Iraqi Prime Minister Nuri al-Maliki has asked U.S. President Barack Obama to intervene to stop Exxon Mobil from proceeding with a deal with the Kurdistan region that he warned would have dire consequences for Iraq's stability, an aide said.
The U.S. oil major angered Baghdad last year by signing an exploration deal with the Kurdistan Regional Government (KRG 0.00%, news) in the north, which the central government deemed illegal.
Since the last U.S. troops withdrew from Iraq in December, disputed areas between autonomous Kurdistan and Baghdad have been seen as a potential flashpoint for conflict as tensions between the two regions rise, without the buffer of a U.S. military presence.
"Prime Minister Nuri al-Maliki explained to president Obama in the letter sent this month the dire consequences of the Exxon deal and its negative impact on Iraq's stability," Maliki's media adviser Ali al-Moussawi told Reuters on Tuesday.
Iraq's oil minister said in April that Exxon had written to Baghdad informing it that it had suspended work in the Kurdish region.
"Despite Exxon's letters about their freezing of their work in the region, we still receive information that suspicious work is going on relating to their exploration activities," Moussawi said.
The KRG announced in November the signing of a deal for six exploration blocs with Exxon, the first major oil company to deal directly with the Kurds in northern Iraq.
Exxon is one of the oil majors participating in massive projects intended to make Iraq the world's biggest source of new oil over the next few years, but the U.S. company's decision to sign a deal with the KRG has infuriated Baghdad.
Exxon was banned by the central government from competing in the country's fourth bidding round because of the deals it had signed with Kurdistan to explore in their region and some disputed areas.
"The point of the message was clear. The U.S. administration must intervene," Moussawi said.
Maliki met with Exxon during his visit to the United States in December and explained to the company that its deal with Kurdish authorities violated the law and could generate serious problems, Moussawi said.
"Offering Exxon an exploration deal without central government knowledge and approval has been and will stay illegal," Moussawi said.
Iraqi Kurdistan, which has its own government and armed forces, has already clashed with the central government over autonomy and oil rights, and halted its crude exports in April after accusing Baghdad of not making due payments.
Frustrated by the long-standing disputes with Baghdad, Kurdistan has started plans to start exporting its crude oil along a new pipeline to the Turkish border by August 2013.
Kurdistan's energy minister said on London on Tuesday that the autonomous region expects more oil majors to follow Exxon in the next few months in striking deals. Exxon is keeping a low profile and has declined to comment. But industry sources say the company has issued a tender for drilling rigs.