U.S. warns oil majors of risks in Iraq

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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."