HUNT OIL STRIKES TROUBLE IN KURDISTAN

Here we have a case of the infamous “unnamed State Department official” speaking the truth to oil. See also KURDS, HUNT OIL PARTNER IN DISS TO IRAQ GOV’T

But the unnamed official also said he expects an oil law to be passed this year – as Iraq nonetheless moves further toward a defacto federal system and regional autonomy.

The Kurds do not seem concerned with official US disapproval. They clearly want to establish enough autonomy to control their own oil but not so much as to draw Turkish antipathy.

Hunt Oil Deal with Kurdish Govt Creating Tension in Iraq
September 28, 2007 (AFX via RigZone)

WHO
Hunt Oil, Kurdistan Regional Government (KRG), unnamed US State Department official, Hussein al-Shahristani, Oil Minister, Iraq national government of Prime Minister al-Maliki;

A map of Iraq detailing the Kurdish region. Duhok is in the upper left. (click to enlarge)

WHAT
Despite the absence of a national oil law (see IRAQ OIL LAW: WAIT A MINUTE! and ALL POLITICS and TALABANI: IT AIN’T OVER YET), Hunt Oil signed an exploration deal with the KRG. It has aggravated regional tensions and may not necessarily turn out well for the oil company. On the other hand, Hunt Oil is known to be close supporters of President Bush.

WHEN
The KRG passed its own oil law in August, before it signed the Hunt deal.
Hunt hopes (hoped) to begin geological surveys by the end of 2007 and drilling in 2008.

WHERE
Hunt Oil is based in Dallas, Texas. It will begin exploration with a geological survey of the northwestern border province of Dahuk, near Turkey.

WHY
- The State Department had advised Hunt Oil not to make the deal with the KRG.
- Al-Shahristani has called the deal “illegal” because there is no governing law.
- The Hunt deal is the 1st new one signed by Iraq since 1990, before the 1st Gulf War over the invasion of Kuwait.
- A draft oil law was put through the al-Maliki government in July but final approval has been blocked.

Some things are worth fighting for, according to Alan Greenspan and Dick Cheney. (click to enlarge)

QUOTES
unnamed US State Department official: "We think that these contracts have needlessly elevated tensions between the KRG and the Iraqi government…Both parties share a common interest in the passage of a national law on hydrocarbons and energy sharing. We are pushing all parties to negotiate in good faith and knock off the things that will undermine national unity…We advise companies that they could incur significant political and legal risk by signing contracts with any party before the national law is passed…"