An Iraqi Kurdish minister on Sunday sought to allay the Baghdad government’s concerns about an oil exploration deal his region signed with ExxonMobil, saying it benefits the whole country.
Iraq’s central government regards any oil contracts not signed with it as invalid, and officials have said the deal the US energy giant agreed with Kurdistan last month jeopardises its contract for a massive southern oil field.
“I think that ExxonMobil’s entry to Kurdistan is not just good news for the Kurdistan region, it’s good news for all of Iraq, because they bring in more investment into Iraq, into this part of Iraq,” Ashti Hawrami, Kurdistan’s minister of natural resources, said at a conference in Arbil.
The contract “was signed, completed on the 18th of October 2011, after the oil and gas council of the region, headed by the prime minister, met and approved a package for ExxonMobil,” said Hawrami.
“It is a binding contract; it involves six exploration areas,” he said, adding it is up to Exxon whether it runs all its operations from Baghdad, or sets up another office in Kurdistan.
“We don’t mind where they run their operations from — they (can) run Kurdistan from Baghdad, or set up a separate office here,” he said.
The central government has strongly condemned the Exxon deal.
“The Iraqi government will deal with any company that breaks the laws in the same way that it has in (the) past and ExxonMobil has been notified of this,” the office of Hussein al-Shahristani, Iraq’s deputy prime minister for energy, said Saturday.
In the past, Iraq has banned all oil companies that have signed contracts in Kurdistan from taking part in tenders or contracts for fields elsewhere in the country.
In January 2010, Iraq’s oil ministry completed the deal with ExxonMobil and Anglo-Dutch giant Shell to develop production at West Qurna-1, which with reserves of about 8.5 billion barrels is the country’s second-biggest field.