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By Mohammed Abbas
BAGHDAD, June 1 (Reuters) - The Kurdish authorities must be involved in decisions by the central government in Baghdad to award long-term service contracts for oil fields around the disputed city of Kirkuk, the region's oil minister said Monday.
The Kurdish Regional Government would "certainly" reject any deal signed between Baghdad and a private firm if it viewed it as a "lousy agreement", KRG natural resources minister Ashti Hawrami said.
"The people who matter must be consulted, and we expect to be absolutely consulted," Hawrami told Reuters.
"I will say no company will sign an agreement without coming to the KRG. They have to sit down with us and say 'Is this OK?'. If I am not party to the agreement up front, I don't know what it is."
Hawrami added: "If it's a lousy service agreement, I would certainly reject it, because we want to maximise returns for the Iraqi people." Iraq, desperate to breathe life into flagging oil exports as it confronts a deep budget gap due to low crude prices, has offered up long-term service contracts to many of its prized oil fields in two rounds of tenders.
The first round is due to be decided at the end of June. The oil fields around Kirkuk, a northern city that Kurds claim as their ancestral capital and which they want wrapped into their semi-autonomous northern enclave, are included in that round.
The Kurdish authorities have sparred with the Shi'ite Arab-led government in Baghdad over the future of Kirkuk and other disputed territories, and in particular over oil resources and independent contracts that the KRG has signed with private oil firms to exploit fields within its enclave.
U.S. officials fear Kurd-Arab tensions could lead to Iraq's next round of violence just as the sectarian warfare and insurgency unleashed by the 2003 U.S.-led invasion are receding.
"There is a practical issue. To work in a Kirkuk field ... requires our protection. Most of it is under our security protection," Hawrami said.
"So how can a company come work there, if we are not partner to agreement and expect us to protect them?" (Reporting by Mohammed Abbas; Editing by Michael Christie)