BAGHDAD: Baghdad has told Russian energy giant Gazprom to either cancel its energy contracts in Iraq's autonomous Kurdish region or abandon its work with the central government, a spokesman said on Friday.
The ultimatum is the latest in an long-running row between Kurdistan and the central government, which regards any contracts signed with the Kurdish region as illegal and has told companies they must choose between work in the northern three-province region and the rest of Iraq.
It comes just days after an Iraqi official confirmed US firm ExxonMobil, which was served a similar ultimatum, had informed the federal oil ministry that it was looking to sell its stake in a massive oilfield in south Iraq, indicating it was opting for contracts in Kurdistan instead.
"We told Gazprom to give their response to the Iraqi government -- to cancel their contract with Kurdistan or leave Badra," said Faisal Abdullah, spokesman for Hussein Shahristani, Iraq's deputy prime minister responsible for energy affairs.
He said Iraq had sent the message on November 1.
"The contract (with Kurdistan) is not legal," Abdullah said. "This situation will be the same for all companies who work in Iraq, because any energy contract should be approved by cabinet and the ministry of oil."
A Gazprom-led consortium won the contract to work on the Badra oil field, which lies southeast of Baghdad on the Iranian border, in a public auction in December 2009.
In August of this year, though, Gazprom also signed two production and exploration contracts in Kurdistan.
In addition to Kurdistan's refusal to submit deals it signs to the federal government for approval, the two sides also differ on the types of contracts to offer the Kurdish region prefers production-sharing agreements while Baghdad has opted for per-barrel service fees.
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