http://www.neurope.eu/articles/80512.phpForeign oil companies jockeying for position in Northern Iraq are taking a great risk signing contracts with Iraq's Kurdish Regional Government (KRG), given Turkey’s ongoing conflict with the Kurdish rebels and Iraqi Oil Minister Hussein al-Shahristani’s threats to cancel the deals as long as the oil bill is not passed.
"It’s a very dangerous situation. The oil law is not fully implemented because some factions in the government do not see eye to eye and any oil company that tries to sign a contract with any of these regional governments would be really putting itself in a penalty box," Fadel Gheit, an analyst at Oppenheimer & Co. in New York told New Europe.
The Iraqi oil minister, backed by the Iraqi cabinet and the prime minister, is saying that these contracts are illegal; however, the Kurdish leaders are going on with them. "The Kurdish government wants to go on with these contracts in order to bolster their financial situation as a viable independent state in the future so it is all politics behind it," Muhammad-Ali Zainy, former chief engineer and manager in Iraq's Ministry of Oil, now with the Centre for Global Energy Studies in London, told New Europe.
"There must be some kind of a settlement through the Iraqi government because the Kurdish region is landlocked and they cannot really transport their oil across Iran or Turkey or Syria so it has to go through Iraq," Zainy said.
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