* No progress in lifting Kurdish oil ban - Shahristani
* Says dispute between Kurds, Baghdad a matter for Iraqis
* Biden: US to work with leaders 'across the spectrum'
By Alister Bull
WASHINGTON, April 26 A simmering dispute between
Iraq's central government and the semi-autonomous region of
Kurdistan is an internal affair, a top Baghdad official said on
Thursday, in an implicit rebuff of U.S. efforts to broker a
compromise between the two sides.
"Of course there is American interest and goodwill to
facilitate an understanding," said Iraqi Deputy Prime Minister
for Energy Hussain al-Shahristani.
"But it was clear to all sides that any internal matter has
to be discussed by Iraqis inside Iraq," he told reporters after
meeting with U.S. Vice President Joe Biden.
Washington is anxious to ease a political crisis that
erupted after U.S. troops left Iraq last year, which analysts
fear could strain the country's unity if it escalates further.
Oil is at the heart of the broad dispute between Kurdistan
in northern Iraq and the central government, which worsened when
the Kurds stopped oil exports to Baghdad earlier this month in
protest over non-payment.
Shahristani said no progress had been made in lifting the
Kurdish oil export embargo.
"They were supposed to be sending a delegation to Baghdad,
which has not come, to discuss this issue," he said.
Kurdistan Regional Government President Masoud Barzani
recently met Biden in Washington and has also visited Turkish
Prime Minister Tayyip Erdogan, who has publicly chided Iraqi
Prime Minister Nuri al-Maliki for stoking the conflict.
This blunt break with traditional diplomacy drew sharp words
from Baghdad, which Shahristani echoed in Washington.
"We regret that we hear some of the comments that have been
coming from Ankara," he said. "We do not appreciate comments
from others, or interference in our internal affairs."
However, Shahristani said he did not expect the dispute to
harm trade, including oil exports, between the two neighbors.
Iraq is Turkey's second-largest trading partner with trade of
$12 billion last year.
In addition, Iraqi cleric Moqtada al-Sadr, a powerful broker
in the country's coalition government, visited Kurdistan on
Thursday in an effort to lower tensions.
Shahristani said bilateral talks were welcome, "but they are
not a substitute for a national conference, where all parties
The White House, concerned by high U.S. gasoline prices in
an election year, wants to do everything possible to boost the
supply of oil on to world markets.
Biden's office said the vice president had "reaffirmed our
commitment to work with Iraqi leaders across the spectrum to
support the continued development of Iraq's energy sector."
Iraq sits atop some of the largest oil reserves in the world
and has ambitious plans to lift production.
But development has been clouded by tension between Baghdad
and the Kurds, who have signed exploration deals with several
foreign oil companies, including U.S. oil major Exxon Mobile
, which are deemed illegal by the central government.
Shahristani said the issue of Exxon Mobile had not been
raised during the talks with Biden on Thursday.