Iraq Mulls Lifting Bidding Ban on ExxonMobil

Iraq Mulls Lifting Bidding Ban on ExxonMobil

BAGHDAD - The Iraqi oil ministry is still considering whether to allow Exxon Mobil Corp. to bid in a new Iraqi energy licensing auction, lifting a ban that was imposed on the U.S. giant because of the deal it struck with the country's semi-autonomous Kurdistan region, Iraqi oil minister said Thursday.

"We are going to discuss this matter in the ministry and, God willing, we will take a decision," Abdul Kareem Luaiby told reporters in Baghdad without elaborating.

Iraq's Deputy Prime Minister for Energy Hussein al-Shahristani announced last month that Exxon would be banned from taking part in the country's oil-and-gas licensing auction scheduled in May this year.

Shahristani has previously said Exxon would have to choose between its deal to explore six areas in Kurdistan and its central-government contract to develop the 370,000 barrels a day West Qurna Phase 1, Iraq's second largest oil field with proven reserves of more than 9 billion barrels.

Luaiby confirmed an earlier statement that Exxon had sent a written letter to Baghdad on March 5 that it was suspending its operations in the Kurdistan region. But Kurdish officials have denied that Exxon has frozen its work in Kurdistan.

Exxon has so far made no public comments whether it has suspended its work in Kurdistan or not.

Exxon is producing around 370,000 barrels a day of oil from the West Qurna field under a service contract with the Baghdad government. Many other large oil companies including BP PLC, Royal Dutch Shell PLC, Eni SpA and Lukoil Holdings have similar contracts.

The Kurdistan Regional Government has signed nearly 50 oil-and-gas deals with international oil companies, mostly second-tier or wildcat explorers. The KRG hoped Exxon's presence would lead to other oil majors beginning operations in the region.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Jay Oatmon | Mar. 23, 2012
Bagdhad is losing its influence over the KRG because it is under pressure from the Sunni Shia rift/disagreements which look as if they will pull the rug out from under the present Bagdhad government. Bagdhad is auotcratic and rules without consensus so there will have to be a change of government in Bagdhad. I see the KRG going it alone if Bagdhad cannot accomodate them.

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