It is probably merely coincidental that Exon Mobil boss Rex Tillerson just recently sat down to mend fences with Iraq's prime minister.
Middle east online reports, "The meeting was the first between Maliki and Exxon chief Rex Tillerson since the firm signed an agreement in October 2011 for oil exploration with Kurdistan, angering the central government, which has said the US company must choose between its deals with Baghdad and with the autonomous region." Exon had pissed off the Iraqis by signing a seperate deal with Kurds running their area of Iraq. Baghdad and the Kurds have been at loggerheads for years over rights to develop Iraq's vast oil wealth, but tensions have been on the rise in recent months. The Kurds, who have their own armed forces, have signed dozens of deals with foreign oil companies since the 2003 U.S.-led invasion.
While in town to visit the PM, the Exon Chief spent some time with U.S. Ambassador Robert S. Beecroft, too. Probably just wanted to chat about the kids or something.
Oh, by the way Iraq announced Sunday it has, "... has discovered deposits of crude equivalent to one billion barrels of oilafter the first exploration work by state-owned firms in almost 30 years."
The Economic Times writes:
The deposits were found after exploration in Maysan province, in southern Iraq near the border with Iran, and could potentially make a significant addition to Baghdad's already substantial reserves.
"Exploration began in Maysan, south of (provincial capital) Amara" last year, oil ministry spokesman Assem Jihad told AFP.
"Today, it completed 100 per cent and achieved a big success.
"The initial assessment from this discovery is about one billion barrels of oil," he said, adding: "It will increase production capacity for (state-owned) Maysan Oil Company."
The Iraqi government said on Monday that Exxon Mobil had asked Iraq’s prime minister if it can keep running a huge southern oilfield despite disagreements over rival contracts signed with the country’s autonomous Kurdistan region.
The Iraqi Turkmen Front News Portal (ITC) says,
...the meeting may suggest Exxon is testing its room to balance investments with OPEC-member’s central government and those with the self-governed Kurdistan region.
“The prime minister’s answer was clear to the head of Exxon that they can’t keep operating on both deals at the same time and they should observe Iraq’s laws.”
Iraqi officials had said late last year that China National Petroleum Corp, or CNPC, had emerged as the favourite in negotiations to take over Exxon’s 60 percent stake in the $50 billion the West Qurna-1 project.
Of course, all these things happening at about the same time are merely coincidental because who cares about oil and all that money anyway?
The following is from Grist.
Exxon makes up with Iraq just in time for the discovery of a billion barrels of oil
Tensions between the semiautonomous Kurdish region in northern Iraq and that country’s government are high — in large part thanks to oil. ExxonMobil’s recent agreement to explore drilling within Kurdish territory sparked a ferocious response from Iraq. One military officer suggested that exploration would be “a declaration of war.”
It’s no secret what prompts such fury. There’s an enormous amount of money in the Iraqi oil fields; some of those disinclined to be generous to our former president suggest that opening Iraq’s oilfields to American companies was a motive for Bush’s initial invasion of the country. Both Kurdish and Iraqi leaders would like to maintain control over those inky streams of money, reinforcing ExxonMobil’s tricky position.
Last week, ExxonMobil CEO Rex Tillerson sat down with Iraqi Prime Minister Nouri al-Maliki in an effort to repair relationships between the two. It’s an important consideration. When Chevron announced an extraction deal in Kurdistan, Iraq banned the company from exploration elsewhere. From the Associated Press:
Iraq announced the meeting between Prime Minister Nouri al-Maliki and Exxon Chairman and CEO Rex Tillerson in a brief statement following the talks in Baghdad. It offered few specifics, saying that the men discussed the company’s activities and working conditions in Iraq.
Tillerson said Exxon was eager to continue and expand its work in Iraq and “will take important decisions in this regard,” according to the statement. …
A spokesman for the Kurdish regional government, Safeen Dizayee, downplayed the significance of Monday’s meeting.
“What is important is the results of this meeting, not the meeting itself,” he said. “We have not seen any change in Exxon Mobil’s policies regarding its work in Kurdistan.”
Another recent announcement provides additional incentive for ExxonMobil to mend fences. From Agence France-Presse:
Iraq said on Sunday it has discovered deposits of crude equivalent to one billion barrels of oil after the first exploration work by state-owned firms in almost 30 years.
The deposits were found after exploration in Maysan province, in southern Iraq near the border with Iran, and could potentially make a significant addition to Baghdad’s already substantial reserves.
There’s no indication that ExxonMobil knew about the new discovery prior to Tillerson’s meeting. But it reinforces the value to the company in staying on the Iraqi government’s good side. ExxonMobil’s politics are the same in the Middle East as they are here: work with and support anyone that makes it easier to suck oil out of the ground. Civil wars are bad for business.
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