Iraq’s PM Maliki holds talks with chief of disputed Exxon

BAGHDAD - Agence France-Presse

Iraq, one of the leading oil producers of the world, is struggling to develop its unproductive fields that are outdated and destroyed by the years of war and civil unrest in the country. AP photo

Iraqi Prime Minister Nuri al-Maliki held talks with ExxonMobil’s chief on Jan. 21, a rare meeting with the U.S. energy giant whose disputed deal with the autonomous Kurdistan Regional Government (KRG) in the north has drawn Baghdad’s ire.

Nuri al-Maliki also appeared to once again rule out production-sharing deals that Exxon has signed with the KRG, arguing that Iraq’s substantial oil reserves “belong to all Iraqis,” an oft-cited phrase in Iraq’s constitution that central government officials see as justifying per-barrel service fees.

 The meeting was the first between Maliki and Exxon chief Rex Tillerson since the firm signed an agreement in October 2011 for oil exploration with the KRG, angering the central government, which has said the US company must choose between its deals with Baghdad and with the autonomous region.

‘Partners across Iraq’

“Iraqis are partners in the oil that is discovered in any part of Iraq, they cannot be partners in Basra and not partners in other areas,” Maliki said, according to his office, referring to Iraq’s southern oil-rich province.

The statement said Tillerson voiced keenness for Exxon to “continue its work and expand in Iraq” with the U.S. firm’s chief also apparently mentioning “important decisions in this area” that would be taken, though no further details were provided.

Exxon and Anglo-Dutch giant Shell completed a deal in January 2010 to develop production at West Qurna-1, an oil field in south Iraq, but late last year, the American company informed Baghdad that it wanted to sell its stake in the project, indicating it would focus on the controversial KRG deal.

The central government earlier this month warned Ankara-based Genel Energy, an explorer in northern Iraq which has started direct oil exports to Turkey for the KRG.

“I don’t think Exxon Mobil will give up West Qurna easily, and if they are forced to, they certainly don’t want to burn all bridges behind them,” Ruba Husari, editor of the www.iraqoilforum.com website, told AFP.

“Hence their request to meet with the Iraqi PM to communicate their decision directly to him.” The Exxon dispute is one of several between Baghdad and Arbil. The central government also regards other contracts signed by the KRG to be illegal because they were not expressly approved by the federal oil ministry. A row over payments stemming from that dispute pushed Arbil to slash oil production in December.

Despite the drop-off in December, Iraq nevertheless brought in $94.03 billion in oil revenues over the course of 2012, a 13 percent increase compared with the previous year, largely on the back of continually increasing exports.

The country has sought to boost production and exports dramatically in recent years in order to provide much-needed income to fund the reconstruction of its conflict-battered economy and infrastructure.

Iraq has proven reserves of 143.1 billion barrels of oil and 3.2 trillion cubic meters of gas, both of which are among the largest in the world.