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Last Updated: Thursday, 4 October 2007, 04:28 GMT 05:28 UK
Iraqi Kurds sign four oil deals
By Mark Gregory
BBC News

Pipeline pumping tubes in Basra
Most of Iraq's oil is in the Shia south and Kurdish north
The Kurdish regional government in northern Iraq has announced four new oil exploration deals with international energy companies.

The news is likely to upset the central government in Baghdad and the US.

Both have been pressing the Kurds to hold off negotiations until national oil and gas laws for opening up Iraq's energy wealth are in place.

Development of Iraq's oil reserves has been held up by disagreements between Sunni, Shia and Kurdish communities.

These laws will set the framework for investment by foreign energy firms and for dividing oil revenues between the communities.

But increasingly the semi-autonomous Kurdish area has signalled that it will go it alone without waiting for a national consensus.

'Illegal'

In the latest move, the Kurdish authorities have announced four exploration contracts and two refinery deals, worth around $800m (400m), giving rights to look for oil under Kurdish territory.

French and Canadian companies are involved along with other foreign investors that have not yet been named.

There has been no official reaction from either Baghdad or Washington but neither will be pleased.

A few weeks ago the Kurdish government signed agreed its first ever exploration deal with a foreign oil firm, Hunt Oil from Texas.

The Iraqi national oil minister in Baghdad described this deal as illegal.

Meanwhile, the Bush administration sees a national accord on energy policy as central to healing Iraq's wounds and creating the conditions for prosperity.

The Kurdish authorities insist their energy deals comply with the expected terms for national laws.

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