Iraq May Bar Exxon From Oil Auction If It Pursues Kurdistan Deal

Iraq may prevent Exxon Mobil Corp. from bidding in a new energy exploration round if it refuses to rescind agreements with the country’s semi-autonomous Kurdish region, according to a spokesman for Deputy Prime Minister for Energy Affairs Hussain al-Shahristani.

“Iraq will ban Exxon Mobil from taking part in the fourth round if it persists in its position to make deals with the Kurdistan Regional Government,” Faisal Abdallah said in a telephone interview in Baghdad today. He confirmed that Iraqi authorities had not yet taken a final decision on the matter.

Iraq is waiting for Exxon to “take the right decision” and rescind the contract it signed with Kurdish authorities, Shahristani said in an interview yesterday. He called Exxon’s agreement with the Kurds illegal.

Iraq’s central government has so far refused to recognize production-sharing agreements between foreign companies and Kurdistan, home to about 40 percent of Iraq’s 115 billion barrels of reserves. The central government insists on service contracts with foreign companies and that it needs to pre-approve agreements concerning the country’s energy resources.

Exxon, which has not commented publicly on the matter, operates with Royal Dutch Shell Plc in southern Iraq at the West Qurna field, one of the nation’s biggest.

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