BAGHDADm, (AP) – Iraq has halted oil exports to Austria’s OMV, the leading oil and gas group in central Europe, to protest a deal with the self-ruled Kurdish region, a government official said Saturday.
The company joins South Korea’s SK Energy in being cut off because of deals with the Kurds that are not sanctioned by the government in Baghdad.
In November, OMV signed two production-sharing contracts with the Kurdish administration in northern Iraq for two exploration blocks, Mala Omar and Shorish, in Irbil.
Irbil, located about 217 miles north of Baghdad, is the capital of the Kurdish region, which is made up of three northern Iraqi provinces.
An official from Iraq’s Oil Ministry said the decision to end the contract was enforced Jan. 1.
“The ministry has made it clear since last December that it would stop cooperation with these companies and then blacklist them if they keep insist on maintaining these contracts which we consider illegal,” the official said on condition of anonymity because he was not authorized to release the information.
The official said OMV will no longer receive 10,000 barrels per day of Iraq’s Basra Light crude.
In Vienna, OMV spokesman Thomas Huemer declined to comment on the ministry’s decision but stressed that its oil deal with the Kurds was in line with the Iraqi Constitution.
Huemer also declined to comment on how much Iraqi oil the company was buying,
Four companies are thought to have agreements with both the Oil Ministry and with Kurdistan: the United Arab Emirates’ Crescent, Canada’s Western Oil Sands and Heritage Oil, India’s Reliance Industries and Austria’s OMV.
“Letters were already sent to these companies to inform them about the decision in case they eye any future cooperation with the Oil Ministry,” the official said.
Since April, the Kurds and Arab leaders have been wrestling in parliament over who has the final say in managing oil and gas fields. The dispute has delayed passage of the national oil and gas law designed to regulate foreign investment in Iraq vast reserves.
Frustrated with this delay, the Kurds have signed 15 production-sharing contracts with 20 international oil companies. The Oil Ministry considers those contracts illegal.
As of Dec. 31, South Korea’s SK Energy refused to abandon its exploration project in Kurdistan as part of a consortium led by the state-run Korea National Oil Corp.
That prompted the Oil Ministry to cancel a contract to supply the company with about 90,000 barrels per day of Basra light crude.