Baghdad has warned Gazprom, Russian energy giant to either cancel its energy contracts in Iraq’s autonomous Kurdistan Regional Government (KRG) region or stop its work with the central government, a spokesman said on Nov. 9.
The ultimatum is the most recent news in an long-running argument between the KRG in the north and the central government of Iraq, which considers any contracts signed with the Kurdistan Regional Government (KRG) as illegal and has told companies they must choose between work in the northern three-province region and the rest of Iraq.
One day before the news an Iraqi official confirmed U.S. firm ExxonMobil. ExxonMobil was also served a similar threat before.ExxonMobil had informed the federal Oil Ministry that it was looking to sell its share in a massive oilfield in south Iraq, indicating it was opting for contracts with the KRG instead.
Faisal Abdullah, a spokesman of Iraq’s deputy prime ministerHussein Shahristani who is responsible for energy affairs said, “We told Gazprom to give their response to the Iraqi government – to cancel their contract with Kurdistan or leave Badra”.
According to him the message had been sent by Iraq on Nov. 1.
“The contract [with the KRG] is not legal,” Abdullah said. “This situation will be the same for all companies who work in Iraq, because any energy contract should be approved by the Cabinet and the Ministry of Oil.” A Gazprom-led consortium won the contract in a public auction to work on the Badra oil field in December 2009.
In August 2009, Gazprom also signed two production and exploration deals with the KRG.
It is affecting the political relation between Turkey and central government, which seems to be reflected in energy contract between the two. Iraq forced to leave Turkey’s state-controlled TPAO from an exploration deal in the south of the country, an oil ministry official said on Nov. 7. However, Turkish Energy Minister TanerYıldız confirmed on Nov. 9 that energy ties between the two countries would continue.
Baghdad is not happy about Turkey’s oil purchases directly from the KRG.
While facing problems with its traditional partners, Baghdad is in trouble to develop its energy fields. Iraq’sits investment chief said in an interview that they needs up to $1 trillion (784 billion euros) over the next 10 years to rebuild its crumbling infrastructure and battered economy, on Nov. 8.
Sami al-Araji’s said during the Baghdad International Fair, Iraq’s biggest trade fair in more than 20 years, as the government inviting foreign investment, diversify the country’s oil-dependent economy and reduce unemployment.
Source: [Hurriyet Daily News]