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US says Oil Firms should respect Baghdad government

2012-08-25

WASHINGTON (AFP)--The U.S. said Monday that oil companies shouldn't bypass Iraq's central government after authorities in the autonomous Kurdish north signed dozens of deals with foreign energy firms.

"With regard to our own companies, we continue to tell them that signing contracts for oil exploration or production with any region of Iraq without approval from the federal Iraqi authorities exposes them to potential legal risk," State Department spokeswoman Victoria Nuland told reporters.

The U.S. has told companies that "obviously they'll make their own business decisions, but unless and until we have federal legislation in Iraq governing these things--something that we've been urging--that there are risks for them," she said.

Companies including Chevron and ExxonMobil from the U.S., France's Total and Russia's Gazprom have signed deals with Kurdistan, whose relations with Baghdad have deteriorated due to oil contracts and other disputes.

The central government insists that all contracts are illegal if they didn't go through the federal oil ministry.

Earlier this month, Iraq gave Total an ultimatum to end dealings with the Kurdish region or sell its stake in a giant southern oilfield.