Iraq blocks Exxon from 4th licensing bid

February 13, 2012 | Licensing & Concessions, Middle East

Iraqi_PM_Nouri_al-malaki

U.S. oil giant Exxon Mobil Corp. won’t be allowed to take part in Iraq’s fourth licensing auction scheduled in May because it signed deals with the semi-autonomous region in Kurdistan, a spokesman for Iraq’s Deputy Prime Minster for Energy Hussein al-Shahristani said Monday.

“The Iraqi government has decided that Exxon won’t be allowed to participate in the next oil and gas bidding round,” Faisal Abdullah said.

The Iraqi Kurdistan region signed a deal Oct. 18 with ExxonMobil for it to explore six areas, but top officials in Baghdad regard any contracts that weren’t signed with the central government as invalid.

Mr. al-Shahristani has said the U.S. oil major would have to choose between its Kurdish deal and a contract to help develop production at southern West Qurna-1, the country’s second-biggest field.

“We are still waiting for Exxon to answer our letters in which we warned that it has to choose between contracts in Kurdistan and those in southern Iraq,” Mr. Abdullah said, adding that in light of Exxon’s reply the Iraqi government would make a decision regarding its contract in the south.

Iraq is planning to auction 12 exploration blocks distributed in various parts of Iraq. Seven of them are believe to contain gas with the remaining five are thought to deposit crude oil.