Kurds in Baghdad for new oil talks

Jan. 23, 2008 at 5:34 PM   |   0 comments

BAGHDAD, Jan. 23 (UPI) -- Iraq's Kurdish oil leaders are in Baghdad to clear an impasse over oil control, though the national oil minister is reportedly not in town.

That could be the point, since some Kurdish leaders have called for Oil Minister Hussain al-Shahristani to be removed from office.

Shahristani has confirmed attendance at the World Economic Forum in Davos, Switzerland, which began Wednesday. A U.S. State Department official is reportedly mediating.

The Kurdistan Regional Government and the national government have been at an evolving stalemate over oil issues for more than a year. The two sides have yet to reach agreement on a new national oil law, called for in the constitution but stalled over its interpretation.

The KRG favors decentralized oil control, allowing the producing regions and provinces more say in the pace and method for developing the respective oil sector. Others want the oil strategy to be a central one.

The KRG has been developing its oil sector for three years. It has little of Iraq's proven oil reserves -- the third largest in the world -- but experts say there could be a bonanza when it's fully explored. The KRG had signed a small handful of deals with international oil firms prior to February 2007 when a deal was supposedly reached over the oil law.

But disagreements over control arose, and a wedge between the two sides grew. In August the KRG passed its own regional oil law and since then has signed dozens of new deals.

Shahristani initially called them illegal, then null and void, and has since made good on the threat to blacklist any oil firm with a KRG deal from receiving any contracts in upcoming national tenders.

"The oil companies operating in the Kurdistan Region insist on working in the region and don't pay any attention to Shahristani's threats," said Falah Mustafa Bakir, The Kurdish Globe reports. Bakir won't meet with Shahristani, The Globe reports, and Mahmoud Othman, a Kurd and parliamentarian, said the current meetings on the oil issue will be final.

Weekly Petroleum Argus reports the Kurds are asking Prime Minister Nouri al-Maliki to delegate his energy adviser, Thamir Ghadhban, instead of Oil Minister Hussain al-Shahristani in new oil law talks in Parliament's Energy Committee.

KRG Minister of National Resources Ashti Hawrami led a delegation last month as well. The Globe reports Reuben Jeffrey, a top U.S. State Department official tasked with moving the oil law along, will facilitate.

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