Iraq Pushes To Sell Oil To South Korean Oil Company As Major Firms Skip Bids

December 6, 2008 1:36 p.m. EST

Baghdad, Iraq (AHN) - Iraqi authorities are trying to disrupt economic ties of the semiautonomous Kurdish government in northern Iraq by deciding to resume selling oil to a South Korean company.

To gain a contract from the Iraqi authorities, the South Korean company SK Energy first require to withdraw from its deal with the the Kurds, according to an official.

The country's Oil Ministry had suspended oil exports to the company and other international energy companies as they accepted contracts from the Kurdish authorities.

Iraq has decided to sel oil, which is the country's main source of revenue, to international companies as the market analysts are still speculating about its plans for oil production partnerships.

But several global oil firms -- including ConocoPhillips of the United States and Gazpromneft from Russia -- skipped the country's first Iraq Energy Expo that opened in Baghdad on Friday.

The three-day oil expo intends to attract several large clients that were blocked by the then dictator Saddam Hussein, who dominated the country for 36 years, disrupting the country's already weakened economy.

"It is like the kalashnikov. The Russians and Chinese have technologies, certainly more primitive but which are the most appropriate for the Iraqis at this stage of their development," an executive from Gazpromneft, the oil division of Russian gas giant Gazprom, was quoted saying by AFP news agency.

At present, the country produces only 2.4 million barrels a day with two million for export. Experts and oil companies believe that the country lacks investment and modernization.

Iraq has around 115 billion barrels of crude oil reserves and it is the third largest country following Saudi Arabia and Iran. In 1980s, the country used to export oil by as much as 3.4 million barrels a day.