Iraqi Kurdish PM says: Will not annul Oil Deals

ARBIL, Iraq (Reuters)

The prime minister of Iraqi Kurdistan on Saturday rejected calls from Iraq's central government to scrap disputed oil contracts with foreign firms, calling those who proposed such annulments "dreamers".

Nechirvan Barzani arrived back in the largely autonomous region on Thursday after several days of talks with Baghdad that were partly aimed at resolving a dispute over a draft oil law. Those talks appeared to have yielded nothing but mutual promises to keep talking about the stalled bill.

Iraq's cabinet agreed a draft oil law in February last year, but it has failed to get through parliament partly because of rows between the Kurdistan Regional Government (KRG) and Baghdad over who will control oil reserves and contracts.

Among the disputes are deals the KRG signed with foreign energy firms on its own initiative. Baghdad has called them illegal and will not recognise them.

"They are legal and constitutional contracts and they meet international standards," Barzani told journalists in the Kurdish city of Arbil. "No power in Baghdad can annul these contracts. Those who call for them to be annulled are dreamers."

Barzani brought to Baghdad what Kurdish officials had called new proposals to resolve disputes over the deadlocked national oil law, but no breakthroughs were made.

Barzani said both sides promised to continue talking through a new political committee.
"This committee will headed by (Prime Minister) Nuri al-Maliki," he said.

Iraq has the world's third largest oil reserves at around 115 billion barrels, although Deputy Prime Minister Barham Salih said in April reserves could be as much as 350 billion barrels.
In the absence of the oil law, Baghdad has been negotiating six short-term technical service contracts with foreign oil majors with the aim of lifting output at its largest producing fields by a combined 500,000 barrels a day.

Iraq's oil ministry has finished negotiations with the oil majors and hopes to sign the deals during the next month, the Oil Ministry said this week.

On Monday, Oil Minister Hussain al-Shahristani is expected to announce which large producing fields will be open for long-term development contracts, the officials added.

By Shamal Aqrawi