Washington behind Baghdad on oil issue

[Stillw8n]

Washington behind Baghdad on oil issue

DUHOK, Dec. 1 (AKnews) – Washington supports Baghdad’s position regarding Exxon Mobil Corp.’s oil contracts with Kurdistan Region a Representative from the Kurdish Blocs Coalition in the Iraqi Council of Representatives said Wednesday. He added pressures on the company will make it respond to Baghdad eventually.

Mahmoud Othman told AKnews the measures the Iraqi government has taken towards Exxon are political and not economic. He said Baghdad believes this company is important, and must choose whether to work with Kurdistan region or Baghdad.
“The U.S. position is bad towards Kurdistan…Preventing Exxon Mobil Corp. from operating in the region will make losses for Iraqis in general, including the people of Kurdistan, because the revenues of the extracted oil from Kurdistan goes to the treasury of the federal government.”

In an article last week Javier Blas, commodities correspondent for the Financial Times, said Exxon’s move north into Kurdistan flew in the face of conventional wisdom that “the U.S. interests of ‘Big Oil’ and Washington go hand-in-hand”. The U.S. state department were caught unawares by the corporation’s northern adventure that was taken it would seem contrary to strong advise from the U.S. government.

The Iraqi Oil Ministry said last week that it will prevent Exxon from participating in the fourth licensing round, the big auction of oil contracts, if it decided to implement the six contracts concluded with the Kurdistan Regional Government.

The tension increased recently between the governments of Baghdad and Erbil after the KRG rejected a draft Oil and Gas Law approved by the Iraqi government in August. The region believes the draft law gives too much power to the Federal Government to manage its oil wealth and would be at the expense of the region.

In the past Baghdad has prevented companies operating in the Kurdistan Region from participating in licensing rounds to develop Iraqi oil fields. Other supermajor oil companies working in southern Iraq, like BP and Royal Dutch Shell, have held off from moving into Kurdistan Region for fear of antagonizing the Iraqi government.

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