UPDATE 1-Iraqi Kurdish oil exports down 'significantly'-sources

Tue Nov 27, 2012 12:41pm EST

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ARBIL, Iraq Nov 27 (Reuters) - Oil exports from Iraq's Kurdistan region were reduced "significantly" on Tuesday, industry sources said.

The reason for the reduction was not clear, but the autonomous region is locked in a long-running row with the central government over payment to oil companies operating in Kurdistan.

"Exports have been reduced significantly, but the reason is not clear," said one of three industry sources on condition of anonymity.

In April, Kurdistan halted shipments of its oil in protest over what it said were overdue payments from the central government to companies in the Kurdish region.

Baghdad made an initial payment of $650 million to the Kurdistan regional government (KRG) in October, but a subsequent payment is now overdue and Iraq's deputy prime minister for energy Hussein al-Shahristani recently said it would not be made.

The oil payment dispute is part of a broader feud between Baghdad and Kurdistan over control of oil and contested territories that has dragged in major companies such as Exxon Mobil, Chevron and Total.

Baghdad rejects the deals signed between Kurdistan and oil companies as illegal and has blacklisted some that have ventured into the northern Kurdish region.

Kurdistan says its right to grant contracts to foreign companies is enshrined in the Iraqi constitution, which was drawn up following the 2003 invasion that ousted Sunni dictator Saddam Hussein.

The Kurds have since passed their own oil and gas law while disagreements among Iraq's Sunni, Shi'ite and Kurdish factions in the national power-sharing government have delayed a long-awaited hydrocarbons law aimed at ending disputes over crude resources.

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