Royal Dutch Shell will not become the latest oil major to set up shop in Kurdish north. The office of Iraq’s deputy prime minister stated that, ”We don’t have any discussions with the Kurdish regional government (KRG) about working in the region.” It was said by a Shell vice president Hans Nijkamp.
Mr. Nijkamp explained it as “inaccurate” reports that the oil major was set to follow ExxonMobil into the autonomous north as per the above mentioned statement. Shell did not comment last day. A spokesperson for the KRG also refused to comment.
The KRG’s energy minister, Ashti Hawrami, declared the Kurds were in mutual understanding over deals to produce oil in the region. The world’s largest international oil company, ExxonMobil, became the first major active in Iraq to defy Baghdad & it make a sign to explore six blocks in Kurdistan.
The central government wants to say that the contracts with KRG are illegal. They are granting it autonomy over its energy resources which lead to full Kurdish independence. Kurdistan’s smaller outfits have been blacklisted in the south & Exxon was barred from the licensing round.
There were threats to eject the US company in the giant oilfields in Iraq have remained vacant. Total and Chevron got entry into the Kurdish north have gone unpunished so far. The contracts have been found by oil majors. They operate in Iraq proper are less profitable. The production-sharing contracts established by KRG more lucrative. Companies have been paid a rate that exceeds production costs, intermittent and insufficient payments.
But the central government which is in charge of all payments improved conditions for producing of Kurdish oil, according to contractual terms from next year. A national oil law would resolve the Erbil-Baghdad dispute with a creation of a working group by the members of both governments. It was not a critical strategy for shell to enter Kurdistan.
The executive director of the Iraq Energy Institute, Luay Al Khatteeb told ”Shell’s investment portfolio in the southern part of Iraq is gigantic and diverse, hence it is too risky for them to make such a move without full coordination and blessing by both parties, the federal government and the Kurdistan regional government.”
The federal authorities hindered Shell’s current business commitments although it is to be legally challenged.
Source [The National]