Texas oil firm warned on Kurdish deal

The State Department contradicted a Texas oil company yesterday, saying it had warned the firm about the “political and legal risks” of an oil-exploration contract that it has signed with the Kurdish government in northern Iraq.

Department officials noted, however, that there was nothing they could have done to prevent the Dallas-based Hunt Oil Corp. from securing the contract because it does not violate U.S. law.

“Hunt Oil has been advised of U.S. policy urging companies not to sign oil contracts with the Kurdistan Regional Government until [an Iraqi] national oil law is passed, as well as the potential political and legal risks inherent in such a contract,” said department spokesman Tom Casey.

The Iraqi parliament has failed to pass a national oil law despite calls from the Bush administration dating back nearly two years.

In the meantime, the Kurdistan Regional Government (KRG) has signed eight contracts and soon expects to complete two more, in addition to the deal with Hunt Oil — the only American company to conclude a contract.

“The company decided to sign a contract regardless of our advice, but that is their decision. They are not a U.S. government entity, and they”re allowed to make those calls,” Mr. Casey said. “When they heard our opinion, they clearly made their own choice on this matter, but it”s certainly not one we support.”

Hunt Oil spokeswoman Jeanne Phillips issued a prepared statement on Monday saying the company had not sought or received U.S. government advice on the deal it signed last month.

“Our policy as a company is to act independently when determining where to explore for oil and gas around the world,” she said.

But Mr. Casey said there was “at least one contact” between Hunt Oil representatives and U.S. officials in Iraq “before they made their decision.”

Earlier this year, Iraqi Prime Minister Nouri al-Maliki”s government agreed on a draft under which control and revenue from the country”s oil reserves would be shared between Baghdad and Iraq”s provinces, but parliamentary approval has been stalled by political infighting.

“People could find themselves having signed agreements that basically will have no legal standing once a national oil law is passed, or may get involved in some kind of very complicated legal wrangling between the regional and national governments,” Mr. Casey said.

Nechirvan Barzani, prime minister of the KRG, said on Sunday that he signed the deal because he could not wait for a national law any longer. He insisted that the arrangement does not violate Iraq”s constitution, even though Mr. al-Maliki”s oil minister called it illegal.

“The outcome of the deliberations for the national hydrocarbons law will not affect this agreement one way or another,” Qubad Talabani, the Washington representative of the KRG, said recently.

Rep. Henry A. Waxman, the Democratic chairman of the House Oversight and Government Reform Committee, said yesterday that the Hunt Oil contract should be investigated.

He and Rep. Dennis J. Kucinich, chairman of the subcommittee on domestic policy, asked the State Department and the company”s chief executive officer, Ray Hunt, to turn over all Iraq-related communications with the U.S. government by Nov. 2.

They say that as a member of President Bush”s Foreign Intelligence Advisory Board, Mr. Hunt had access to information that could have benefited his company.