The United States said Monday that oil companies should not bypass Iraq’s central government after authorities in the autonomous Kurdish north signed dozens of deals with foreign energy firms.
“With regard to our own companies, we continue to tell them that signing contracts for oil exploration or production with any region of Iraq without approval from the federal Iraqi authorities exposes them to potential legal risk,” State Department spokeswoman Victoria Nuland told reporters.
The United States has told companies that “obviously they’ll make their own business decisions, but unless and until we have federal legislation in Iraq governing these things — something that we’ve been urging — that there are risks for them,” she said.
Companies including Chevron and ExxonMobil from the United States, France’s Total and Russia’s Gazprom have signed deals with Kurdistan, whose relations with Baghdad have deteriorated due to oil contracts and other disputes.
The central government insists that all contracts are illegal if they did not go through the federal oil ministry.
Earlier this month, Iraq gave Total an ultimatum to end dealings with the Kurdish region or sell its stake in a giant southern oilfield.
Meanwhile, Canadian oil company says French oil giant Total has bought its minority share in an exploration block in Iraq’s northern self-ruled Kurdish region, ignoring Baghdad’s objections about direct deals with the Kurds.
Total confirmed the deal on Tuesday without giving details.
In other news, Italian oil and gas group Eni does not plan to compromise its business in Iraq by making energy deals with the country’s semi-autonomous Kurdistan region, Eni Chief Executive Paolo Scaroni said on Monday.
State-controlled Eni, together with US-based Occidental Petroleum Corp and South Korea’s KOGAS, has a 20-year deal with Iraq to develop the Zubair oilfield, which is expected to produce 400,000 barrels per day in 2013.
Elsewhere, Heritage Oil Plc will sell part of a gas block and borrow money from Genel Energy Plc to raise $450 million, easing concerns about how it will fund oilfield purchases in Nigeria.
LONDON: Iraq’s oil exports from its southern ports have risen by 30,000 barrels per day (bpd) so far in August versus last month, according to shipping data tracked by Reuters, putting shipments on course to reach a post-war record.
Exports from Iraq’s south have averaged 2.25 million bpd in the first 20 days of August, the data shows. That is up from 2.22 million bpd in July — the highest since before the 2003 US-led invasion, according to the International Energy Agency.
Iraq exports most of its oil from the south, where the opening of new export outlets and investment by foreign companies are increasing shipments which had stagnated for years.
A rise in Iraqi supplies this year helped to keep a lid on prices as Western sanctions targeted Iran’s exports.
More oil is coming from the oilfields of southern Iraq including Rumaila, led by BP ; West Qurna-1, run by Exxon Mobil ; and Zubair, where Eni is in charge.
In addition, an Iraqi official said in July the Halfaya field operated by China National Petroleum Corp was pumping at least 80,000 bpd, helping to boost flows.
Including about 300,000 bpd of crude shipped from Iraq’s north, Iraq said its exports reached 2.52 million bpd in July. Low northern exports may limit the increase in overall Iraq supply in August.
Iraq was exporting about 400,000 bpd from the north earlier this year until the government of Iraq’s Kurdistan region said in April it was halting flows because firms operating there were not getting paid by the central government in Baghdad.
Crude produced in Kurdistan is fed into Iraq’s Kirkuk export stream. A Kirkuk loading programme scheduled just 197,000 bpd of shipments in August, although after it was issued the Kurdistan region restarted exports at 100,000 bpd in a bid to end the payment dispute.