Iraq's Kurds Blamed For Squandering Oil Resources

SINAN SALAHEDDIN

BAGHDAD (AP) — Iraq's Oil Ministry accused the Kurds of squandering the country's oil wealth by giving Western oil companies an excessive share of crude production in contracts the government considers illegal.

The criticism published in a recent study was the latest by the government of more than two-dozen oil contracts Kurdish authorities have signed since 2003 in their self-ruled region in the north. The Oil Ministry considers the contracts illegal because they were not approved by the central government.

The study published Thursday said the Kurds have been giving companies 11-28 percent of "profit oil" under the production-sharing contracts. "Profit oil" is the industry's term for crude left after deducting the cost of oil production.

The Oil Ministry said it would have considered 3-16 percent a more reasonable range, although the government has refused to offer production-sharing contracts itself. It prefers service contracts that pay set fees rather than a share of oil production.

The study, prepared by the ministry's Petroleum Contracts and Licensing Directorate, blamed the Kurdish authorities' inexperience and lack of competitive bidding processes for the production share given to companies.