Analysis: Markets moved, but KRG-Baghdad deal not done

Prime Minister Nouri al-Maliki has reportedly agreed to support Kurdistan's oil contracts -- a significant step, but only one of many on the long path to reconciling a years-long dispute.
Analysis: Markets moved, but KRG-Baghdad deal not done
Prime Minister Nouri al-Maliki (R) talks with then-Deputy Prime Minister Barham Salih during a national assembly meeting in 2006. Maliki has reportedly agreed to accept oil contracts signed by the Kurdistan region, where Salih is now prime minister. (CEERWAN AZIZ-POOL/Getty Images)

BAGHDAD - After weekend news that Prime Minister Nouri al-Maliki now supports Kurdish oil contracts, investors reacted with exuberance. But in the years-long dispute between Baghdad and the semi-autonomous Kurdistan region, political rhetoric and hopeful speculation have often out-paced real progress toward reconciliation.

Norwegian oil company DNO's shares jumped after Agence France-Presse (AFP) reported that Maliki has agreed to all of the semi-autonomous Kurdistan region's production sharing agreements (PSA) with foreign oil companies. But as politicians start to walk back Maliki's quote, and with few details emerging, it appears the deal is not done.

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