Kurdish PM fears more delay in draft Iraq oil law

Mon Dec 12, 2011 2:56pm GMT

Quotes

   

* Barham Salih says Iraq oil minister's stance may delay bill

* Oil minister has warned Kurds on oil contract approach

* Salih meets French investors, Total present

By John Irish

PARIS, Dec 12 (Reuters) - The prime minister of Iraq's semi-autonomous Kurdish region expressed concerns about what he said were "contradictory" remarks by the central government's oil minister, which could delay a draft hydrocarbons law for the OPEC producer.

Adoption of a new oil and gas law has long been considered critical to the success of Iraq's rapidly developing oil sector, although Baghdad has signed multibillion-dollar contracts with global oil majors despite antiquated legal safeguards.

Iraqi Prime Minister Nuri al-Maliki and Prime Minister Barham Salih of the Kurdistan Regional Government agreed during talks in Baghdad in October that by Dec. 31, they would either amend a 2007 hydrocarbons law as agreed by all political factions or adopt the 2007 law as is.

"I have a firm commitment from PM Maliki to send the law to parliament by year-end," Salih told Reuters after meeting potential French investors in Paris on Monday.

"However, I have heard some contradictory remarks from the oil minister recently," the 51-year old official said, adding the oil minister had been privy to the accord between himself and Maliki.

In an interview on Friday, Oil Minister Abdul-Kareem Luaibi said Kurdish authorities had to decide whether they wanted to be part of Iraq or whether they had opted to be an independent state.

"It is not acceptable - and I'm talking here as an Iraqi citizen not as oil minister - that the Kurds sign contracts that award every single inch of the Kurdistan region of Iraq, without the participation of the inhabitants of the 15 other provinces in the decision," Luaibi told the Iraqi Oil Forum.

When pressed on whether he thought the draft law would be presented as agreed, Salih said the nature of Iraqi politics made it impossible to foresee but that, "It was time to move on", so that Iraq could develop its oil wealth and boost its revenues

"I cannot say we have managed to resolve these issues, but I believe it is in the interest of the country as a whole that we act together," the prime minister said.

Kurdish officials have repeatedly criticised a draft law approved by Iraq's cabinet in August, which would have given the Arab-dominated central government in Baghdad more control over the nation's oil reserves, the world's fourth largest.

FRENCH INTEREST, OIL FIRM TOTAL IN WINGS

Salih, Iraq's deputy prime minister until 2009, spoke during his first official trip to Paris to meet French officials and company executives in an effort to drum up interest.

Only 11 French firms including cement producer Lafarge , water group Veolia and food group Danone operate in the region.

Oil major Total, which currently only participates in Iraq's Hallfaya field, was among the 80 firms represented at the meeting of the French business federation Medef.

Its Iraqi managing director chaired a special round table with Kurdish oil officials on the scope and needs of hydrocarbon projects in the region.

Salih declined to comment on whether there were talks with Total or whether the firm had shown any interest in exploration agreements. Total could not immediately be reached for comment.

Exxon became the first oil major to move into the northern Kurdish region in mid-October when the U.S. company signed with the Kurdistan Regional Government for six exploration blocks. The KRG is locked in a feud with the central government in Baghdad over territory and oil rights.

The Iraqi oil ministry has said the deal is illegal.

Salih declined to comment on that deal, but a promotional video from the KRG shown to investors hailed the accord despite Baghdad's reservations.

"The stated centralised system of managing and commanding our economy in Iraq has proven to be a failure, and the success of Kurdistan as a viable economic model shows how to move beyond the stagnation in Iraq's economy," Salih said. (editing by Jane Baird)