Iraq Oil Report

A representative from Dallas-based Hunt Oil Corp. did talk with the U.S. State Department prior to signing a controversial oil deal with Iraq’s Kurdistan Regional Government, according to an internal department communication obtained by United Press International.Hunt Oil, whose chief executive officer is connected to the Bush administration by campaign donations and a seat on an intelligence advisory board, had previously denied the meeting. …

On Sept. 5, according to the State Department communication transmitted Sept. 6, the Hunt official in charge of the region met in Irbil, the KRG capital, with officials from the U.S. Agency for International Development.

“Hunt is expecting to sign an exploration contract with the KRG,” the communication stated. …

When asked about the conflicting statements, Jeanne Phillips, Hunt senior vice president for corporate affairs and international relations, confirmed the Sept. 5 meeting and a Hunt delegation led by David McDonald, Hunt general manager for Europe, Africa and the Middle East.

Read the entire story for UPI here.

Iraq Oil Report was passed along this translated copy of a letter sent to Iraq Oil Minister Hussain al-Shahristani by 11 Iraqi technocrats. Most, if not all, have criticized the incarnation of the draft oil law. They take issue, however, now with the KRG’s oil deals. The letter is below in full.

Attention: Dr. Hussain Shahristani
Minister of Oil
We, the undersigned, Iraqi oil professionals who have previously expressed concern and reservation with regard to the proposed draft oil law, would like to express our endorsement for your stance with regard to the contracts signed by the Kurdistan Regional Government and to consider them as illegal and that any foreign company who signs such deal, as well as their sub-contractors, be subject to legal consequences including blacklisting and deprived from further business in Iraq.
We are sure that many other colleges will be willing to support this message but we thought of expediting this message in view of the campaign that is being staged currently by the KRG.

Yours,
Issam al-Chalabi
Tariq Shafiq
Farouk al-Kassim
Fadhil Chalabi
Mohammed al-Jibouri
Karrim al-Shamma
Dhia al-Bakka
Noori Al-Al-Ani
Mohammed-Ali Zainy
Kamel Mhaidi
Falih al-Jiburi

Former Iraq Oil Minister Accuses KRG Of Licensing Oil Operations Outside Its Territory

Former Iraqi Oil Minister Issam Chalabi, in an interview published in the latest edition of Middle East Economic Survey (MEES), says a contract awarded by the Kurdistan Regional Government (KRG) to a US oil company relates to areas of northern Iraq outside KRG control. If confirmed, the development would suggest the KRG may have broader political ambitions for control of oil and gas in the disputed areas adjacent to its territory in northern Iraq.

According to ‘Amman-based former Iraqi oil minister Issam Chalabi, a production-sharing contract (PSC) signed with Hunt Oil of the US in early September will be the source of further friction between the Baghdad government and the Kurdish authorities. The government has already criticized the KRG for signing deals with international oil companies before the federal oil law has been approved.

The Hunt deal covers four structures in Blocks 6, 7 and 8 - Jabal Kand, Fajir, Nerjis and Ain-Sifni - in the Duhok area in the northwest of the KRG region.

According to Mr Chalabi, who held the Iraqi oil portfolio from 1987 to 1990, “the first three structures fall outside the jurisdiction of the KRG, in the Ninewa Governorate.”

He told MEES Hunt’s signing with the KRG for acreage outside the KRG’s three governorates of Dihok, Irbil and Sulaimaniyah would have negative implications from the legal as well as the political perspectives. “This will be considered a very serious matter from a political point of view between the central government and the KRG,” he said, adding that this was especially true since Hunt Oil is a US company.

Mr Chalabi said his suspicions about the Hunt agreement were raised because, in contrast to other awards made by the KRG, no information about the blocks concerned or their location was announced by the Kurdish authorities. Several attempts by MEES to get clarification from the KRG or Hunt Oil on the location of the structures failed to yield a response by press time.

If as is claimed the structures are outside the KRG jurisdiction, the issue is bound to inflame the Baghdad-KRG political relationship. Such a deal would imply the KRG is creating facts on the ground, prejudging any referendum on the status of disputed areas while exceeding its present geographical jurisdiction. Under the federal constitution, the referendum on the disputed areas around Kirkuk and elsewhere is due to take place by the end of 2007 but that deadline is now unlikely to be met.

But Mr Chalabi takes issue with the Kurds’ notion of disputed territory, saying there was “no such thing as ‘disputed areas’ as far as the Iraqis are concerned. They are disputed only from the perspective of the KRG.”
Speaking in general terms about the KRG’s contracts with international oil companies, Mr Chalabi said he supported the Iraqi government’s denouncement of the contracts as illegal.

“I think they are absolutely right, because even if you go to the Constitution it says in Article 111 that oil and gas are the property of all the Iraqi people. This means agreements ought to be signed by the only body that represents those Iraqi people, and in the absence of an oil law that gives particular authorization to anyone else, it must be only the central government that has the right to sign these contracts,” he said.

Instead, the former Iraqi minister said, the KRG went ahead and passed its own oil law without “the approval or consent - or even consultation with - the Ministry of Oil.”
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Republished with permission from Middle East Economic Survey

Georgia’s Sailors Protect Iraq Oil, writes Margaret Coker of Cox News Service.
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