Iraq Criticizes Exxon Mobil for Its Deal With the Kurds

[alp227]

Source: NYT

A deputy prime minister overseeing Iraq’s oil industry criticized Exxon Mobil on Sunday over its effort to expand into the semiautonomous Kurdish region in the country’s north.

The statement from the official, Hussein al-Shahristani, said the central government had cautioned Exxon against pursuing oil deals in Kurdistan. The government considers such agreements to be illegal until long-awaited rules can be worked that would divide revenues among Iraq’s fractious regions.

Mr. Shahristani’s office issued its statement after Exxon, whose headquarters are in Irving, Tex., became the first major international oil company to sign a contract in Kurdistan.

Exxon declined to comment, but officials in Kurdistan confirmed that a contract had been signed on Oct. 18. On Sunday, the regional energy minister, Ashti Hawrami, told reporters at an oil conference in Erbil, the Kurdish capital, that Exxon had been awarded six exploration blocks.

Read more: http://www.nytimes.com/2011/11/14/world/middleeast/iraq-criticizes-exxon-mobil-for-its-deal-with-the-kurds.html

[HysteryDiagnosis]

1. Oh shit, here we go again. I do hope they aren't eyeing another currency

for payment, that would be disastrous for them don't you know.

[PoliticAverse]

2. They prolly have enough dollars considering all the pallets we dropped... n/t

[MADem]

3. Exxon figures this will blow over and the central government has more to lose.

I would think they wouldn't make this deal if they believed that they'd get screwed down south--they've got to feel fairly confident that this will settle down eventually. Maybe they've greased the right palms?


With the deal, Exxon is wading into a dispute that has dogged Iraq since the American invasion in 2003. Oil is the source of Iraq’s wealth, and the American invasion threw control of the country’s rich reserves into question, worsening the longstanding enmity between the Kurds and other Iraqis. President George W. Bush’s administration considered Iraq’s passage of an oil law to split revenues a crucial benchmark to long-term peace.

The legal argument against any deal remains unsettled. Iraq’s Constitution allows regions to strike their own oil deals, but the central government says there is no law that spells out how that can happen.

Many smaller oil companies, including American producers like Marathon and Hunt, have signed contracts with the Kurdistan regional government. But the larger companies had held back to ensure that they retain deals in the south.

Michael Klare, a professor at Hampshire College and an authority on the Iraqi oil industry, speculated that Exxon might be betting that Iraq would not follow through on its threats of punishment, recognizing that the company’s investment elsewhere was critical to the country’s economic revival.