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Western Oil Firms Face a Balancing Work as Iraqi Company Booms


18 Nov 2012
Iraq has become the second-largest country of the firm for Petroleum Exporting. Thus, Iraq has overtaken Iran. And now Iraq is after Saudi Arabia. Thus, a question comes in mind, whether other nations which produce oil will require trimming their generation to adapt this much rising. But further tensions are obvious between the Kurdistan Regional Government and the Baghdad’s federal government. The Kurds are settled not only to develop their oil resources but also to control their self freedom from Baghdad. Baghdad demands assertively to allow access to the natural oil resources of the country only the federal government’s authority. However, the Kurds are gaining success to attract a few of the top class oil firms in the world. The deputy prime minister of Iraq, Hussain al-Shahristani has been serving as instrument in making written agreement to restore the life of oil fields in Iraq. On 13th November, he announced that in an initial project of Iraq about the West Qurna 1oil field, the Exxon Mobil was in a great level of maintaining a 60 percent sale of its stake to the oil buyers who are approved by the government of Iraq. Iraq and Exxon have been in disagreement since Exxon firm registered with a deal of exploration with the government Kurdistan the previous year. Shahristani expressed that Baghdad does not identify the existence of contracts between Kurdish and the oil firms. But, Patrick McGinn, a spokesman of Exxon Mobil, refused to comment. Shahristani told the oil giant of France that they must either choose to sign their contract with the federal government or they are breaking laws of their contract with Iraq. As stated by a consulting firm in Edinburgh, Wood Mackenzie, under the contracts with Kurdistan, oil firms can have income of $3 to $5 per barrel. But they earn mostly $1 per barrel under Iraqi federal government contracts. Till now, the major companies have been settling deals of exploration with Kurdistan. They have not been signing production contracts. A bright future Kurdistan is working hard to achieve 200,000 barrels a day. But, southern Iraq is exporting 3 million barrels per day of its oil production. For that why, southern Iraq is playing more vital role for the global oil wealth in this time. However, the Kurdistan exploration is yet at initial stage as it has started in 2003. The success of Kurdistan in attracting the major oil firms does suppose to effect in Baghdad. Companies like these contracts that Baghdad has provided so far. Shahristani, at the conference, said that Iraq would have problem replacing Exxon Mobil. He said that important international firms were interested. Iraq’s steps could endanger ambitions of Baghdad to make triple of its recent level of outcome on oil. Iraq is an OPEC member. Till now, it does not have a share to be contributed for recognizing its requirements for profit to rebuild. Shahristani announced that at a point time Iraq had gained 4 million to 5 million barrels per day (mbpd), it could begin talking about its generation with other members of OPEC. Source: [The Bulletin News]
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