Iraqi Kurdistan PM says oil contracts legal

DUBAI Sun Oct 14, 2007 9:15pm BST

DUBAI Oct 14 (Reuters) - The government of Iraqi Kurdistan has reiterated that the oil deals it has signed with foreign companies this year are legal and said most of the returns would be shared with the rest of Iraq.

Nechirvan Barzani, Prime Minister of the Kurdistan Regional Government, told Al Jazeera that he had waited a long time for Baghdad to pass a long-awaited law organising the country's oil sector, but the regional government decided to move ahead with its own legislation following lengthy delays.

"We waited a lot for Baghdad but there was a lot of pressure on us and on me personally to pass a law .... yet there was no response from Baghdad," he said in an interview aired on Sunday.

"Everything was meant to come from Baghdad but by May or June nothing had happened so we presented a law and ... it was passed unanimously by the Kurdish parliament."

Iraq's central government agreed on a draft oil law early this year, under which control and revenue from Iraq's oil reserves are to be shared among Baghdad and Iraq's provinces, but the law has since been stalled by political infighting.

The draft has yet to be approved by the national parliament in Baghdad and Barzani said amendments had since been made which the Kurds had not agreed to, and it was not clear what the law in its current form contained.

Frustrated by delays, the Kurdish Regional Government approved its own oil law in August and said last month it had signed a production-sharing contract with a unit of U.S.-based Hunt Oil Co and with Impulse Energy Corp. It has signed eight contracts so far and expects to sign two more soon.

Barzani said the contracts were in line with Iraq's constitution, which allows provinces substantial control of natural resources, and with the revenue-sharing provisions of the draft oil law.

"If we are convinced that the Iraqi constitution is federal ... then what we did is according to the constitution, no more no less," he said in an interview that was dubbed into Arabic.

"Under these contracts, we get 17 percent of all sales of oil produced from our land and the rest will be distributed among all the other Iraqi regions. So if we are sharing all this with Iraq and not saying it is all ours, what is all the fuss about? There are some who just want to keep everything in Baghdad's control."

But Iraq's Oil Minister Hussain al-Shahristani has repeatedly said the contracts were illegal and complained about a lack of transparency by the Kurdish authorities.

He said crude from the deals could not be legally exported because the draft law states that only Iraq's State Oil Marketing Organisation holds the right to export oil.

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