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No Contract Freeze for ‘Committed’ Exxon, Kurdistan Minister of
Natural Resources Says |
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No Contract Freeze for ‘Committed’ Exxon,
Kurdistan Minister of Natural Resources Says
3.4.2012 |
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April
3, 2012
WASHINGTON, — Exxon Mobil Corp. (XOM)
is honoring its oil exploration contracts in the
semi-autonomous Kurdistan region of northern Iraq,
the Kurdish minister for natural resources said in
disputing a report from Iraq’s government.
Exxon Mobil, the world’s largest energy company,
hasn’t halted the agreements in Kurdistan, Ashti
Hawrami, the natural resources minister, said Monday
in an interview in Washington. Iraq’s oil minister
said Exxon Mobil confirmed in a letter April 1 that
it has frozen its contracts with Kurdistan.
“What comes
out of Baghdad
is about 90 percent, with respect, rubbish,” Hawrami
said on Monday. The regional government hears from
Exxon Mobil on an “almost daily basis,” as the
Irving, Texas-based company is “committed” to all
its contracts in the region, he said.
Tension between Iraq’s government and Kurdistan’s
leadership is mounting as the U.S. seeks to
encourage a unified Iraq after withdrawing troops at
the end of December.
Hawrami is part of a delegation to the U.S. led by
Kurdistan President Massoud Barzani, who is
scheduled to meet with Vice President Joe Biden this
week.
Alan Jeffers, an Exxon Mobil spokesman, said the
company didn’t have any comment regarding contracts
in Kurdistan. The government in Baghdad refuses to
do business with companies working in the Kurdish
region.
Halted Exports
Relations between the Kurds and Iraq’s government
soured April 1 when the Kurdistan Regional
Government, which exports crude using a pipeline
controlled by Iraq,
stopped
deliveries. The Kurdish Ministry of Natural
Resources said Iraq failed to pay about $1.5 billion
owed to oil producers since May 2011.
A dispute over oil revenues between Iraq’s
government and Kurdish authorities led to a yearlong
halt in exports from the region that ended in
February 2011.
Iraq holds the world’s fifth-biggest reserves of
crude, based on statistics from London-based BP Plc
(BP/), and it is seeking to boost shipments to
rebuild an economy recovering after years of
conflict.
“It’s a loss for Iraq if they continue with this
madness of this policy,” Hawrami said in the
interview. “It has to be resolved in a few weeks and
months ahead.”
He said the Kurds will resume the shipments when
they get “clear understanding” that Iraq will pay
for the oil.
The Kurdish region is producing about 100,000
barrels of oil a day after cutting off the
shipments, with most of the product refined and
consumed locally, Hawrami said.
Trucked Through Iraq
Some refined product is trucked through neighboring
Iran because there aren’t other routes “at the
moment,” Hawrami said. Iran is used only for transit
and the government doesn’t sell to Iran, he said.
It’s unclear whether the shipments to Iran’s ports
breach economic and financial sanctions imposed by
the U.S. and European allies.
Iraq asked Iran and Turkey to curb oil
smuggling from Kurdistan across their
territories, Iraqi Oil Minister Abdul Kareem al-Luaibi
told a news conference yesterday in Baghdad.
Most of the crude smuggled by tanker from Kurdistan
is sold at lower prices to other nations at Iran’s
port of Bandar Abbas, he said. “We have indications
and detailed reports with numbers about crude
smuggling to Iran,” Luaibi said.
Iraq only exports crude through government terminals
and “doesn’t know where the money from the oil
smuggling in Kurdistan is going,” he said. Kurdistan
produced 68.11 million barrels of oil last year, of
which 33.64 million weren’t shipped via official
channels, Luaibi said.
Iraq’s crude exports in March rose to 71.83 million
barrels, or 2.32 million a day, the most since 1980,
Asim Jihad, a spokesman for the Iraq Oil Ministry,
said. The exports generated $8.475 billion,www.ekurd.net
with an average price of $118 a barrel, he said.
Hawrami said the regional government is “not in the
business” of breaking any laws.
The Kurdistan government is seeking contractors to
build a crude-oil pipeline from Kurdistan through
Turkey, Hawrami said. Construction would start this
year and be complete by late 2013, he said.
By Roxana Tiron and Katarzyna Klimasinska -
Bloomberg
Copyright ©, respective author or news agency,
bloomberg.com
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