ExxonMobil Speaks Out on Iraq’s Kurdistan Negotiations

Exxon Mobil Corp. confirmed it negotiated last year exploration and production contracts with Iraq’s Kurdistan Regional Government.

“Exploration and production activities in the Kurdistan region of Iraq are governed by production sharing contracts negotiated with the regional government of Kurdistan in 2011,” Exxon said in its 10-K filed with the Securities and Exchange Commission Friday.

The company said the exploration term is for five years with the possibility of two-year extensions, while the production period is 20 years with the right to extend for five years.

The confirmation comes after months of silence by Exxon, which had declined to comment on remarks made by the Kurdistan Regional Government, or KRG, which had said the company signed the deals.

The move has infuriated Iraq’s federal government, which considers as invalid any deals signed with the KRG, which in turns states that any and all deals it has signed comply with the country’s new constitution.

Some of the blocks in the Exxon-KRG deal are in a hotly contested oil-rich territory claimed by both the central government and the KRG, stretching from the Iranian border to the east and to the Syrian border in the northwest.

Early this month, Iraq’s federal government said Exxon Mobil will be blocked from participating in the fourth licensing round in Iraq.

Baghdad has blacklisted companies that maintain deals with the Kurds, excluding them from working elsewhere in Iraq. Among those is New York-based Hess Corp., which was barred last year from competing in the fourth energy auction.

Source: Dow Jones & Rigzone


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