Exxon Mobil May Be Barred from Iraq's Energy Exploration Auction

By MarEx 2012-02-13 11:41:07

Bloomberg reports that Iraq may prevent Exxon Mobil Corp. from bidding in a new energy exploration auction if the company refuses to withdraw agreements with the country’s semi-autonomous Kurdish region. The oil-and-gas licensing auction is scheduled for May.

Although Iraqi authorities have not yet made a final decision on the matter, officials have made it clear that they will ban Exxon Mobil from taking any part in the fourth round of the oil auction if it continues to make deals with the Kurdistan Regional Government. They are still waiting for Exxon Mobil to make the decision and void contracts signed with the Kurds, which they claim to be illegal anyways.

Iraq’s government has refused to recognize production-sharing agreements between foreign companies and Kurdistan, which holds about 40 percent of Iraq’s 115 billion barrels of oil reserves. The country’s central government insists on service contracts with foreign companies and on pre-approving agreements regarding the nation’s energy resources, according to reports.

Exxon has not commented publicly on this matter. The company operates in southern Iraq at the West Qurna field.