The PM said he is currently in negotiations with Chevron to develop various oil fields, to include a cross-border oil field with Iran. The PM claimed that Chevron had told him that it had already raised the issue of a cross-border development with Tehran as well. ... The PM asked the CDA about the political feasibility of such a deal involving a U.S. firm working both sides of a cross-border field, given current USG policies toward Iran. The CDA noted that U.S. law on sanctions would apply, but added that the Administration was reviewing its policies on Iran.
Chevron has denied any wrongdoing.
The US Baghdad Embassy cable from March 2009 doesn't name the oilfield in question but a few months later (Dec 2009) Iranian troops occupied a disputed oil well from the Fakka oilfield a few hundred meters inside Iraq, an incident which left everyone in Iraq scratching their heads at the time.
Incidentally, Iranian media reported just today that Iraq and Iran have finally reached an agreement on plans to develop five of the eight cross-border oilfields. Majnoon (now being developed by Shell and Petronas) and Fakka are the largest border fields, with other smaller undeveloped or abandoned fields that straddle the border from al-Siba, south of Basra, to Naft Khaneh, northeast of Baghdad.
So far, Halliburton seems to be the only American company to get anything out of these Iraqi development deals, since Shell (and others) have already awarded them subcontracts to drill new oil wells in the Basra government.
The CDA asked the PM about the status of the reform proposals from the oil symposium hosted by Deputy Prime Minister Barham Saleh in early March. She said that it was a good sign that the government had formalized the symposium's conclusions into recommendations for government decision, and asked if the package would need only COM agreement or would also have to go to the COR for approval. The PM said no, he does not intend for the reform proposals to go to the COR and that he would do everything to avoid this, commenting that the COR would "take us into a political maze," which was completely unnecessary.
Of course, the much-touted oil reform law is yet to pass, mostly due to political wrangling between officials in Baghdad and the Kurdish region.
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The PM then expressed some frustration and questioned why the GOI had to act so responsibly towards a organization determined to be a terrorist group by both Iraq and the U.S.. He noted that this created daily problems within the GOI. ... "It is not because of Iran," he said. "We have great internal pressures to resolve this matter." ... He said that Iran had asked how the GOI could support cross border military actions by Turkey against the PKK, but not allow Iran to take similar action against the MEK at Camp Ashraf.