Kurdish President slams "failed" Iraq oil policy
Barzani says Baghdad knew of Exxon/KRG deals in advance
The President of the Kurdish Regional Government in Iraq has slammed the central government’s oil policy as a failure, as part of the continuing fallout from the announcement of the ExxonMobil contracts signed north of the Green Line.
“The oil policy in Iraq is a failed policy, I say it clearly. Ask the Iraqi people where are the oil refineries? … How many hours of electricity are available for the Iraqi citizen in the center and south? And Iraq lives on a sea of oil,” President Massud Barzani told Reuters. “If it is not a failed policy, then what is the reason?”
Barzani’s has also echoed previous reports that Baghdad were aware of the Exxon deals in advance of their signature, and raised no objection at the time.
“It is strange really, and has no meaning,” Barzani told Reuters. “For us, it doesn’t mean anything. At the first step, I sent a message to the prime minister and informed him of all the details. The answer I got back was that there was no objection… Before the signing, yes.”
Barzani also branded Baghdad’s opposition to the deals “unconstitiutitonal.”
Exxon remain silent about the deal, despite growing speculation that their entry into Kurdistan is a tactical mis-step. Despite Exxon having annual profits larger than the entire Iraqi government budget, Baghdad has not been cowed into allowing the deal to go through without protest, threatening to cancel the supermajor’s field development contract at West Qurna 1 and striking Exxon off the list of approved bidders for the fourth round of oil contracts in the south.
Exxon may be willing to lose the low-margin West Qurna 1 deal in order to tap profit oil only available in the KRG, and the legality of an attempt by Baghdad to cancel the contract is questionable.
Some analysts believe that, if Baghdad could lawfully cancel the deal, they would have done so by now, and that in any event Exxon’s role in developing West Qurna 1 and operating the $3 billion seawater injection program for the three main oilfield in the south is simply too important to derail.
Reports of Exxon’s exit from the south are already circulating, suggesting the Texan giant may jump befor e it is pushed. Russian news agency RBC Daily reports that Lukoil, Russia’s second-largest oil producer, is looking to expand its business in Iraq through buying part of ExxonMobil‘s 60% stake in the West Qurna 1 field. If the deal goes ahead Lukoil would hold 37.5% of the business.
According to RBC, Vice CEO Leonid Fedun says Lukoil is interested in developing West Qurna-1.