| LONDON/ARBIL, Iraq
LONDON/ARBIL, Iraq Jan 23 Exxon Mobil's
top executive has met with the president of Iraqi Kurdistan
after Baghdad made the U.S. major an offer in an apparent bid to
keep it operating in the south of the country, industry sources
The meeting took place in Davos on Tuesday, a day after
Exxon Chief Executive Rex Tillerson met Iraqi Prime Minister
Nuri al-Maliki and asked whether the U.S. major could stay in
the south despite signing deals with the Kurdish region.
Last year, Exxon offered to sell its stake in the huge
southern West Qurna-1 oilfield after fighting with Baghdad over
its contracts with autonomous Kurdistan, deals which the central
government in Baghdad rejects as illegal.
"Baghdad wants to lure Exxon in. Will they bite?" said one
oil industry source.
Another Western oil executive from a company involved in the
south said Exxon would likely need to see improved conditions on
its West Qurna deal to stay in the south.
Any change in Exxon's position would be a major win in
favour of Baghdad in the bitter dispute over oil between Iraq's
government and Kurdistan that is straining Iraq's uneasy federal
A statement on the website of the Kurdistan Regional
Government (KRG) said Tillerson met with President Masoud
Barzani to discuss the company's operations, without giving any
Exxon was the first major oil company to test the waters by
signing for six blocs with the Kurdistan Regional Government
(KRG) in 2011, upsetting Baghdad which says only the central
government has the right to oilfield deals and to control
exports of the OPEC member's crude.
"You don't engage at CEO level unless there is something
substantial on the table," a chief executive of a rival oil
company operating in the south said.
Iraq has been clear in the past that foreign oil companies
operating in the south should give up their contracts with the
Kurdish region or risk losing assets in the rest of Iraq.
It was not clear whether Baghdad's offer was conditional on
Exxon putting its Kurdish assets on hold, and further details
were not immediately available, but Iraq's oil minister hinted a
week ago that sweeter terms could be on offer.
"We wish Exxon would stay and work with us. When we talk
about West Qurna, we are talking about double of what is going
to be achieved in the Kurdistan region," Abdul Kareem Luaibi
told Reuters in an interview.
"We have started our preparations for the fifth licensing
round, which is going to be with completely different contract
shapes that are going to be very attractive to the oil
Oil majors have been lured north by better contract terms,
security and an easier working environment compared with the
bureaucracy and infrastructure bottlenecks which hamper oil
projects in the rest of Iraq.
Iraqi officials said late last year that China National
Petroleum Corp, or CNPC, had emerged as the favourite in
negotiations to take over Exxon's 60 percent stake in the $50
billion West Qurna-1 project.
Iraq's central government and the KRG have long feuded over
control of oil revenues, oilfields and territory, but the Exxon
talks come with the country caught in a crisis over
power-sharing among Shi'ite Muslims, Sunnis and ethnic Kurds.
Any Exxon offer from Baghdad would emerge at a time when
Shi'ite premier Maliki is struggling to manage increasing
political pressure from Sunni street protests that have
complicated his government's fight with Kurdistan.
While Iraq's government says it alone has the legal authority
to export crude and sign deals, Kurdistan says its right to
grant contracts and ship oil is enshrined in the constitution.
Attempts to resolve the dispute have failed in part because
of disagreements over a long-delayed oil and gas law meant to
set a clearer framework for managing the world's fourth largest