UPDATE 1-Iraq bans Kurdish firm Kar Group from operating Kirkuk oilfields

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BAGHDAD, Jan 8 (Reuters) - Iraq’s parliament voted on Monday to ban Kurdish engineering firm Kar Group from operating Kirkuk’s oilfields, following Iraq’s recapture of the Kurdish-held oil region in October.

The Kurds have withdrawn from most Kirkuk oilfields since October but the vote came after lawmakers said the Kar Group refused to cooperate with Iraq’s state-run North Oil Co. (NOC) and hand back the Khurmala oilfield.

The Kurds claim Khurmala is located inside the official boundaries of the semi-autonomous Kurdish Regional Government KRG.

Kar Group could not be immediately reached for comment.

Parliament also authorised NOC to take over production and export operations at the field. That will potentially increase Iraq’s oil production and crude exports, although it was unclear by how much.

In addition, parliament requested the Iraqi central bank to track down cash deposited at banks outside Iraq that had been generated from Kurdish oil exports.

It asked the central bank to draft a detailed report on the names of banks used to deposit the cash.

Iraqi government forces captured the Kurdish-held oil city of Kirkuk on Oct. 16 last year, and took over the northern region’s oilfields, in retaliation for a Kurdish referendum on independence which was widely opposed by Turkey, Iran and Western powers.

The move to ban Kar Group follows financial restrictions imposed by Baghdad in retaliation for the Kurdish referendum, including a ban on direct international flights to and from the Kurdish region and closing the border crossings.

Kirkuk crude sales have been halted since Iraqi forces took back control of the fields in October.

Kar Group had been operating some of the Kirkuk oilfields since Kurdish forces took control of the city in 2014, when the Iraqi army collapsed in the face of Islamic State. (Reporting by Ahmed Rasheed; Editing by Susan Fenton)