Iraq Energy Roundup

Turkey, Iraq sign energy deals

The Iraqi Oil Ministry signed a last-minute deal with Turkish officials following a visit by Turkish Prime Minister Recep Tayyip Erdogan to Baghdad.

The ministry gave the Turkish Petroleum Corp., TPAO, permission to move on oil exploration and business ventures. Both parties signed declarations to establish a working relationship in the energy sector by creating joint ventures between Iraqi and Turkish companies, The Turkish Daily News reported.

Negotiations between the two countries focused on potential upgrades to the Kirkuk-Yumurtalik oil pipeline, linking Iraqi oil fields to the Turkish port city of Ceyhan and possible new endeavors to construct a network of pipelines linking Iraqi natural resources to international markets.

TPAO is ineligible to participate in oil tenders with Iraq unless it takes part in an international consortium, a notion discussed between top officials from both countries.

"The TPAO says if we are given a fruitful field, we can manage 1 million barrels of oil drilling. But whether the Iraqis will authorize a fruitful field is not an issue, because the TPAO can work with an international consortium," Erdogan said.

KRG oil contracts legal, lawmaker says

A Kurdish lawmaker in the Iraqi Parliament said he did not refer to oil contracts signed by the Kurdistan Regional Government as illegal documents.

Mahmoud Othman with the Kurdistani Alliance in the Iraqi Parliament was cited in the Iraqi newspaper Azzaman as saying contracts signed by the KRG were illegal in the absence of a federal hydrocarbon law.

Othman, in a news release issued by the KRG, requested the regional government to release a statement saying he was misquoted by the media.

"I specifically stated that I believed these proposed Oil Ministry contracts lacked solid legal and constitutional foundations, because a federal oil and gas law has yet to be passed by the Federal Parliament," the KRG said on his behalf.

Othman further clarified his position, saying the contracts signed by the KRG are "solid and unimpeachable" because they conform to regional laws. He also said Iraqi natural resources are "not the exclusive expressed right of the federal government."

"I believe that the contracts entered into by the KRG are fully legal and constitutional," he concluded.

Levin "concerned" over Iraqi oil contracts

U.S. policy regarding oil deals made in Iraq while the government there lacks hydrocarbon legislation is ambiguous, said Sen. Carl Levin, D.-Mich.

Levin, who serves as chairman of the Senate Armed Services Committee, said in a floor speech on oil contracts in Iraq that he was "deeply concerned" by inconsistent policy toward the contracts and that this may be a destabilizing factor in Iraqi reconciliation.

"Continued failure by the Iraqi government to pass national hydrocarbon legislation, a political benchmark set by the Iraqis for themselves, risks fracturing the country and jeopardizing hard-fought gains," he said.

The senator supported his concerns by pointing to a deal made between Hunt Oil, a Texas firm, and the Kurdistan Regional Government last September and several other recent deals that officials in Baghdad say are "illegal."

He also expressed concern over the revelation that Hunt Oil representatives met with State Department officials prior to the KRG contracts, despite U.S. policy statements discouraging agreements between private firms and regional governments in Iraq.

"I am concerned that if a policy discouraging contracts with regional governments was in place prior to the signing of Hunt Oil's contract with the KRG, that it was not adequately understood," Levin said.

Levin also expressed broader concerns over reports saying U.S. State Department officials advised the Iraqi government on drafting technical service contracts with Western oil firms.

"I am concerned by the administration's silence on these contracts and the message our reported involvement in drafting the no-bid technical service contracts sends to the Iraqi government about the importance of passing national hydrocarbon legislation," he said.

U.S. policy on Iraqi oil deals is "ambiguous"

Bob Schaffer, Republican Senate candidate from Colorado, denied allegations he, with his former employer Aspect Energy, was negligent with Kurdish oil deals.

Schaffer, as vice president of Aspect Energy in 2007, steered the firm toward oil deals with the Kurdistan Regional Government, an arrangement the U.S. State Department says ran counter to U.S. and Iraqi interests.

Schaffer said this week the oil deals had no impact on security in the region and in fact boosted Kurdish and U.S. interests, the Denver Post said.

"In the broader picture, it ought to be the highest priority of America's diplomatic policy to (encourage) private investment in the Iraqi economy. Asking the Kurds or anyone else to be poor longer is ludicrous," he said.

Schaffer said he learned of the concerns by top State Department officials indirectly and defended his actions by claiming official policy at the time was "ambiguous."

Democratic critics counter that the move by Schaffer weakened U.S. objectives in the region because he backed the U.S. incursion into Iraq but later dealt with Kurdish officials while tensions were high among regional representatives and Iraqi officials in Baghdad.

Schaffer, however, says the policy during 2006 was lenient enough to allow the deal, an allegation backed by an investigation by U.S. lawmakers into deals made by the Texas-based Hunt Oil.

A House oversight committee is examining deals made between Hunt Oil and Kurdish officials while its chief executive, Ray Hunt, served as an adviser to U.S. President Bush.

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(e-mail: energy@upi.com)