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Kurd gas deal with German firm illegal says iraq

Bahgdad, August 29, 2010

Iraq's oil ministry said on Sunday the agreement Germany's RWE signed with the Kurdish Regional Government, which included possible future gas supply for the Nabucco pipeline project, is illegal.

"The export of crude oil, gas and their derivatives are exclusively under the authority of the Oil Ministry of the central government in Baghdad and State Oil Marketing Organisation (SOMO)," oil ministry spokesman Asim Jihad said, reading a statement from the ministry.

"Any contracts signed outside of that legal framework are considered void and illegal."    

On Friday, Germany's RWE said it had signed a gas cooperation agreement with Iraq's Kurdish regional government. The deal envisaged RWE helping develop and design domestic and export gas transport infrastructure and create a route to market for Iraqi Kurdistan's gas.

The RWE statement quoted Iraqi Kurdistan's natural resources minister Ashti Hawrami as saying that up to 20 billion cubic metres of gas a year could be fed into the Nabucco pipe to bring gas to Turkey and Europe.

The Nabucco project aims to transport up to 31 billion cubic metres of gas a year from the Caspian region to reduce Europe's dependence on Russia, which supplies Western Europe with about a quarter of its natural gas.

Iraq needs to develop its gas sector and open it to foreign investment.
 But unilateral oil and gas deals negotiated by the Kurdish authorities are opposed by the Arab-led government in Baghdad in a long-running row over energy resources and revenue sharing.   

Baghdad's opposition to oil deals the semi-autonomous Kurds have signed independently with foreign firms has halted oil exports from Kurdish oilfields.
   
Exporting gas is also controversial in Iraq due to inadequate public electricity supplies 7-1/2 years after the US-led invasion.

The oil ministry has pledged that domestic gas needs will first have to be covered, in particular the future needs of gas turbine powered electricity plants, before any gas is exported. - Reuters




Tags: Iraq | RWE | Kurdistan | gas deal | Nabucco |

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