Heritage Oil deal under threat?

There could be problems on the horizon for Heritage Oil, the company whose founder Tony Buckingham helped sponsor the rise of mercenary firms Executive Outcomes and Sandline International in Africa in the 1990s.

Heritage’s concession in Iraqi Kurdistan is under threat from the Baghdad Government, according to a Lebanese outfit called Tactical Report:

A source close to Kurdish Democratic Party (KDP) says the KDP command has threatened the Iraqi Oil Ministry to react negatively to any measure it may take against the foreign oil companies that sign contracts with the Kurdish government. Det Norske Oljeselskap (DNO) of Norway, Petoil and General Energy, both of Turkey, Western Oilsands and Heritage Oil, both of Canada, and Woodside of Australia, all have oil interests in Kurdistan in northern Iraq.

All these foreign companies have bypassed the central government in Iraq and signed contracts with the Kurdish government to explore for oil in northern Iraq. (Tactical Report, 25 April)

Kurdistan Iraq – Kurdish Peshmerga forces Reports from the Kurdish Democratic Party (KDP) suggest the Kurdish Peshmerga forces have recently seized a shipment of oil equipment destined for the Iraqi state-run South Oil Company (SOC). The equipment was on their way from Russia to southern Iraq through the Turkish-Iraqi border. According to these reports, the Peshmerga forces have so far refused to release the shipment and let it reach its destination. 

It is not yet clear whether the Kurdish move has to do with the tension prevailing between the local Kurdish government and the Oil Ministry in Baghdad. (Tactical Report, 26 April)

All the deals have the same problem: the Oil Ministry in Baghdad refuses to approve any of them, and we do not know whether the new government will do. In addition, all these deals are politically contested by the Shiites. The Shiite clerical Marja’iya and most Shiite factions, including the Da’wa Party, Sadr Movement and Al-Fadhila Party are radically opposed to any oil deals bypassing the Oil Ministry in Baghdad.  (Tactical Report 5 May)

This comes at a time when there appears to be a growing Shiite involvement in the conflict over the Kurds’ claim to the oil-rich province of Kirkuk.

All of which makes the issues I raised in my last post on Heritage all the more relevant. It would be interesting to know who is providing the security for the company’s operations.