* Oil minister says KRG objects to handing over oil
* Says KRG deals involves "fourth or fifth" level firms
BAGHDAD, March 25 Iraq's semi-autonomous Kurdish
region will not allow oil from its territory to be piped through
Iraq's national oil network, the country's oil minister said,
throwing into doubt exports from the area.
Hussain al-Shahristani said the Kurdish Regional Government
(KRG), which controls three provinces in Iraq's north, would
hold back oil because the companies it invited to develop oil in
its territory must be rewarded.
Shahristani has rejected deals signed by the KRG and foreign
oil firms, saying they were not put to tender to allow
competition and they give firms a share of the oil produced, a
deal structure the government in Baghdad rejects.
"Work is continuing to connect the (northern oilfields) to
the Iraqi network. But there are objections from the KRG to
handing over the oil, claiming that companies that developed the
oilfields should be rewarded," Shahristani said in an interview
published in Wednesday's pan-Arab Asharq al-Awsat newspaper.
The KRG could not immediately be reached for comment, but
his comments contradict those made late on Tuesday by Kurdish
Prime Minister Nechirvan Barzani, who told reporters, "If they
(in Baghdad) are ready to accept exporting, we are ready."
Several oil firms have deals with the KRG, and Norway's DNO
International (DNO.OL) is in the final stages of connecting its
Tawke field to the national oil network.
Shahristani's comments could mean exports are delayed.
In the interview, Shahristani goes on to say the deals
between the KRG and oil firms could be reviewed to comply with
central government standards, but adds that the firms involved
were "fourth or fifth" level companies.
Baghdad and the KRG have been haggling for years over a new
oil law that would govern revenue sharing, one of several
disputes between the two sides that also include a row over
control of the northern oil-rich city of Kirkuk.
Iraq, whose revenues are almost exclusively derived from its
vast oil reserves, desperately needs to rehabilitate its
dilapidated oil infrastructure and attract foreign investment.
"Shahristani's policy is a failure and was the reason for
the oil industry deterioration. He spent $8 billion to increase
Iraqi oil production but the result is production has
retreated," Barzani said on Tuesday.
Earlier this month, KRG Oil Minister Ashti Hawrami warned
foreign oil companies against signing deals with Baghdad on
fields in territory Kurds claim.
Baghdad has invited international oil companies to bid for
contracts on fields including some near the city of Kirkuk.
(Writing by Mohammed Abbas: Editing by James Jukwey)