Iraq gets "positive" Obama response on Exxon concern

[SocalDinar]

Iraq gets "positive" Obama response on Exxon concern

Reuters

5:02 p.m. EDT, July 19, 2012

BAGHDAD/SAN FRANCISCO (Reuters) - Iraq's prime minister said on Thursday that U.S. President Barack Obama backed Baghdad's concerns over Exxon Mobil's oil deal with the Kurdistan region and had emphasized Washington's respect for the Iraqi constitution and laws.

Prime Minister Nuri al-Maliki issued the statement as U.S. oil major Chevron Corp confirmed its purchase of 80 percent of two blocks in Kurdistan in a move that may infuriate the central Iraqi government, which wants all oil deals to pass through Baghdad.

Baghdad is embroiled in a deep dispute with the autonomous Kurdish region over energy exports and has asked Obama to stop Exxon exploring for oil there, saying it could threaten stability. On Thursday it welcomed Obama's written response.

"We would like to confirm that the letter was positive and convincing and stresses its respect for the constitution and Iraqi laws, in the same manner as the Iraqi government is seeking," a statement from Maliki's office said.

"The Iraqi government will take all necessary measures in applying the law and will not allow the company to implement these contracts," it said, referring to the deals signed with Kurdistan. Exxon declined to comment.

The White House declined to comment on the content of the letter from Obama to Maliki, but did indicate some level of discomfort with the potential for ruffled relations with Iraq.

"We advise American energy companies doing business in Iraq to consider the legal risks involved in signing deals with a region, against Baghdad's wishes, and are concerned that such deals could be destabilizing," a senior Obama administration official said, speaking on the condition of anonymity.

"That said, in our economic system, private companies make their own business decisions, largely beyond the reach of government control," the official said.

An industry source familiar with U.S. oil operations in Kurdistan said the Obama administration was continuing to discourage firms from moving into the northern region, the government of which is based in Arbil.

"Washington is saying, 'This is a bad time to go into Kurdistan, given the sabre rattling between Baghdad and Arbil,'" the source said.

Kurdistan said in June that it expected more oil majors to follow Exxon in the next few months in striking deals there.

France's Total has already said it was interested in investments in the region, drawing a veiled threat from Baghdad which said French companies should avoid unsanctioned oil deals.

Exxon became the first oil major to move into the northern region in mid-October when it signed a deal with the Kurdistan Regional Government (KRG). Apart from Total, Norway's Statoil is also looking closely at KRG exploration deals, industry sources have said.

"People are looking at the commercial terms on offer in Kurdistan and they're voting with their feet," said a senior Western oil executive.

"The margins on Iraq's service contracts are slim and Arbil is offering more lucrative production sharing deals."

CHEVRON SEES "PROMISE"

Chevron, the second-largest U.S. oil company, said it sees "considerable promise" in Kurdistan. It is purchasing the Sarta and Rovi blocks from India's Reliance Industries Ltd, where it will be the new partner of Austria's OMV AG - holder of the other 20 percent interest.

Though it chose not to participate in Iraq's four oil and gas licensing rounds, Chevron said it would still monitor opportunities in both the north and south of the country. It was the first big oil company to offer Iraq technical assistance and training following the U.S.-led invasion.

"The opportunities in Iraq's licensing rounds didn't compete in Chevron's investment portfolio," said an oil industry source. "The commercial terms in Kurdistan were attractive, an opportunity presented itself and Chevron moved on it."

The U.S. major has advised Baghdad of its Kurdish deal and is in the process of setting up an office in Arbil, he said.

An Iraqi oil ministry spokesman declined to comment directly on the Chevron deal on Thursday but repeated Baghdad's warning to foreign energy companies.

"The government attitude is clear. Contracts signed outside the framework of the federal government are considered as illegal," Assim Jihad said.

Iraqi oil industry sources said Baghdad might strike hard against Chevron, going further than just barring it from oil and gas investment projects. Chevron has a contract to buy 167,000 barrels of Iraqi oil per day, which Iraq could seek to cut in protest, they said.

At the same time as punishing those dealing with Kurdistan directly, the central government could also reward other companies developing Iraq's giant southern oilfields by improving commercial terms, the sources said.

The dispute over oil exports is part of a broader clash between Iraqi Arab-led central government and the Kurdish government over territory and regional autonomy that many see as a potential flashpoint for conflict since the last American troops left Iraq in December.

OPEC-member Iraq holds the world's fourth-largest oil reserves and is expected to be a major source of future oil supplies.

Eager to rebuild its dilapidated infrastructure, it has signed a series of contracts with foreign oil companies that target total oil production capacity of 12 million barrels per day (bpd) by 2017, up from about 3 million bpd. Most analysts see 6 million to 7 million bpd as a more realistic goal.

(Additional reporting by Raheem Salman in Baghdad, Peg Mackey in London, Anna Driver in Houston and Alister Bull in Washington; Writing by Sylvia Westall; editing by William Hardy, Anthony Barker and David Brunnstrom)

http://www.baltimoresun.com/news/nation-world/sns-rt-us-iraq-oil-kurdistanbre86i1hl-20120719,0,2306284.story

[Doctor Smith]

So Maliki and the Kurds are still battling it out over the Kurds oil. Maliki is a complete (fill in the blank) and won't honor the deals he made to become Prime Minister. The Kurds and Cheveron are saying shove it Maliki we want to prosper and make money, we don't care what you want you (fill in the blank). What can you do about it Maliki?

Then Obama is taking Maliki's side? Even Bush would be better. Nothing good going on.

[Butifldrm]

Government vows to work to prevent Exxon Mobil in Kurdistan

07/21/2012 0:00

BAGHDAD - Al Sabah

, Prime Minister Nuri al-Maliki government's efforts to increase investment opportunities in the country, while the government has vowed to Exxon Mobil U.S. by preventing the implementation of oil contracts signed with the Kurdistan region. The Prime Minister met the official in his office yesterday, the first new British Ambassador to Iraq, Simon behavior, on the occasion of assuming his duties. He called on al-Maliki, according to a statement issued by his press office has received "morning," a copy of it, to the development of bilateral relations in political, economic, trade, stressing that Iraq is seeking to increase investment opportunities, particularly for British companies. To that, received the Prime Minister yesterday, the first letter written from U.S. President Barack Obama's answer to the letter sent to him on the activity of Exxon Mobil in the Kurdistan region and disputed areas. According to a statement issued by the Office of the Prime Minister said "The letter of response was positive and convincing stresses respect for the Constitution and laws of Iraq and in the same direction sought by the Iraqi government .. so we reaffirm the need for the company's commitment to their obligations and the recommendations of the Iraqi government, in addition to the recommendations of the American administration have in this regard to take a decent role in the oil industry of Iraq. " The statement stressed that "Otherwise the government will take all necessary measures to enforce the law and prevent the company from the implementation of those contracts."

extensive details page 2

http://alsabaah.com/ArticleShow.aspx?ID=31610

[unirod]

A twist on Obama's words to support Maliki's agenda. We can read..

[uncirculd]

Obama seems neutral on it. Vague is a better word. So, I think he knows they are about to take him to parliament and question him. I would love to whisper in their ears, "Lets Roll".