Bush administration encouraged oil deal in Kurdistan undermining Iraqi "national unity"

No national law on the division of oil revenues had been passed at the time (and still has not been), and the agreement outraged Iraqi government officials fearful that Baghdad would be cut out of its share of lucrative oil profits by such arrangements and that the country might well break up under centrifugal pressures. At the time Iraqs oil minister, Hussein al-Shahristani, called the deal illegal.

The Bush administration echoed these remarks. The president stated on September 20, 2007: I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it Im concerned.

A State Department official told the press: Its counterproductive. Our view is the contract process should be controlled by the central government and that these regional deals could become illegal if an oil law is passed.