Can Exxon Get Its Way in Iraq?
In 2011, Exxon Mobil (NYSE:XOM) ruffled some feathers when it signed an exploration deal with Kurdish officials. Kurdistan, which is an autonomous region, is sitting on a tremendous field of oil and would understandably like to sell it. But, unsurprisingly, the newly-established Iraqi central government also wants that oil money, and has laid claims to the resource.
As a result, tension is high. Iraqi’s central government has barred oil and gas companies operating within the country to sign independent deals with the Kurds. Exxon Mobil has a 60 percent interest in a massive Iraqi oil field at West Qurna-1, worth about $50 billion, and went ahead and signed a contract anyways. Exxon shares the project with other supermajors like Chevron (NYSE:CVX) and Royal Dutch Shell (NYSE:RDSA)(NYSE:RDSB).
Exxon floated its stake in the West Qurna 1 project, and so far China National Petroleum Corp. is reportedly the favorite in negotiations. But there’s a possibility Exxon will try and find a way for it to honor both contracts. The company has asked for a meeting with Iraq’s prime minister, Nuri al-maliki, in order to discuss the possibility.