U.S. warns oil majors of risks in Iraq

Aug. 21, 2012 at 6:07 AM

WASHINGTON, Aug. 21 (UPI) -- Washington has advised U.S. energy companies working in Iraq that signing deals without Baghdad's approval is a risky move, a government spokeswoman said.

The central government in Iraq warned last week it was considering cutting ties with foreign energy companies signing unilateral deals with the semiautonomous Kurdistan Regional Government, which controls oil-rich northern Iraq.

Baghdad blacklisted some international oil companies that have engaged the KRG.

Victoria Nuland, a spokeswoman for the U.S. State Department, said U.S. energy companies working in Iraq were advised of the political situation.

"We continue to tell them that signing contracts for oil exploration or production with any region of Iraq without approval from the federal Iraqi authorities exposes them to potential legal risk," she said.

Iraq lacks federal legislation governing the oil sector. Nuland said risks would remain until a comprehensive political decision on oil is made.

The KRG in April halted oil exports because it said Baghdad wasn't paying energy companies working in the Kurdish north. Exports were resumed in early August as a "goodwill initiative" that the Kurdish government said should encourage Baghdad to make good on "all the outstanding payments due."

Like Us on Facebook for more stories from UPI.com  
Related UPI Stories
Latest Headlines
Top Stories
Compact cannon for British armored vehicles
Ford recalls 432,000 North American vehicles over software bug
Aetna to acquire Humana for $37 billion in cash, stocks
New Zealand military receives medium heavy military trucks
BBC to lay off 1,000 people to make up for $234M in lost revenue