Sonoro’s long-shot oil deal sunk in political quagmire

TIKRIT - When Canada's Sonoro Energy signed an asphalt and heavy oil exploration contract directly with Salahaddin province, in October 2010, it was seeking to blaze a bold new trail in Iraq – becoming the first international oil company outside of Kurdistan to sidestep centralized control over Iraq's oil sector.

Now, however, that deal may be falling victim to the legal and regulatory ambiguities that Sonoro had hoped to exploit. The Iraqi Oil Ministry has advised Salahaddin leaders that drilling for any class of hydrocarbons can be done legally only with the approval of the central government – an edict that appears to have persuaded provincial authorities to scuttle the contract.