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Iraq rows with Kurds

03 April, 2012

BAGHDAD: Iraq was at loggerheads with Kurdistan on Monday over the autonomous region's move to stop oil exports and allow Baghdad's fugitive vice president to visit Qatar despite terror charges against him.

The row is the latest sign of worsening ties between the central government and Kurdish authorities in Arbil, with the two sides arguing over disputed territory in north Iraq, dozens of energy contracts awarded by Kurdistan, and Kurdish claims that Prime Minister Nuri al-Maliki is consolidating power.

On Monday, the central government's two most senior oil officials said Arbil owed Baghdad more than $5 billion in promised exports, was smuggling the oil it produced to Iran, and sharply criticised Kurdistan for letting Sunni Vice President Tareq al-Hashemi, accused of running a death squad, travel to Qatar.

"The biggest part (of Kurdistan's oil production) is being smuggled outside Iraq, especially through the Iranian border," Deputy Prime Minister Hussein al-Shahristani told a news conference in Baghdad.

He said Iraq had spoken with neighbouring Turkey and Iran to tighten border security in an effort to stop the smuggling. Oil Minister Abdelkarim al-Luaybi added: "We have detailed reports on the areas from which the oil is being smuggled, going in the direction of Iran... and is being sold at prices lower than global prices."

Kurdistan has said it is capable of exporting 175,000 barrels of oil per day (bpd), but on Sunday stopped its crude exports entirely after arguing the central government had withheld $1.5 billion owed to foreign oil companies working in the region. It has said the exports would be diverted to the local market for processing and refining, but the three-province region in Iraq's north only has the capacity to do so for around 70,000 bpd.

Shahristani also said that Kurdistan had deprived the central government of a total of $5.649 billion in 2010 and 2011 as a result of reduced exports, before Sunday's stoppage. He said the money lost by Baghdad should be cut from Kurdistan's allocation in the federal budget. Luaybi also said Iraq had received a second letter from Exxon Mobil on April 1 "stressing their previous commitment" to freeze a controversial contract agreed in October to work in Kurdistan.

According to Baghdad, Exxon Mobil originally sent a letter making that commitment on March 5, but Kurdish authorities deny this claim. Kurdistan has signed some 40 contracts with international companies on a production-sharing basis without seeking the express approval of the national oil ministry, which regards Kurdistan's deals as illegal.

The federal oil ministry, meanwhile, has awarded energy contracts to foreign firms on the basis of a per-barrel service fee. It has also refused to sign deals with any firm that has agreed to a contract with Kurdistan.

Shahristani also said on Monday that Qatar hosting Hashemi, who arrived in the Gulf emirate on Sunday, was "unacceptable" and called on Doha to extradite him, a demand Hashemi said was unconstitutional.

"The state of Qatar receiving a wanted person is an unacceptable act and Qatar should back off from this stance, and return him to Iraq," he said. Hashemi met with Qatari Emir Sheikh Hamad bin Khalifa al-Thani on Monday to discuss "relations between the two brotherly countries and developments in the region," according to Qatari state news agency QNA.

Shahristani said Kurdistan, where Hashemi had been holed up since charges were issued against him in December, had committed a "clear challenge to law and justice" by allowing him to leave the country.

End.

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