* Iraq tells Exxon must chose Kurdistan or southern
* Exxon should make a final decision in few days
By Ahmed Rasheed
BAGHDAD, Jan 27 Iraq has told Exxon Mobil
it must choose between working in its southern oilfields
or in Kurdistan, and Baghdad expects the U.S. oil major to make
a final decision in a few days, its oil minister said on Sunday.
"We made it clear to Exxon in the last meeting that the
answer we expected from them is either to work in the Kurdistan
region or to work in southern Iraq," Oil Minister Abdul Kareem
Luaibi told reporters.
"Exxon Mobil cannot work in both fields at the same time."
Exxon was the first major oil company to sign agreements
with the government of the autonomous Kurdistan region in the
north, a move that increased tensions between Baghdad and the
Kurds in a long-running dispute over oil, territory and
Baghdad says any deals signed with Kurdistan are illegal,
but the government of Kurdistan says the constitution allows it
to sign oil agreements without permission from the central
Exxon's chief executive met with Iraqi Prime Minister Nuri
al-Maliki and with Kurdistan's president last week to discuss
operations in both, while industry sources said the U.S. oil
major was mulling an offer from Baghdad.
Iraqi officials said at the time that Exxon was moving in
the right direction in its policy, but Kurdistan also said the
company remained committed to its Kurdish deals.
The feud between Baghdad and the Kurdistan enclave, which
has run its own regional administration and armed forces since
1991, has escalated since the KRG began signing deals with oil
majors such as Exxon and Chevron.
These deals have also prompted the central government to
warn companies they risk losing their assets in the southern
part of the country.
"Other oil companies that signed deals in Kurdistan region
should face the same scenario, and we have informed them,"
EXPORT CAPACITY, EXPLORATION
Luaibi also said Iraq had expanded crude export capacity at
its southern terminals on the Gulf, with the start of
simultaneous loading from two offshore Single Point Moorings
(SPMs), a significant step toward moving its expected increase
"Today vessels have started to load crude from the two
Single Point Moorings at the same time, and that should
remarkably expand our export capacity," said Luaibi.
The minister spoke at the signing of a final exploration and
development contract with a Kuwait Energy-led group, part of
Iraq's drive to attract more foreign investment to upgrade its
oil and gas sector.
The contract provides rights to explore and develop oil
block 9, which is located in Iraq's southern Basra province.
Kuwait Energy will be the operator with a 70 percent working
interest, and Dragon Oil PLC will hold 30 percent.
"Block 9 contains substantial reserves of oil and gas, and
we have committed (that) $125 million will be invested at the
initial stage of exploration over the next two years," Manssour
Aboukhamseen, Kuwait Energy's chief executive, said at the
OPEC member Iraq is expected to be the world's biggest
source of new oil supplies over the next few years. It plans to
open up more rounds of auctions for oil and gas blocks.
"We are preparing now for a fifth bidding round for the
exploration and development of new blocks across Iraq," Luaibi
A handful of international companies won bids last May at
Iraq's fourth auction, which had a poor showing because of tough