Iraq asks Obama to halt Exxon’s Kurdish deal

www.reuters.com

June 19 2012

BAGHDAD/LONDON, June 19 (Reuters) – Iraq has asked U.S. President Barack Obama to stop Exxon Mobil exploring for oil in its autonomous Kurdistan region, saying the U.S. company’s actions could have dire consequences for the country’s stability.

An aide to Iraqi Prime Minister Nuri al-Maliki told Reuters of a letter the premier had sent, seeking Obama’s intervention, as Kurdistan said on Tuesday it would sign more deals with majors to raise its output five-fold.

Turkey also signalled it was prepared to import oil directly from Kurdistan, potentially defying Baghdad, which has a long-running dispute with Kurdistan over oil export controls.

Exxon angered Baghdad last year by signing an exploration deal with the Kurdistan Regional Government (KRG) in the north, which the central government deemed illegal.

“Prime Minister Nuri al-Maliki explained to President Obama in the letter sent this month the dire consequences of the Exxon deal and its negative impact on Iraq’s stability,” Maliki’s media adviser Ali al-Moussawi said.

Since the last U.S. troops withdrew from Iraq in December, disputed areas between Kurdistan and Baghdad have been seen as a potential flashpoint for conflict as tensions between the two regions rise, without the buffer of a U.S. military presence.

Iraq’s oil minister said in April that Exxon had written to Baghdad informing it that it had suspended work in the Kurdish region.

“Despite Exxon’s letters about the freezing of their work in the region, we still receive information that suspicious work is going on relating to their exploration activities,” Moussawi said.

“The point of the message was clear. The U.S. administration must intervene,” he added.

KURDISTAN SAYS OIL MAJORS CIRCLING

Kurdistan announced in November the signing of a deal for six exploration blocs with Exxon, the first major oil company to deal directly with the Kurds in northern Iraq.

Iraqi Kurdistan, which has its own government and armed forces, has already clashed with the central government over autonomy and oil rights, and halted its crude exports in April after accusing Baghdad of not making due payments.

On Tuesday, Kurdistan’s natural resources minister said it expects more oil majors to follow Exxon in the next few months and that oil shipments would resume.

“The market is very buoyant in Kurdistan. We have a lot of majors circling around looking at new PSCs (production-sharing contracts) and certainly mergers and acquisitions,” Ashti Hawrami told an energy conference in London.

“So in the next few months, we expect to see another two or three major companies coming and working in Kurdistan.”

Exxon is one of the oil majors participating in massive projects in central Iraq, which is due to become the biggest source of additional oil for world markets in the next decade.

Click here to read full article

Comments are closed.