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Iraqi oil deal signed despite U.S. warning

Aug. 30, 2011 at 10:25 AM

BAGHDAD, Aug. 30 (UPI) -- Hunt Oil Co. was warned before it signed a contract with the Kurdish government in Iraq that it might not be dealing in Kurdish territory, cables reveal.

The Dallas-based energy company signed a production-sharing contract with the Kurdistan Regional Government in 2007. It was warned by the U.S. Embassy in Baghdad that the license area outlined in the contract might not be officially recognized as inside Kurdish territory.

The cable, published by Internet watchdog WikiLeaks, quotes the embassy as warning there was "legally ambiguity" surrounding the deal because it fell within an area classified as disputed territories.

Arabs, Kurds and ethnic minority groups sprinkled throughout Iraq's north are squabbling over access to oil, autonomy in the disputed territories and a swath of land stretching from Sinjar in the northwest to Khanaqin in the north of Diyala province.

Hunt Oil landed the deal shortly after the KRG passed a regional oil law. Its owner, Ray Hunt, sat on the U.S. foreign intelligence advisory board when the deal was signed, the Platts news service notes.

The cables reveal, however, that Washington "discouraged" companies from doing business with the KRG until a national hydrocarbon law passed.

The KRG signed dozens of production-sharing contracts without the national law, however.

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