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Rick Perry urges Iraq to work with US firms as Iran sanctions waiver nears end

US energy secretary says Iraq should partner with US companies to become energy independent during visit to Baghdad
Iraq imports vast amounts of gas and electricity from Iran (AFP)

US Energy Secretary Rick Perry has urged Iraq to partner with US companies to become more energy independent, as Baghdad's waiver exempting it from US sanctions on Iran nears its end.

Perry's paradoxical comments on Tuesday came during a visit by the largest-ever US trade delegation to Iraq, which saw more than 50 US companies largely linked to the petrol or security industries attend a two-day conference in Baghdad.

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"Working together, the US and Iraq can develop Iraq's oil, gas and water industries," Perry told those in attendance.

"The time has come for Iraq to break its dependence ... on less reliable nations seeking domination and control," he said, in an apparent reference to US rival Iran.

Iraq imports vast amounts of gas and electricity from Iran.

Iraqi Prime Minister Adel Abdul Mahdi also said on Tuesday that he will send a delegation to the US to attempt to secure another exemption from US sanctions against Iran that would allow Baghdad to keep importing Iranian gas.

Iraq seeking new waiver

When Washington reimposed tough sanctions on Tehran's energy sector last month, it gave Iraq a 45-day waiver to plan how it would stop depending on imports from Iran.

"The American side is cooperating with Iraq to find solutions that would remove pressure on Iraq because the [Iranian] gas is linked to a very sensitive issue, which is electricity," Mahdi told a news conference.

Washington is seeking to roll back Iranian influence in the Middle East, including in Iraq, where it holds broad sway over politics and trade.

The US granted eight exemptions to the sanctions on Iran, a measure that US Secretary of State Mike Pompeo said at the time were handed out "only because [the recipients] have demonstrated significant reductions in their crude oil and cooperation on many other fronts".

Under US law, such exceptions can only be granted for up to 180 days.

On Tuesday, Perry said he discussed sanctions with Iraqi Oil Minister Thamer al-Ghadban and Electricity Minister Luay al-Khateeb, but did not say whether Baghdad would receive an extension to the waiver, which ends next week.

"Sanctions were mentioned; they're a reality, they're there," Perry told reporters in Baghdad after his meeting with Iraqi officials.

He also met Mahdi, who said it was "necessary to expand coordination" on oil, energy and trade between the two countries, and Iraq's president, Barham Saleh. Perry then travelled to Erbil, in Iraq's northern Kurdish region, to meet Kurdish leaders.

Iraq's electricity ministry signed MOUs this year with both Siemens and General Electric to revamp its power sector, in deals that were widely seen as part of Baghdad's efforts to wean off Iranian energy at the US's request.