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Any Total deal with KRG illegal: Iraq deputy PM

02 april 2012, 15:42
Iraqi Oil Minister Hussein al-Shahristani. ©AFP
Iraqi Oil Minister Hussein al-Shahristani. ©AFP
Iraqi Deputy Prime Minister for energy affairs Hussein al-Shahristani warned Total on Sunday that any deal the French energy giant signs with Iraq's autonomous Kurdish region would be illegal, AFP reports.

Shahristani's remarks in an interview with AFP came around two weeks after Total chief executive Christophe de Margerie said his firm was in talks over potential deals with the three-province Kurdistan region in Iraq's north.

Baghdad regards any contracts signed by Kurdistan which are not approved by the central government's oil ministry as invalid.

"The minister of oil, or the ministry, have informed Total in very clear terms that they will be treated in exactly the same way as all the other companies ... have been treated," said Shahristani, a former oil minister.

"That is, if they sign a contract to develop a field in Iraq, in any part of the country, without the approval of the Iraqi government, they will be considered in breach of the Iraqi laws, and they will be treated accordingly."

Total is part of a consortium along with China's CNPC and Malaysia's Petronas seeking to ramp up output at the Halfaya field in Iraq's southern Maysan province, which has proven reserves of about 4.1 billion barrels.

Baghdad awarded the contract in December 2009.

The Kurdistan region has signed around 40 contracts with foreign firms on a production-sharing basis without seeking the express approval of the central government's oil ministry.

The federal oil ministry, meanwhile, has awarded energy contracts to international companies on the basis of a per-barrel service fee, and has refused to sign deals with any firm that has agreed to a contract with Kurdistan.

That dispute was highlighted by a row over a contract signed last October by US energy firm ExxonMobil with Kurdistan.

The oil ministry in Baghdad claims ExxonMobil has said in a letter that it has "frozen" the deal, but the Kurdish regional government has denied that.

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