Government officials in the Kurdistan Region say that American oil giant Exxon Mobil continues to work in the region despite an earlier claim by the Iraqi government that its contract with Kurdistan had been frozen.
The Kurdistan Regional Government (KRG) announced in November of last year that Exxon Mobil had signed a contract to search for oil in six fields. This angered Iraqi officials who tried to force the oil company to cancel the deal.
This is the first time Kurdish officials formally announce that the oil giant is honoring its contract and that the search for oil is going on in six marked oilfields.
A high-ranking official at the KRG Ministry of Natural Resources, with up-to-to-date information on all the contracts, told the Kurd news Rudaw on condition of anonymity, “The statements of Iraq’s minister of oil are baseless and ExxonMobil is actively working in Erbil and several other areas in the Kurdistan Region.”
Iraq’s Minister of Oil Abdulkarim Liebi said last week that Exxon Mobil sent a letter to Baghdad stating that it had suspended its contract with the Kurdistan Region.
“On March 5, we received a letter from Exxon Mobil about the end of its contract with the Kurdistan Region,” said Liebi.
Following this statement by the Iraqi oil minister, chief of staff of the president of the Kurdistan Region, Fuad Hussein, said, “We don’t think the words of Iraq’s minister of oil are true. They are only the words of the oil minister himself.”
For his part, Exxon Mobil Chairman Rex W. Tillerson said in a panel in New York on March 8 that his company honors its contracts with both the Iraqi government and the KRG.
The official at the KRG Ministry of Natural Resources said, “That is the strongest evidence that the Iraqi government isn’t telling the truth and that the letter they are talking about is imaginary.”
“Some officials in Baghdad are playing a political game to save their own face and hide their political failures,” he said.
The Iraqi government stipulates that oil companies must consult and receive permission from Baghdad before signing any deals with the Kurdistan Region. But Kurdish officials maintain that the KRG has so far signed 47 oil contracts with foreign companies without referring to Baghdad.
Senior Iraqi officials, among them former Minister of Oil Hussein Shahristani, oppose KRG’s oil deals and readily declared Exxon Mobil’s contract null and void last year.
Immediately afterwards, Baghdad threatened that if the oil giant did not freeze its deals with the KRG, it would be barred from Iraq’s oil bids and its existing contracts would be revoked.
But the official at the KRG Ministry of Natural Resources said, “Nowhere in the constitution does it say that Baghdad has sole control over the country’s oil and gas, and even Shahristani himself reiterated that fact to American diplomats in 2006.”
A leaked document on the whistle-blowing website WikiLeaks shows a conversation between Shahristani and a diplomat from the U.S. Embassy in Baghdad in 2006 where Shahristani says Article 111 of the constitution should be modified to allow Baghdad to control all of Iraq’s oil and gas sector.
The Iraqi constitution stipulates that the country’s federal regions can drill and export their own oil and gas independently given that the revenue is shared with the capital, Baghdad.
Ali Balo, a former member of Iraqi Parliament’s oil and gas committee, told Rudaw, “There is no way ExxonMobil would let go of its contracts with the Kurdistan Region. First of all, because the deals are lucrative, and second because the region is rich with oil and gas.”
