Iraq deems oil contracts with KRG illegal
The statement comes a day after Russia's state-controlled Rosneft announced the signing of production sharing agreements with the Kurdistan Regional Government (KRG) for five blocks in the Kurdistan region. The KRG announced earlier this year it planned to attract additional funding to its upstream sector by offering 20 recently redrawn exploration blocks.
Iraq's oil ministry has always considered oil and gas agreements between the KRG and foreign operators illegal. ExxonMobil in 2011 arranged an exploration deal with the Kurdistan Regional Government without the approval of Iraq's central government, prompting Baghdad to retaliate by banning ExxonMobil from participating in any other upstream projects in the federally-controlled Iraqi oil and gas industry. ExxonMobil retains presence in Iraq, as the operator at Iraq's West Qurna 1 field.
But the boundaries appear to have been blurred in recent years, with KRG-market crude finding regular buyers in the Mediterranean and northwest European markets. And earlier this year, oil minister Jabbar al-Luaibi said there was investment interest in southern Iraq from Chevron, which operates in Iraq's semi-autonomous Kurdish region.
But Iraq is now stepping up control over Iraq's northern oil assets. Federal Iraqi forces retook the Kirkuk territory this week, including oilfields and infrastructure that were previously controlled by the Kurdistan Regional Government (KRG).