State Dept.: U.S. advised against oil deal

WASHINGTON, July 3 (UPI) -- The U.S. State Department has clear policy about pursuing oil contracts in Iraq in the absence of a national oil law, a department spokesman said Thursday.

Published reports say Cabinet officials were at odds regarding the deal Hunt Oil signed with the regional Kurdish government last fall. The State Department advised against the deal, but the Commerce Department wished Hunt Oil officials well, the reports indicated.

"What I can say ... is that it is very clearly our policy that we advise anybody who came to us that absent a hydrocarbons law, they should defer signature of any contracts with any sub regional institutions in Iraq," State Department spokesman Sean McCormick told reporters.

McCormick said he was unaware how Hunt Oil or any other company was made aware of the policy.

He said he could only provide information about department policy, not be "a fact witness for any and all conversations that have taken place in the State Department."

"I can tell you what our policy has been and is -- and that should have been what was conveyed to anybody who made any inquires about this," McCormick said, explaining that the department advocated contract deferrals because it thought separate contracts would complicate "an already complicated negotiations regarding a hydrocarbon law."

President George Bush's spokeswoman Dana Perino said the White House was unaware of the negotiations.

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