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Feds look at Schaffer oil deal in Kurdistan

By Mike Saccone, The Daily Sentinel

Published July 10, 2008 at 12:05 a.m.

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An oil contract U.S. Senate candidate Bob Schaffer helped negotiate in Iraqi Kurdistan is one of several production deals the U.S. State Department has flagged as problematic for Iraq and its attempts to establish a national oil policy.

The oil contract, finalized in November 2007, allows a subsidiary of Schaffer's former employer, Denver-based Aspect Energy, to produce oil on a nearly 104-square-mile plot in the Dohuk Governate in northern Iraq.

Schaffer confirmed Wednesday he was one of several Aspect Energy executives who visited Kurdistan in November 2006 and laid the groundwork for the company's oil deal.

The Kurdistan Regional Government, which governs the semiautonomous region of Iraq, has moved during the past several years to aggressively develop crude oil resources in northern Iraq. Those efforts run counter to moves to implement a national oil policy.

According to a June 23 report from the nonpartisan Government Accountability Office, Aspect Energy's oil contract and roughly two dozen other similar deals have been a point of contention between Iraq and the Kurdistan Regional Government.

"The (Kurdistan Regional Government) has negotiated an estimated 25 contracts with foreign oil firms, which the Iraqi federal government claims are illegal," according to the report.

Schaffer, a Republican, said he was unaware the State Department had warned energy firms not to strike oil deals with the Kurdistan Regional Government at the time of his visit.

"We didn't experience any discouragement," Schaffer said.

John Fleming, a spokesman with the State Department's Bureau of Near Eastern Affairs, said the U.S. government has always asked that energy firms conduct business with Iraq's federal government and not other entities in the country.

"Our policy is to support the national government and its efforts to have national hydrocarbon legislation," Fleming said.

R. Todd Neugebauer, chief investment officer for Aspect Energy, defended the company's deal with the Kurds, calling it "legal under the Iraq Constitution."

Comments

  • July 10, 2008

    10:30 a.m.

    Suggest removal

    jbowen43 writes:

    Schaffer is just another oil vulture picking at the carcass of Iraq.