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Iraqi Kurds push for oil deal recognition

Iraq's Kurds pushed the government to recognize oil deals made with international companies as they seek more control over the resource in their region

AP, Tuesday 28 Dec 2010
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Iraq's Kurds pushed the central government on Tuesday to recognize oil contracts they signed with international companies by insisting the self-ruled region will not resume exports until Baghdad recognizes the deals.

The insistence from the Kurds could foil Iraq's ambitious plans to raise daily oil exports to 2.25 million barrels in 2011 from the current 1.9 million. Oil revenues account for nearly 95 percent of Iraq's budget as the energy-rich nation tries to rebuilt the country after decades of wars and international sanctions.

The Kurds have sought greater control over oil in their crude-rich region while Baghdad has argued that oil is a national resource, under the central government's control.

Ali Hussein Balo, an adviser to the Kurdish Ministry of Natural Resources said the crude-rich region can export 150,000 barrels a day.

In an interview with The Associated Press, Balo said the Kurds will only start exporting if all "our deals are recognized officially in a signed paper by Baghdad." Iraqi Kurds have signed more than two dozens production sharing agreements with international companies that are deemed illegal by Baghdad.

"Baghdad wants everything free of charge," Balo said by phone from Irbil, the capital of the Kurdish autonomous region in northern Iraq.

"We can't do that since we are committed to the companies to have a share in the produced oil," he said.

Exports from the north were halted a few months after they started in June 2009 amid a disagreement over payments.

Iraq's new oil minister, Abdul-Karim Elaibi, last week declared the dispute over how private companies accounted for equipment costs and other expenses for reimbursement has been settled, clearing the way for the exports to resume soon.

Elaibi said Baghdad would receive all the oil produced for export and would pay only the costs incurred by the developers.

After the 2003 U.S.-led invasion that toppled Saddam Hussein regime, the Kurds started to award production-sharing contracts upon which the companies are entitled to a share in the oil extracted.

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