The US military believes it is curbing the lawlessness in Baghdad But the task is formidable. Since the US-led occupation of Iraq the PUK has been offering the deals once again, hoping to increase production in the area, which some sources suggest is only producing 5,000 barrels a day.Mohammed Ismail, director of the PUK’s office in Washington, said: “It is true [that we are offering contracts]. It started sounding out interest last July for production in the Taqtaq area north of Kirkuk, but found no takers. Both he and a spokesman for Shell denied that they had been in talks with the PUK.For its part, the PUK admits that it has been offering the deals. Britain’s two largest companies, BP and Royal Dutch Shell, have both expressed an interest in doing deals when a government has been established in Baghdad.”We have always said we would be interested in the prospect of investing in Iraq, but that would be when there is a stable, long-term administration there,” said David Nicholas, a spokesman for BP.

Washington is keen to use Iraq’s oil wealth to at least partly pay for the country’s rebuilding.There are few major companies that would not wish to secure deals to develop Iraq’s oil reserves, and Mr Barrows said he believed the PUK had proposed the deals to most major firms. While both Washington and London denied that oil was a factor in their decision to go to war, many of their critics, including most Iraqis, believe that a wish to secure the world’s second largest supplies played a large part in shaping the decision to opt for military action. “They are extremely favourable terms,” said Gordon Barrows, of the Barrows Company, a US-based publisher of international oil laws and contracts and the company that obtained the contract.The future of Iraq’s oil reserves, which some predictions place at up to 112 billion barrels with more to come, is one of the most contentious issues facing the US and Britain as they seek to rebuild Iraq in the aftermath of the ousting of Saddam Hussein. The initial share of profits would be split 60:40 in favour of the oil company, dropping to around 50:50 once a specified level of production is reached. Some have even suggested the proposals may be an effort by the PUK to present any new government in Baghdad with a fait accompli.Samples of the proposed “production-sharing agreements” seen by The Independent on Sunday reveal that the PUK authorities are offering investors an attractive deal. The move threatens to raise new problems over the future ownership of Iraq’s vast oil reserves.
The Patriotic Union of Kurdistan (PUK), which controls the Sulaymaniyah region as part of the regional government of Kurdish Iraq, has in recent weeks started seeking investment from international companies interested in oil exploration and production.While most companies appear wary of getting involved in deals with the regional authorities in the absence of a settled – and internationally approved – government in Baghdad, the proposed deals represent a challenge to the US-led occupying force. Kurdish authorities in northern Iraq are offering hugely lucrative oil deals to European and American companies without consulting either the US administration in Baghdad or any other Iraqi groups.

He said Mr Abbas didn’t want to give Mr Sharon a chance to fob off the Americans by saying he would meet the Palestinians and see what they could offer.. The decision to meet was tactical more than anything else.”Mr Abbas, he explained, was responding to pressure from the US Secretary of State, Colin Powell. First, let’s start moving.”Ghassan Khatib, the Palestinian Labour Minister, said after a three-hour cabinet meeting in Ramallah yesterday afternoon: “We all know Sharon is not going to give us anything new before he meets Bush. But we’re not looking for declarations, for signed documents. The Americans are expected to press Israel to begin implementing the three-phase “roadmap”, whose destination is a Palestinian state by the end of 2005.A senior Israeli official said: “This is intended as a real meeting It’s not a photo opportunity.

Both sides were looking ahead to Mr Sharon’s talks with President Bush in Washington this week. The bombing was a sharp reminder of the difficulties the two Prime Ministers face.Their summit at Mr Sharon’s Jerusalem residence last night was the highest-level encounter since the Palestinian intifada erupted in September 2000, but the meeting generated only modest expectations. The suicide bomber, disguised as an orthodox Jew, blew himself up in the centre of Hebron where 400 militant Jewish settlers live in a fortress-like enclave among 120,000 Palestinians. A Palestinian suicide bomber killed an Israeli settler and his pregnant wife in the West Bank and Israeli troops killed an armed Palestinian and injured nine in the Gaza Strip. But the meeting, aimed at resolving some of the sharpest differences over a US-backed “roadmap” for peace, was overshadowed by a fresh wave of violence.