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Iraq agrees to resume oil sales to South Korean firm after it withdraws from Kurdish contracts

Iraq's Oil Ministry has agreed to resume oil sales to the South Korean company SK Energy after the company withdraws from a contract with the Kurds, an official said Saturday.

The Oil Ministry suspended oil exports to South Korea's SK Energy and several other international firms to protest deals they had signed with the semiautonomous Kurdish government in northern Iraq.

But the decision will be reversed since South Korea's leading oil refiner has informed the Iraqi government that it plans to withdraw from the contract with the Kurds, Falah al-Amiri, the head of the state oil marketing arm SOMO, told The Associated Press. He gave no timeframe.

"The company officials have said that they will not be involved in any commitments apart from the federal government," al-Amiri said in an interview at a three-day energy conference that began Friday in Baghdad. "Oil shipments will be allocated for this company in the near future."

SK Energy could not immediately be reached for comment.

The Iraqi federal government suspended crude exports to South Korea's leading oil refiner in January on grounds that South Korean companies had not abandoned a deal signed in November with the Kurdish administration to develop a disputed oil field.

The Kurdish regional government in northern Iraq has signed more than 20 oil deals with foreign firms to work in Kurdish-controlled fields since it drafted its own oil and gas law in August 2007.

The Shiite-led Iraqi central government says the deals are invalid with no national oil law in place.

SK Energy is part of a consortium led by the state-run Korea National Oil Corp. that signed a package of oil deals with Kurdish authorities last year.

Kurdish authorities played down concern about the decision.

"The deal between this consortium with the Kurdish regional government is still valid and the withdrawal of one company is not a matter of concern to us," spokesman Falah Mustafa said.

The Kurds, whose territory sits on top of vast reserves, argue the Iraqi constitution gives them the right to unilaterally negotiate and sign oil deals, without consulting with the central government in Baghdad.

The Oil Ministry, however, considers those agreements illegal and has warned it will exclude and blacklist companies that sign deals with the Kurds.

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