Iraq warns Gazprom over Kurdish deals

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BAGHDAD, Nov. 12 (UPI) -- The Iraqi government said it considered unilateral deals between Russian energy company Gazprom and the Kurdish government to be illegal.

Gazprom in August acquired a stake in two oil blocks in the northern semiautonomous Kurdish provinces of Iraq. The Russia deal followed similar moves by French supermajor Total and Exxon Mobil.

Faisal Abdullah, spokesman for Iraqi Deputy Prime Minister Hussein Shahristani, was quoted by the BBC as saying Gazprom's contract with the Kurdistan Regional Government isn't legal.

"This situation will be the same for all companies who work in Iraq because any energy contract should be approved by Cabinet and the Ministry of Oil," he said.

Exxon was blacklisted by the central government for its action, though the U.S. oil company responded by announcing plans to dump assets in southern oil fields governed by Baghdad instead.

Gazprom in 2011 said it expected to reach a target level of 15,000 barrels of oil per day from the northern Badra field by next year. The field is operated by Turkish, South Korean and Malaysian oil companies.

Stuart Bowen, the U.S. special inspector general for Iraq reconstruction, said in his quarterly report in October that there was progress in settling issues surrounding oil exports and national hydrocarbon laws in Iraq.

"Notwithstanding this progress, relations between the KRG and Baghdad remain tense," his report stated.