State Department slams Hunt Oil-Iraq deal

WASHINGTON, Sept. 28 (UPI) -- Oil deals with Iraq’s Kurdistan Regional Government hurt the federal legislative and reconciliation process, a U.S. State Department spokesman said.

“I’m not sure exactly how helpful it is for either any individual corporate entity or the Kurdistan Regional Government” to sign oil sector deals, Deputy Spokesman Tom Casey said at a news briefing when asked about Dallas-based Hunt Oil’s exploration deal. He noted a national oil law would trump a regional oil law, which the KRG just passed.

“It’s in the interest of everyone in Iraq to see a national set of laws governing the oil and gas industry,” Casey said. That national oil law is hung up in Parliament with various sides disputing the roles of the federal/regional/provincial governments in the oil sector, as well as how much access foreign/private oil companies should have to the oil.

Iraq has 115 billion barrels of proven reserves, the third largest in the world.

The Hunt Oil deal stands out for a number of reasons: It is the first U.S. firm to enter Iraq’s oil sector since the war, and Hunt’s chief executive officer is well-connected to the Bush administration.

The KRG announced the Hunt deal earlier this month, sparking accusations from Iraqi Oil Minister Hussain al-Shahristani it and other KRG oil deals like it were illegal. The KRG responded Shahristani was slowing progress and should either work to pass a federal law or resign.

Casey said the Hunt Oil deal and others “don’t contribute to a resolution that is in the best interest of the Iraqi people and they do elevate tensions” between the KRG and Baghdad.

CEO Ray Hunt is a major donor and fundraiser for President Bush and the Republican Party. He also sits on the President’s Foreign Intelligence Advisory Board, a key panel for global intelligence access and the president’s ear.

“I’m not sure how much contact there was between the company and officials, either in Baghdad or here,” Casey said. “Our public and private advice to any company anywhere in the world, regardless of who’s running it or who’s on the board or who’s there is … we don’t think that these kinds of deals are helpful.”

If Hunt asked, Casey said he’s “sure that that’s the message we conveyed.”

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Ben Lando, UPI Energy Editor