Kurds defend key oil policy, reject BP deal
Baghdad, January 19, 2013
Iraq's Kurdistan has defended its oil policy as constitutional, and rejected a deal between Baghdad and BP for an oilfield in the disputed city of Kirkuk as an "illegal" step in the autonomous region's feud with the central government.
The statement came after Iraq's oil minister said Baghdad's government would sue companies exporting crude from Kurdistan, warned of cuts to the self-ruled region's federal budget and announced an accord with BP in Kirkuk.
Iraq's central government and Kurdistan Regional Government or KRG, run by ethnic Kurds, are locked in a widening dispute over control of oil revenues, oilfields and territory that is fraying the country's uneasy federal union.
The ethnically mixed city of Kirkuk, sitting on the internal border between Iraq and Kurdistan, is at the heart of their long-running battle over constitutional rights to the Opec member's crude reserves.
"Iraq's citizens are simply tired of this sort of language of threat and intimidation, which in the cynical pursuit of narrow political agendas serves only to create division and strife," the KRG said in a statement.
"In terms of oil and gas management, the KRG firmly believes in, and abides by, the letter and spirit of Iraq's permanent, federal constitution."
Oil minister Abdul Kareem Luaibi said Baghdad intends to sue Genel Energy - the first company to export oil directly from Kurdistan - and may slash the government's allocated 17 per cent budget to the region unless it halts what he rejected as smuggling. Luaibi announced a preliminary agreement with BP to revive the northern Kirkuk oil field, which is suffering massive output declines.
"He reveals details of an illegal and unconstitutional plan to allegedly allow BP to enhance the recovery of some of the depleted fields in Kirkuk... without consulting and obtaining approval of the other parties to the dispute," the KRG said.-Reuters