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Iraqi Kurdistan reiterates objection to BP's Kirkuk oil deal

Thursday, 7 Nov 2013 | 4:33 PM ET

ARBIL, Iraq, Nov 7 (Reuters) - Iraq's Kurdistan region reiterated its objection to a deal between BP and the central government to develop the northern Kirkuk oilfield, a day after the local governor, a Kurd, voiced full support for the British company's plans.

Kirkuk lies on the disputed boundary between the autonomous Kurdish region and the rest of Iraq, and is at the heart of a dispute between Baghdad and the region over territory and resources.

The Kurdistan Regional Government's (KRG) difference with the Kirkuk governor's stance on the BP deal also points to tensions within the autonomous region over how to manage resources.

Baghdad signed a contract in early September for BP to revive the giant oilfield, allowing the company to negotiate access to significant reserves in the north in return for helping to arrest a huge decline in output.

At that time, the Kurdistan Regional Government (KRG) rejected the deal.

On Wednesday, BP chief executive Bob Dudley and Iraqi Oil Minister Abdul Kareem Luaibi travelled to Kirkuk and met the city's governor, who voiced his "complete support".

But a spokesman for Kurdistan's Ministry of Natural Resources (MNR) said on Thursday it continued to oppose the deal and would neither facilitate nor assist any work or security for BP until the KRG was engaged as an equal partner.

"The KRG has to date not been consulted on this matter and we regard the agreement that BP has allegedly signed with the federal government as unconstitutional, and therefore not legally defensible," the spokesman said.

The governor of Kirkuk, Najimeldin Kareem, is a senior member of the Patriotic Union of Kurdistan (PUK), which rules in partnership with the Kurdistan Democratic Party (KDP) -- seen as the main driver behind the region's oil policy.

"The fact that Najimeldin has seen BP and welcomed them to Kirkuk, and MNR has issued a statement saying they were not informed is a clear indication of a rift opening between the Kurdish political parties," said Shwan Zulal, head of the London-based Carduchi Consulting.

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