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Total S.A.'s future is unknown

14 Nov 2012
Christophe de Margerie, Total S.A.'s (TOT, FP.FR) chief executive said on Sunday that they are not sure if Iraq wants them to withdraw from Iraq’s southern oil field, Halfaya, inside news from the Iraqi government that doing deals with Kurdistan could damage the project in the southern part of the country. Total has recently acquired 20% interest in an oil exploration block from Canada's ShaMaran Petroleum Corp. (SNM.V, SHASF) for $48 million. They have expanded their assets there, plus a reimbursement for costs incurred from April 1 until the closing date. They are currently working on Taza. Though the country is in tense political situation, all the major oil companies like Exxon Mobil Corp. (XOM), OAO Gazprom (GAZP.RS, OGZPY) and Chevron Corp. (CVX) have ignored warning from Baghdad and got back into their work into the oil-rich region. Hussein al-Shahristani, Iraq's Deputy Prime Minister told reporters following Total’s entry into Kurdistan that Total should end its dealings with semi autonomous region or it should sell share in Halfaya, southern oil field of Iraq. Time is not specified yet for Total to take decision. Mr. de Margerie asked about it and he said, "It has not been very clear. At least we took it as not very clear". Mr. de Margerie said, "It is true it has been in the press that the Iraqi government made some statements about the fact that Total will have to choose between Kurdistan and the south but for the time being we have decided not to choose". According to our sources, despite the warnings from the central government they continued to invest in Kurdistan and sees huge potential in Kurdistan for oil exploration. Total desperately wants to remain there to keep their assets. They are in fear of the current situation which may deflate a bit. They are waiting for Baghdad’s final decision and hoping that the authorities will take a favourable decision. Some of the oil companies have been backlisted by the Iraqi authorities who have entered from signing future oil deals in south of Iraq and in the middle. Initially only medium sized companies wanted to invest in Kurdistan but after Exxon Mobil a line has been formed of big companies. Most of the international companies are ready to invest on southern Iraq and want develop all the old oil fields. Total acquired 35% interest in two oil-exploration blocks from Marathon in Kurdistan, semi autonomous region in northern Iraq, in July. Iraqi central government has blacklisted Chevron when it entered in Kurdish region. Source: [Fox Business]
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