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Exxon Mobil (NYSE:XOM) may be set to pick sides in Iraq. Citing concerns over profitability, the company is looking to sell its 60 percent stake in a contract to develop the West Qurna-1 oil field in southern Iraq. This suggests that Exxon Mobil found the price-sharing contract with Kurdistan and an unverified 45 billion barrels in the region a more attractive offer. People with knowledge of the matter told the Wall Street Journal exploratory drilling could begin in 2013.
Steven Pryor, president of Exxon Mobil, chased the news of a $3.1 billion bid for Celtic Exploration – a deal that could come with hundreds of thousands of acres ripe with liquids-rich gas — with a talk at Lafayette College. Pryor noted that moving into the future, the demand for energy will continue to rise, and North American natural gas will play a huge role in satisfying that demand. He expects gas drilling to create 2.4 million jobs by 2035.
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Meanwhile Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B), which owns a 15 percent stake in the Qurna-1 contract, begins construction on a major new facility. The Prelude floating liquefied natural gas project gets underway as RDS is slapped with a downgrade to “Sell” from “Neutral” by Goldman Sachs, and the company’s three previous major projects mature.
After public criticism by President Ilham Aliyev about the company’s failure to deliver on production promises in Azerbaijan, British Petroleum’s (NYSE:BP) CEO Bob Dudley have met with Azeri oil officials to discuss the matter. Production at the Azeri-Chirag-Guneshli field — jointly operated with other companies such as Chevron (NYSE:CVX) and state-run SOCAR — was 684,000 barrels per day in the first half of the year, well below the projected rate of 1 million barrels per day. BP Reiterated its commitment to the country and project.
Moving along in the TNK-BP ordeal, Rosneft offers BP $28 billion in cash and stock for its 50 percent stake. If completed, the deal could put a cap on BP’s fundraising efforts related to the Deepwater Horizon disaster. BP’s total damages for the spill have been difficult to estimate, and settlements between the company and the government are as convoluted as ever. The Department of Justice is seeking $21 billion or more in damages, but what those penalties are applied under — either as Natural Resources Damages or under the Clean Water Act — will determine the real amount paid. Damages classified as Natural Resources Damages are tax deductible.
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