Iraq excludes ExxonMobil from new oil bidding

Feb 29, 2012 12:00 AM

The Iraqi government has excluded ExxonMobil from bidding to invest in the country’s southern oil fields. This decision of the Iraqi government is expected to go into effect in May.
Faisal Abdullah, the spokesperson for Hussein Shahristani, Iraqi deputy prime minister for energy affairs and former minister of oil, said, “ExxonMobil has violated Iraqi laws by signing a contract with the Kurdistan Region without referring to the central government; therefore, it will be excluded from the fourth round of investment competitions.”

ExxonMobil signed a contract in July last year with the Kurdistan Regional Government’s Ministry of Natural Resources to search and extract oil from the region’s oil fields. Shahristani has considered most of Kurdistan Region’s oil contracts with foreign companies illegal. He argues that companies must obtain permission from Baghdad before striking any deals with Erbil.
But Kurdish authorities rely on the Iraqi constitution, which allows provinces and federal regions to run their own oil and natural resources as long as the revenue is shared with Baghdad.

Asim Jihad, spokesman for the Iraqi Ministry of Oil, said, “The issue of ExxonMobil has not been settled yet, and a response from ExxonMobil to the Iraqi government is expected to clarify everything.” Jihad admitted that the issue lies with Shahristani.
“The issue of ExxonMobil is in the hands of Sharistani himself and not the Ministry of Oil,” he said. “All the decisions related to ExxonMobil and Iraq are coming directly from Shahristani’s office.”

Shahristani has previously said, “We have given ExxonMobil a final chance to reconsider its decision of signing a contract with the Kurdish region.” But according to Abdullah, the company has not responded to Baghdad’s message yet.
“ExxonMobil has not replied yet to the Iraqi government and we are waiting for their final decision. Our deadline for ExxonMobil is not open-ended. They are obliged to answer the Iraqi government in the near future,” he said.

Despite recent upheavals with Baghdad, ExxonMobil is still working in the Qurna oil fields in southern Iraq based on a contract it signed with the Iraqi government a few years back. Iraq’s Ministry of Oil says they have made final preparations for the fourth round of bidding among oil companies to win new contracts for the oil fields of Najaf, Karbala, Diwaniya and Anbar.
In the meantime, it is said that ExxonMobil has already started opening bureaus in the Kurdistan Region.

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