Iraq-KRG oil row, Baghdad talks continue

WASHINGTON, Dec. 18 (UPI) -- Iraqi Kurdish oil contracts are unconstitutional, the Iraq government spokesman said, as both sides meet in Baghdad over oil disputes and other issues.

"We stand on the same situation that all the oil contracts need to be approved by the central government," Ali al-Dabbagh, speaking by phone from Baghdad, told United Press International. "Without such approval it is not operative."

A delegation from Iraq's semiautonomous Kurdistan Regional Government have been in Baghdad discussing the controversial oil deals signed by the KRG, as well as issues surrounding the KRG's budget and security forces, and a timeline for a contentious referendum on the fate of the oil city of Kirkuk.

The KRG, which has little proven oil reserves but geological formations suggesting oil wealth, has passed its own regional oil law in August and signed more than 20 contracts with foreign oil firms. It blames the national government for stalling a draft oil law.

The national government counters the same and has called the deals illegal.

"Unless the central government knows details about this contract and the initiative should come from the central government," Dabbagh said, "and approval as well, in order to be workable and acceptable by the central government."

The KRG hasn't signed any new deals in recent weeks, but work is progressing in the exploration blocks it has signed production-sharing contracts for, which Dabbagh said "is not a constitutional step."

The central government, which relies on the Kurdistan Alliance in Baghdad to maintain a governing coalition, has mostly stayed away from addressing the looming oil deals confrontation.

Now, however, the KRG prime minister, oil minister and finance ministers are meeting with their counterparts in the national government, as well as the national defense minister, to iron out differences.

Meetings continue "in order to find out a settlement to this dispute," Dabbagh said, though no deals have been reached yet.

"We treat this dispute as usual," he said, "because we are at the early stage of federalism in Iraq and we do need to define the power and the authorities of the regional and central governments."

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Ben Lando, UPI Energy Editor

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(e-mail: blando@upi.com)