Information and liaison bulletin - Institut kurde de Paris

Revue de Presse-Press Review-Berhevoka Çapê-Rivista Stampa-Dentro de la Prensa-Basin Ôzeti
November 27. 2007
By BEN LANDO, UPI Energy Editor
WASHINGTON, Nov. 27 (UPI) - Iraqi Kurdistan's oil
minister, Ashti Hawrami, begins his U.S. tour of political
and business leaders from Washington to Texas a hot item with
international oil companies, but with icy relations with his coun¬
terpart in Baghdad.
He has signed around 20 oil deals with international oil compa¬
nies, most after the national oil minister labeled them illegal.
Hawrami blames Baghdad for playing politics with a national oil
law, prompting the Kurdistan Regional Government to move
ahead with its own regional oil law in August.
Interview:
KRG minister on Iraq oil beef
And he simultaneously defends his oil deals as constitutional
while condemning Iraqi Oil Minister Hussain al-Shahristani's
plans to rely on the Saddam Hussein-era legal regime to sign its
own contracts.
"I tell the critics that rather than focus on these silly issues they
should be focusing on doing something positive for the Iraqi
people," Hawrami told United Press International in an interview.
Hawrami, joined by Qubad Talabani, son of Iraqi President Jalal
Talabani and the KRG's main man in Washington, as well as
another KRG-Washington staffer, was frank about his beef with
Baghdad, defending the KRG's strategy, and the future where he
would produce nearly half the amount of oil Iraq is pumping
today.
"You cannot blame people from getting frustrated when time and
time again the only thing Dr. Shahristani does is shout 'illegal'
for any achievement Kurdistan makes. That is not the way to
work. So when he puts people into corners, he should expect a
message back," he said, adding he hasn't met with Shahristani
since April.
"Sign some contracts, generate some revenue, remedy the wells
which are not producing, increase the production. That's what
we should be doing rather than saying, 'Oh, no, no, no you have
no right to do that' and leave it in the ground for the next gene¬
ration," he said. "These are empty gestures. They are unhelpful.
It appears that some in Baghdad basically want to have control
in their hands, for wrong reasons usually, to come back and fight
us again as before."
The KRG's motives may be rooted in the Saddam-era carnage,
but one need only look back two years, when Iraq's Constitution
took the vague route in order to secure passage. Now either side
of the debate -- be it over the draft oil law itself or signing oil
deals uses its own interpretation.
The KRG is accused of acting unilaterally, ignoring the overall
Iraqi oil strategy, which many experts say should focus on fixing
the current infrastructure instead of finding more oil to pump.
The status of the oil law is as murky as its contents. It was draf¬
ted by three technocrats more than a year ago, altered during
negotiations between Hawrami and Thamir Ghadhban, top ener¬
gy adviser to Iraq's prime minister and one of the three authors,
106
and altered some more after that.
It's a lightning rod because it could drastically alter two of the
only aspects from the past decades in Iraq that has wide support
in the country: a centrally controlled oil sector and one that has
strict limitations on foreign oil company participation.
Iraq's oil production has averaged about 2 million barrels per
day since 2003, though recent security improvements pushed it
to around 2.4 million bpd last month. As the oil sector has sta¬
gnated compared with its potential, so has the life of Iraqis suf¬
fering daily threats of death and decreasing quality of life.
Baghdad has been unable to stop it, let alone invest money into
the oil sector. The KRG was unwilling to wait.
It first signed oil deals in 2004, looking to explore its threeprovince
region that was cut from development by Saddam. Of
the 115 billion barrels of Iraq's proven oil reserves the largest
in the world after Saudi Arabia and Iran only 0.5 percent is
under KRG control.
Since Sept. 8, when it announced a controversial oil deal with
Dallas-based Hunt Oil, it has signed another 14 productionsharing
contracts with companies from around the world, inclu¬
ding India's Reliance, Austria's OMV, Hungary's MOL and Norbest,
an affiliate of BP's Russian arm, as well as some KRGowned
firms.
"We continue in our efforts," Hawrami said when asked if there
are any more on the horizon. "We are not in a rush signing them
off but if we have the right company competing appropriately to
serve our policy or targets then there is nothing to hold it up."
This week Iraq's Oil Ministry escalated its rhetoric. It first called
the deals "illegal" and threatened to blacklist any company
that signs with the KRG but has now said the deals are nulli¬
fied.
Just around the time of the Hunt deal, Shahristani announced he
would no longer wait for the national law either. Last week he
told UPI he is in discussions with oil companies over technical
service agreements to enhance Iraq's largest producing fields.
"I encourage him to sign agreements; I have no problem with
that. He should be relying on the constitution, that's a far stron¬
ger message to international oil companies," Hawrami said.
"Saddam's laws if they contradict the constitution, which most of
them do, are null and void," he said, "So you cannot rely on
Saddam's laws but you can rely on the constitution and you can
rely on the future oil and gas law when it is passed. That is the
way to forge ahead with our development and future negotia¬
tions."
Hawrami said the two 2004 deals, one with Norway's DNO and
the other with a venture between Turkey's Genel Enerji and
Canada's Addax Petroleum, will help the KRG produce 200,000
bpd within two years and 1 million bpd in five years.