Identifier
Created
Classification
Origin
07BAGHDAD3893
2007-11-29 15:08:00
SECRET
Embassy Baghdad
Cable title:
OIL MINISTER ANNULS KRG OIL CONTRACTS
how-toVZCZCXRO8994 RR RUEHBC RUEHDE RUEHIHL RUEHKUK DE RUEHGB #3893 3331508 ZNY SSSSS ZZH R 291508Z NOV 07 FM AMEMBASSY BAGHDAD TO RUEHC/SECSTATE WASHDC 4578 INFO RUCNRAQ/IRAQ COLLECTIVE RUEHC/OPEC COLLECTIVE RUEHUP/AMEMBASSY BUDAPEST 0007 RUEHVI/AMEMBASSY VIENNA 0045 RUEATRS/DEPT OF TREASURY WASHDC RHEBAAA/USDOE WASHDC RHEHAAA/WHITE HOUSE WASHINGTON DC//NSC//
S E C R E T BAGHDAD 003893
SIPDIS
SIPDIS
STATE FOR E, NEA-I AND EEB
E.O. 12958: DECL: 11/29/2017
TAGS: ECON EPET IZ
SUBJECT: OIL MINISTER ANNULS KRG OIL CONTRACTS
REF: BAGHDAD 3863
Classified By: Economic Counselor Todd Schwartz, reasons 1.4 b,d
S E C R E T BAGHDAD 003893
SIPDIS
SIPDIS
STATE FOR E, NEA-I AND EEB
E.O. 12958: DECL: 11/29/2017
TAGS: ECON EPET IZ
SUBJECT: OIL MINISTER ANNULS KRG OIL CONTRACTS
REF: BAGHDAD 3863
Classified By: Economic Counselor Todd Schwartz, reasons 1.4 b,d
1. (C) SUMMARY: Oil Minister Shahristani has written to at
least two international oil companies that entered into
production sharing agreements (PSAs) with the Kurdish
Regional Government to declare the annulment of their
contracts, and intends to annul others. END SUMMARY.
Oil Minister: Contracts annulled
-------------- -
2. (S) We received copies of two letters that Oil Minister
Hussayn al-Shahristani signed on November 26 to two
international oil companies regarding the annulment of their
contracts with the KRG, one to Zsolt Hermadi, CEO of the
Hungarian company MOL (www.mol.hu),and the other to Wolfgang
Ruttenstorfer, CEO of the Austrian company OMV (www.omv.com).
3. (C) The nearly identical letters state:
While we acknowledge your keen desire to get into investment
business in upstream and exploration activities with the
Iraqi oil sector. (sic) We, in the capacity of the Iraqi
Minister of Oil and on behalf of the Iraqi Government declare
the annulment of all the contracts that have been recently
signed with the Ministry of Oil and Natural Resources of the
KRG, without authorization and approval of the government of
Iraq. These contracts are in violation of the prevailing
Iraqi law and your company will bear all the consequences for
such violation.
4. (C) The letter to OMV also notes that the Ministry of
Oil has suspended the MOU signed with OMV together with the
related activities stipulated therein. Such MOUs typically
involve training or technical services that international oil
companies (IOCs) have been providing free of charge to the
GOI.
5. (S) Shahristani has prepared at least two other similar
letters to IOCs that entered into contracts with the KRG.
6. (C) COMMENT: The blanket annulment, whether directed to
a limited number of companies or all the companies that
entered into PSAs with the KRG, is certain to further
infuriate the KRG Minister of Natural Resources. The wording
may be a bit overreaching, as the Ministry purports to annul
"all" contracts with the IOCs, whether or not the contracts
are PSAs. The suspension of the MOUs with the Ministry of
Oil seems to be a self-defeating bit of added spite,
reflecting the venomous level of the war of words between the
Oil Minister and his KRG counterpart. The move will further
complicate efforts to attain a national hydrocarbon framework
law.
BUTENIS
SIPDIS
SIPDIS
STATE FOR E, NEA-I AND EEB
E.O. 12958: DECL: 11/29/2017
TAGS: ECON EPET IZ
SUBJECT: OIL MINISTER ANNULS KRG OIL CONTRACTS
REF: BAGHDAD 3863
Classified By: Economic Counselor Todd Schwartz, reasons 1.4 b,d
1. (C) SUMMARY: Oil Minister Shahristani has written to at
least two international oil companies that entered into
production sharing agreements (PSAs) with the Kurdish
Regional Government to declare the annulment of their
contracts, and intends to annul others. END SUMMARY.
Oil Minister: Contracts annulled
-------------- -
2. (S) We received copies of two letters that Oil Minister
Hussayn al-Shahristani signed on November 26 to two
international oil companies regarding the annulment of their
contracts with the KRG, one to Zsolt Hermadi, CEO of the
Hungarian company MOL (www.mol.hu),and the other to Wolfgang
Ruttenstorfer, CEO of the Austrian company OMV (www.omv.com).
3. (C) The nearly identical letters state:
While we acknowledge your keen desire to get into investment
business in upstream and exploration activities with the
Iraqi oil sector. (sic) We, in the capacity of the Iraqi
Minister of Oil and on behalf of the Iraqi Government declare
the annulment of all the contracts that have been recently
signed with the Ministry of Oil and Natural Resources of the
KRG, without authorization and approval of the government of
Iraq. These contracts are in violation of the prevailing
Iraqi law and your company will bear all the consequences for
such violation.
4. (C) The letter to OMV also notes that the Ministry of
Oil has suspended the MOU signed with OMV together with the
related activities stipulated therein. Such MOUs typically
involve training or technical services that international oil
companies (IOCs) have been providing free of charge to the
GOI.
5. (S) Shahristani has prepared at least two other similar
letters to IOCs that entered into contracts with the KRG.
6. (C) COMMENT: The blanket annulment, whether directed to
a limited number of companies or all the companies that
entered into PSAs with the KRG, is certain to further
infuriate the KRG Minister of Natural Resources. The wording
may be a bit overreaching, as the Ministry purports to annul
"all" contracts with the IOCs, whether or not the contracts
are PSAs. The suspension of the MOUs with the Ministry of
Oil seems to be a self-defeating bit of added spite,
reflecting the venomous level of the war of words between the
Oil Minister and his KRG counterpart. The move will further
complicate efforts to attain a national hydrocarbon framework
law.
BUTENIS