Iraqi Kurds Urge US Neutrality in Oil Dispute

Iraq's northern Kurdish region is pressing the Obama administration to remain neutral in a sensitive dispute with the Iraqi central government over whether it can export oil and gas without Baghdad's approval.

The Kurdish Regional Government's Energy Minister Ashti Hawrami was meeting with Obama administration officials Friday following recent talks with Turkey about completing pipelines over Baghdad's objections that could vastly expand the Kurds' ability to directly sell its oil and gas.

The U.S. opposition to the Kurds' energy deals has put it at odds with its NATO ally Turkey amid concerns that the dispute over dividing Iraq's immense energy wealth could threaten Iraq's stability.

Turkey, which is eager to expand its energy supply, backs the Kurds' position that the Iraqi constitution gives its regions some power to sign oil and gas deals independently. The U.S. says the deals need federal approval.

In an interview ahead of the meetings in Washington, Hawrami said that he hoped that the Obama administration would avoid taking sides.

"Our advice to them has always been to not get involved with interpretation of the constitution," he said.

Baghdad and the Kurds have been at loggerheads for years over rights to develop Kurdistan's oil wealth, but tensions have been on the rise in recent months. The Kurds, who have their own armed forces, have signed dozens of deals with foreign oil companies since the 2003 U.S.-led invasion.

The tensions have spiked recently over the talks with Ankara about completing a pipeline to Turkey. With growing energy needs, Turkey has backed the Kurdish position. It has also grown closer to the KRG, seeing it as an important partner in its bid to strike a peace deal with rebels in its own Kurdish region.

Hawrami said that work to convert one pipeline to Turkey intended for natural gas into an oil pipeline could be completed within months, though Turkey would still need to build capacity to move the oil to its own markets before it could be used.

The Kurds have also begun trucking smaller quantities of oil into Turkey, prompting allegations of smuggling and threats of lawsuits from Baghdad.

The central government believes it has the exclusive constitutional right to manage the country's oil policy and wants all exports to travel through state-run pipelines. Hawrami argues that the constitution provides the KRG the power to strike its own deals, particularly those involving new oil and gas discoveries.

The constitution calls for the country to divide its oil revenues from between its central government and its regions. Hawrami says that the regional government will return revenues from exports to the central government after it has taken its legal allocation and paid contractors.

He called the dispute a political standoff with Baghdad about the country's future.

"The time has come to resolve the constitutional issues, because Iraq's unity is at stake," he said.

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Source: http://news.yahoo.com/iraqi-kurds-urge-us-neutrality-oil-dispute-223808210.html

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