Iraq warned on Thursday that foreign oil companies which signed deals with the autonomous Kurdish regional government will be barred from doing business in the country and from exporting oil.
"Any company that has signed contracts without the approval of the federal authority of Iraq will not have any chance of working with the government of Iraq," Oil Minister Hussein Shahristani said. "We warned the companies that there will be consequences... that Iraq will not allow its oil to be exported," Shahristani told reporters on the sidelines of Opec meetings in the Saudi capital Riyadh.
Last week, the Kurdish authorities signed seven production-sharing contracts with a number of foreign oil companies in defiance of the Iraqi central government and before approving a controversial federal oil law. The latest contracts bring to 15 the number of deals finalised by the Kurdish regional government since it passed its own oil law in August.
The regional administration said 85 percent of the returns from the foreign deals would be for Iraq and the rest would go to the contractor. The Kurdish government's minister for natural resources, Ashti Hawrami, said last week that with the signing of the latest contracts, 20 international oil companies are now working in the region.
He said talks were ongoing with foreign firms over 24 new oil blocks in the oil-rich north and that announcements would be made soon. But Shahristani warned that foreign firms which sign contracts with the Kurds risk being blacklisted by Iraq.
"Our position is that any company that signs a contract without the approval of the federal authority will compromise their chances of getting business in future in Iraq," he said. The bill opens up the long state-dominated oil and gas sector to foreign investment and assures that receipts will be shared equally between Iraq's 18 provinces, a measure Washington regards as key to unite the rival communities.
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