September 8, 2009 / 1:31 PM / 10 years ago

UPDATE 1-Iraq may not pay for Kurdish oil for years -exec

* Deal on payments could be years off

* Progress slow and non-existent before January

* U.S. gas prices seen low for 12-18 months

(Adds detail, background)

By Tom Bergin

ABERDEEN, Sept 8 (Reuters) - Western oil companies operating in Iraq’s semi-autonomous Kurdish region may have to wait for years for the government to pay them for the oil they pump, the Chief Executive of one company exploring in the area said.

Talisman Energy TLM.TO CEO John Manzoni said on Tuesday that the impasse, whereby Norway’s DNO International (DNO.OL), Turkey’s Genel Energy and London-listed Addax Petroleum AXC.L were pumping tens of millions of dollars worth of oil each month and not being paid for it, was likely to persist.

“Nothing will happen between now and January,” he said in reference to Iraqi parliamentary elections due for Jan. 16.

“We’ll move gradually to some sort of constructive political agreement ... within the next few years, and it might take that long,” he told reporters on the sidelines of the Offshore Europe oil conference.

The Baghdad government and the Kurdish authorities have been unable to agree how to share Iraq’s oil revenues, blocking the payments.

DNO and Heritage Oil HOIL.L, which is in the process of acquiring Genel, have told investors that a deal on payments is likely soon.

Last year, Talisman, Canada’s third-largest independent oil and gas producer, bought stakes in two oil blocks in the Kurdish region, but since payments are seen to be years off, the company is in no hurry to start pumping yet.

“We will pace our investment with that in mind,” Manzoni said.

“If we see movement in the politics then we might deepen investment,” he said

Talisman is a major gas producer in the U.S., and Manzoni was not optimistic about the outlook for that business.

“The gas price is very low, and my view is it could stay low for another 12 or 18 months,” he said. (Reporting by Tom Bergin, editing by Will Waterman)

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