “It is necessary to keep such feelings to a minimum,” Mr. Shawees said. “We have to work in different respects to show that the Kurdish region doesn’t just make demands and take things, but that the region is an example for all regions and it can benefit all Iraq.”

For now, however, the budget has yet to be approved, the oil law and revenue sharing laws are in limbo, and there is a new and visible fault line on the Iraqi political scene.

Source: New York Times, February 1, 2008

Iraq keeps word, punishes Korea for oil contracts in Kurdish region

The New Anatolian / Ankara
29 January 2008

The Oil Ministry in Baghdad announced Tuesday it has halted oil exports to South Korea in protest over an illegal deal between Korean firms and the Kurdish regional government. Iraq last month warned South Korea to scrap the oil contracts with the Kurdish Regional Government or face a ban on oil,exports.

According to the Oil Ministry, Iraq suspended an annual contract with South Korea's top refiner SK Energy on January 1 to export 90,000 barrels per day. Iraq has given SK Energy until Jan. 31 to back out of the Kurdistan deal if it wants exports to resume.

Baghdad has warned other customers that they must cancel deals with the Kurdish region. A consortium of South Korean firms including SK Energy signed a deal in November with the Kurdish government to explore the Bazian field, which is estimated to hold 500 million barrels of crude oil. Iraq has demanded that the consortium led by state-run Korea National Oil Corp cancel the exploration project. The corporation has refused to abandon the deal.

Iraq has been at odds with regional governments over control of new exploration areas.

The dispute has not badly hit supplies because Iraq accounted for less then three percent of total crude imports last year, the Korean Energy Ministry said. The shortage was covered by purchases on the spot market, he said.

Seoul has about 600 troops stationed in the Kurdish region for reconstruction projects. Parliament voted in late December to keep them there for one more year.The extension was South Korea's fourth since 3,000 troops were deployed with a one-year mandate in 2004 at the request of the US government.

http://www.thenewanatolian.com/tna-30964.html

Iraq's natural resources should be controled by the central government!

http://www.iwpr.net/?p=icr&s=f&o=342253&apc_state=henh

Rifts over oil, Kerkuk and Peshmerga threaten alliance between Kurdish authorities and central government.

By Wrya Hama-Tahir in Sulaimaniyah (ICR No. 244, 25-Jan-08)

Excerpt

Tensions are building between Kurdish leaders and Arab prime minister Nouri al-Maliki’s government in Baghdad, threatening to divide two of Iraq’s strongest political allies.

Kurdish leaders accuse Maliki’s government of not acting on issues most important to the Kurds, such as resolving a dispute over ownership of Kerkuk province and the funding of Kurdish forces known as the Peshmerga.

At the same time, the Iraqi Kurdish government has forged ahead with signing private oil contracts without the approval of the central government, irking Baghdad and reigniting debates about how much power Iraq’s regional governments should hold.

The Kurdish Alliance, the second-largest political bloc in the country, holds 53 of Baghdad parliament’s 275 seats and are members of Maliki’s Shia-led government. The recent tensions have damaged one of the strongest alliances in Iraq’s severely fractured political landscape.

..............

Iraqi Kurdistan’s decision to sign independently about 15 oil contracts with international firms is one of the most contentious issues.

The region approved an oil law last year that paved the way for the agreements. The politically paralysed central government has yet to vote on a national oil law.

The Iraqi constitution states that central government controls oil revenues, however it does not stipulate who should manage issues like oil contracts and production.

The Kurdistan Regional Government’s natural resources minister Ashti Hawrami is in Baghdad this week to try to resolve the oil contracts dispute with the oil ministry, according to the Patriotic Union of Kurdistan’s news service. Nechirvan Barzani, the KRG’s prime minister, was not able to resolve any of the issues during a visit to Baghdad earlier this month.

Iraqi oil minister Hussein al-Shahristani deems the KRG’s contracts illegal and has threatened to bar oil firms working for the Iraqi Kurdistan authorities from doing business with Baghdad.

Last week, in a challenge to the Kurds, 145 MPs from a dozen political lists - including Sunni and Shia Arabs, Turkoman and Yezidis - signed a declaration supporting the central government’s control over all of Iraq’s natural resources.

The MPs also said that Iraq’s political factions should resolve the future status of Kerkuk without a referendum. Although Article 140 of the Iraqi constitution called for a plebiscite to be held on Kerkuk by the end of 2007, the vote has been postponed in part because of rising violence in the province.

The delays over Kerkuk, an oil-rich city which is home to Kurds, Turkoman and Arabs, has frustrated Kurdish leaders who want it to be administered by the KRG. Kurdish leaders are under heavy public pressure to bring Kirkuk under KRG control, as many Kurds believe that Kerkuk is a historically Kurdish area.

The late Iraqi leader Saddam Hussein carried out several ethnic cleansing operations in Kerkuk to change the demography of the province. Thousands of Kurds and Turkoman were displaced from the city and Arabs replaced them. Meanwhile, the KRG is waiting for Maliki to approve funds for 80,000 Peshmarga fighters, and there is an ongoing debate over how much revenue Iraqi Kurdistan should receive from central government: The Kurds maintained that they are 17 per cent of the population and, as such, are entitled to 17 per cent of oil revenues, while non-Kurds have argued that Kurds are only 13 per cent of the population. Iraq has not had an accurate census in decades.

Wrya Hama-Tahir is an IWPR correspondent in Sulaimaniyah. Zainab Naji contributed to this story from Baghdad.

Iraq political fight over Kurd oil deals

BAGHDAD, Jan. 14 (UPI)
-- An Iraq Oil Ministry spokesman says firms that deal with Kurds will be kept out, while a Kurdish parliamentarian calls for the minister's job.The back-and-forth is the latest in an oil dispute between the Kurdish and central governments over who has the right to set oil policy.

Leaders of Sunni and Shiite Arab political blocs have also made a pact against the Kurds' attempt to fold oil-rich Kirkuk into the official Kurdistan Regional Government territory.

Last week the national Oil Ministry announced a Jan. 31 deadline for companies interested in oil deals Iraq to pre-register."The Oil Ministry would not allow international corporations that already signed oil contracts with the government of Iraqi Kurdistan to invest in Iraq," Assem Jihad told the Voices of Iraq news agency.

The KRG has passed its own regional oil law and signed dozens of exploration and production contracts with foreign firms. The Kurdistan and national governments disagree on a national oil law that would govern the country's reserves.

The KRG wants a decentralized law, allowing producing regions and provinces to strike deals. Others want oil policy to be set and carried out from Baghdad. Each claims the constitution is on their side and blames the other for stalling the law.

The KRG has little of Iraq's proven reserves but expect to find sizeable amounts. KRG Natural Resources Minister Ashti Hawrami has set medium-term production target of 1 million barrels per day. The Ministry has called the KRG deals illegal and threatened to blacklist any companies. It notified a South Korean refiner to choose between continued sales of Iraq oil or moving forward as part of a consortium in a KRG deal.

"The Kurdistan Coalition will have to call for changing (Oil Minister Hussain al-Shahristani) if he insists on his position," a Kurdish member of Iraq's Parliament told VOI. The KC is the second largest block in Parliament and is a key member of the current ruling coalition.

Azzaman newspaper reports disaffected political parties, including the Iraqi List, National Dialogue Front, Accord Front and Sadr Movement, signed a memorandum of understanding against the Kurds' oil deals. It also criticized a plan for the oil-rich northern Kirkuk to be made part of the KRG area.