Foreign Policy Blogs

Ave Erbil-ia! Recognition of Oil Contracts makes for a Merry Xmas in Kurdistan!

On Saturday, Iraq’s new oil minister, Abdul Kareem Luaibi, announced that Iraq will recognize an array of oil deals signed by the Kurds in northern Iraq.

Ave Erbil-ia! Recognition of Oil Contracts makes for a Merry Xmas in Kurdistan!Luaibi, who has been at the head of negotiations with the Kurdistan Regional Government also said in his statement that dialog “with our Kurdish brothers will continue in order to reach a resolution that is in the general interest.” The 2011 Iraqi budget anticipate that oil exports of 2.25 million b/d will include some 150,000 b/d of crude oil exports from Kurdistan. However the resumption of exports is dependent on an agreement between Baghdad and Erbil over payment to foreign contractors operating in the Kurdish province under production sharing agreements. Kurds are optimistic that Luaibi will be able to to resolve the deadlock over the resumption of oil exports from the semi-autonomous province.

Within Iraq, the tension with Kurdistan has built on the production and exploration contracts the regional government has signed with international oil conglomerates. These agreements have been rejected by the newly appointed Minister of Energy, Hussain al-Shahristani, as unconstitutional.

The dispute forestalled exportation from Kurdish oilfields, although both Shahristani and Kurdistan Regional Government Minister for Natural Resources Ashti Hawrami have both said exports could resume sometime after the first of the year.

Although Shahristani retains overall control of the energy ministry, there is optimism that his deputy Luaibi might heal Baghdad’s fractious relationship with Kurdistan.

That Baghdad will has stated that it will recognise international contracts that the Kurdish north has signed with foreign oil companies gives should make for a merry Christmas in Erbil.



Reid Smith

Reid Smith has worked as a research associate specializing on U.S. policy in the Middle East and as a political speechwriter. He is currently a doctoral student and graduate associate with the University of Delaware's Department of Political Science and International Relations. He blogs and writes for The American Spectator.