Tuesday, 31 July 2012, 10:03 GMT
Exxon Mobil and Chevron rebuff Baghdad's threats as Total

A view of a Chevron fuel station./PRESS PHOTO

The Kurdish Globe

Oil giant Exxon Mobil announced that it is planning to start its operations for drilling in six oil fields in the Kurdistan Region.

Chevron, the second largest American oil company after Exxon Mobil, did not take Baghdad's threats about depriving the company from exploration and investment opportunities in the central and southern oil fields into fconsideration and insists on investing in Kurdistan Region's vast oil reserves.

The company got an offer from the Iraqi central government authorities to sign a contract for drilling four oil wells in the south of Iraq, but the company directors refused the offer and announced that the Iraqi government's oil, energy and investment policies have proved a failure.

Chevron will not sign contracts with the central government
Baghdad officials would not allow Chevron to operate in the central and southern parts of the country due to the recent production sharing contracts the company has signed with the Kurdistan Regional Government (KRG).

Iraqi Ministry of Oil announced in a press release that in line with the Iraqi permanent constitution and oil ministry policies, Chevron will not be allowed to enter into any deals with the oil ministry for producing oil.

However, these threats seem to be baseless as in the past the company itself refused oil ministry offers for an oil contract.

Chevron officials, like most of the other international investors and oil companies, believe that the central government's policy for services, investment and oil contracts is an unsuccessful policy. In contrast, they have a very positive opinion about the Kurdistan Region's oil and investment policies.

Exxon Mobil starts its Kurdistan operations

Last month, Iraqi Prime Minister Nuri al Maliki sent a letter to the US President Barack Obama asking him to force Exxon Mobil to stop its operations in Kurdistan.

A few days ago, Obama sent Maliki a reply in which he suggested that these issues should be solved in accordance with the Iraqi constitution.

Although the contents of the letter have not been published anywhere, the Iraqi government officials claim that Obama has promised Maliki to stop Exxon's Kurdistan operations.

However, this claim does not seem to be true and Exxon's officials announced immediately after Obama's letter, that they are planning to commence their operations for drilling six oil wells in Kurdistan in the near future.

This announcement reiterates the idea that neither Obama has made any such promise to Maliki nor company's officials care much about Baghdad's threats.

The French Total to come to Kurdistan as well

The main objective behind the threats and punishments by the Iraqi government to these oil companies is to prevent other oil giants from entering into deals with the KRG.

The central government has been following this antagonistic policy against Kurdistan Region's oil and gas activities and claims that KRG oil deals with the international companies are illegal. But it has not succeeded to lead Region's oil policy to failure and recent contracts signed with the two international oil giants, i.e. Exxon and Chevron, prove this reality.

Moreover, it is expected that in the coming few month that the Kurdistan Region will sign a number of new oil deals with other international giants including the French Total and the Norwegian State Oil Company.

If Total enters into a contract with KRG, then the region would step into a new stage in oil sector.

An oil expert told Reuters that Chevron does not have any contracts with the Iraqi government, and hence the Iraqi government's warnings would not have any impacts on the decision of the company. The expert also added that if Total joins Exxon and Chevron in Kurdistan, a very important stage would start in the Region's oil sector, and that is due to the importance and reputation of this oil giant.