Former Iraqi Oil Minister Plays Down Dispute With Kurdistan Production

By Greg Flakus
Houston
14 May 2009

Iraq's Oil Minister Hussain al-Shahristani says deals made by Kurdistan with foreign private oil companies to develop petroleum production in new fields for export starting next month are illegal. But a former Iraqi oil minister taking part in the Second Iraq Oil and Gas Summit in Houston on Wednesday expressed confidence that such disputes will be resolved and that the country's oil wealth will increase in the years ahead.

Ibrahim al-Oloum, former Iraqi Oil Minister

Former Iraqi Oil Minister Ibrahim al-Oloum says he is confident political differences in his country can be resolved so that its oil wealth can be fully exploited. He hailed the Kurdistan Regional Government's plan to sell oil from its new fields and downplayed the dispute over direct deals made by the regional government with two foreign companies.

"These differences, these political differences, really deprive the Iraqi people of development. We need to resolve them," he said.

Dialogue necessary to resolve dispute

He said the Iraqi federal government and Kurdish regional leaders need to engage in dialogue over this issue.

"Both sides need that," he said. "Iraq needs the production at this moment very badly and also Kurdistan, what are they going to do with the oil? They need to export it and there is no way except through the traditional pipeline. So both parties have to get together and talk about this."

Kurdistan confident about oil agreements

Qubad Talabany, Kurdistan representative

The Kurdistan Regional Government representative to the United States, Qubad Talabany spoke with confidence about the oil export agreements and what the new production means not only for his region, but for the country as a whole.

"At an initial rate of 60,000 barrels a day, this will be the first new oil to be exported from Iraq since Operation Iraqi Freedom," Talabany said. "It is also the first of Kurdistan's newly discovered oil fields to produce and begin flowing through the pipeline to Turkey and out on to the market while returning dollars to the federal treasury in Iraq."

This is the first time oil fields have been developed in Kurdistan and Talabany and other participants familiar with Iraq's energy sector say it is only the beginning. They note that 90 percent of the country's potential oil-producing areas remain unexplored. Iraq produces just under two million barrels of oil a day now, down from the three and a half million barrels a day it produced in the 1980's. Iraq's estimated reserves top 112 billion barrels, making it second only to Saudi Arabia in terms of the oil it holds underground.

Oil bill may have to wait until after election

Houston conference participants

The former oil minister, Al-Oloum, says Iraq's output could reach four million barrels a day by 2014 and seven million barrels a day by 2019 if lawmakers pass a hydrocarbon bill by sometime next year. The proposed bill has been stalled in the Iraqi parliament for three years and the former minister predicts it will not be approved until sometime after a new parliament is elected at the end of this year.

The conference in Houston brought together around 100 Iraqis and representatives of US and international energy companies. Some companies set up displays to show their services and expertise, while others relied on personal discussions with Iraqis attending the conference to develop contacts and business leads. The event continues through Thursday.