Friday February 1 2008 | Reuters | Editing by Anthony Barker

VIENNA, Feb 1 (Reuters) - Iraq has halted oil supplies to Austria's OMV AG in protest over a deal between the company and the Kurdish regional government, Iraq's oil minister said on Friday.

"The action has been taken from the first of January, everything has been stopped," Iraqi Oil Minister Hussain al-Shahristani told reporters. "We have informed them (OMV) of that."
It emerged earlier this week that Iraq has also halted oil exports to South Korea's SK Energy, in response to what it says is an illegal oil exploration deal between Korean firms and the semi-autonomous KRG.

Baghdad insists that all oil deals in Iraq must be approved by the central government and says the KRG deals with international companies are illegal.

"We do not comment on this," OMV spokesman Thomas Huemer said. "We have no problem with supply."

"We, like other oil companies who have exploration rights in northern Iraq, believe that these agreements which are in place are in line with the Iraqi constitution."

OMV had been buying about 10,000 barrels per day of Iraqi Basra Light crude, an industry source said. Iraq's Kurdish region awarded OMV two production sharing contracts, the Kurdish government said last year.

South Korea's SK had been importing 60,000-90,000 bpd of Iraqi oil under an annual contract that was due for renewal on Jan. 1. Supplies also were halted on Jan. 1, an Iraqi oil ministry source said on Jan. 28.

Kurdish officials have clashed with Baghdad over a draft national oil law, which will determine how contracts are awarded and how revenues are distributed.

The law has stalled for months due to political infighting after a draft was approved by cabinet almost a year ago.
Frustrated with delays in Baghdad, the region passed its own oil and gas law in August.

The Iraqi oil minister was in Vienna, where OMV is based, for a meeting of the Organization of the Petroleum Exporting Countries.