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.
Iraqi Prime Minister Nouri al-Maliki talks with Barham Salih, who is now the Prime Minster of the Kurdistan Regional Government, during a national assembly meeting in 2006. The KRG publicly criticized Maliki's new draft oil law. (CEERWAN AZIZ/Reuters)

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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