ROME (AP) – Iraq’s Oil Minister Hussein al-Shahristani said Monday that oil contracts between the autonomous Northern Iraqi Kurds and foreign companies remain invalid, despite recent amicable talks between the two sides over the country’s long-delayed federal oil law.
The Kurds have signed around 25 production-sharing contracts with several small and mid-sized oil companies, but Al-Shahristani said they do not meet the conditions of the draft 2007 law.
“We do not recognize them,” al-Shahristani told reporters on the sidelines of the International Energy Forum bringing together oil-consuming and oil-producing nations. The draft law requires and open bidding process, and also would establish which foreign countries are eligible to work in Iraq. The dispute between the two sides has dragged on for many months and delayed agreement on a final oil law that Iraq needs to provide the legal framework critical to attracting foreign investment and ramp up oil production.
Passage of a draft oil law was expected back in 2005. Despite the delays, the CEO of Italy’s largest energy company Eni Spa was quoted Monday as saying that the company is ready to return.
“Now there is the possibility of locking up contracts in the new legislative period,” the Milan-based Corriere della Sera quoted Paolo Scaroni as saying. “We consider Iraq an opportunity.”
Before the war, Eni had rights to an oil field with 2 to 3 billion barrels of reserves, the newspaper reported.
Also on the sidelines of the energy conference, Venezuela Oil Minister Rafael Ramirez said Venezuela will discuss the discrepancy between its official oil production figures and much lower estimates by OPEC during a visit by the group’s secretary-general in May.
“We are against using figures from secondary sources,” which are often cited by OPEC in its publications, Ramirez said. “Venezuela has proposed that another reference be sought,” to determine oil production figures.
OPEC Secretary-General Abdallah Salem al-Badri will visit Venezuela in May and “we will take him to all our terminals and present him with a summary of all the ships and tankers that depart every day,” Ramirez said.
Ramirez also said that Venezuela plans to make a claim for compensation from Exxon Mobil Corp. for the costs and damages caused by a U.K. court case in which the U.S. oil company had unsuccessfully sought to freeze the overseas assets of Venezuela’s state oil company as part of a larger legal dispute.
“We are estimating the associated costs and the damages it caused and we will make a claim,” Ramirez said. On record high oil prices, Ramirez said that Venezuela sees “the price in this range of US$90 and above,” he said, refusing to specify an upper limit.
On Sunday, OPEC’s secretary-general said oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply, something he doubted.
“Oil prices, there is a common understanding that has nothing to do with supply and demand,” al-Badri said on the sidelines of an energy conference in Rome.
Oil prices reached a new high Friday at US$117 a barrel. The OPEC chief said OPEC “will not hesitate” to increase production if the group thought the higher prices were due to shortages. But he said more oil will not solve the high prices.
OPEC’s production levels were just one of many factors, he said, while others included the political situation, market speculation, labor issues and natural catastrophes.