ExxonMobil's Deal With Iraqi Kurdistan Fuels Uproar

Exxon Mobil’s recent oil deal with Kurdistan has exacerbated tensions between the Kurdistan region and the central Iraqi government. Adel Shaymaa writes that Iraqi Prime Minister Nouri al-Maliki sees the deal as a very serious issue that "could ignite war." 

al-monitor Iraq's Deputy Prime Minister for Energy Affairs Hussein al-Shahrastani speaks to Reuters during an interview in Baghdad December 4, 2011. Photo by REUTERS/Mohammed Ameen.

Topics covered

nineveh, massoud barzani, iraqi oil, iraq ministry of oil, iraq, exxon mobil

Jun 20, 2012

The contracts signed between US oil giant Exxon Mobil Corp. and the Kurdistan Regional Government (KRG) have exacerbated the oil crisis between Baghdad and Erbil, as President of Kurdistan Massoud Barzani insists on withdrawing confidence from Prime Minister Nouri al-Maliki’s government by allying with the Iraqi List and the Sadrists.

Maliki warned that Exxon Mobil oil contracts with the KRG are a serious issue, saying that he would “do anything necessary to preserve the national wealth,” according to his media advisor Ali al-Moussawi.

On October 18, 2011, Exxon Mobil signed a contract with the KRG  to invest in six oil fields, some of which fall within disputed areas in Ninevah. The central Iraqi government rejected this move and considered it illegal. It gave Exxon Mobil a choice: either work with the Iraqi government, or sign a contract with Kurdistan (and lose business with the Iraqi government).

On June 18, 2012, Moussawi said that “Maliki sees these deals as a very serious issue that could ignite a war, because they may lead to the disintegration of Iraq's unity.” He added that “Maliki is ready to do whatever is necessary to preserve the national wealth, maintain the transparency necessary for investing in Iraqi resources (namely oil) and to prevent any misuse of these resources — whether regarding the form or nature of the contract.” According to Moussawi, “when the prime minister learned about the contract and that Exxon Mobil was making deals, he sent a letter to US President Barack Obama last week, urging him to intervene and prevent Exxon Mobil from continuing in this direction.”

Moussawi’s comments came in response to an interview by the Iraq Oil Report with Ninevah governer Atheel al-Nujaifi, in which he did not rule out the possibility of his governorate becoming involved in the agreement between the KRG and Exxon Mobil. On whether he wants to be a part of the oil contract, Nujaifi said “we must be part of this contract. It will certainly not be my decision alone, but the decision of the provincial council.” He added, “I believe that we enjoy the same power and authority as the government of the Kurdistan region, since the Constitution does not differentiate between governorates and regions,” and confirmed that he “met representatives from Exxon Mobil.”

Moussawi said that “the prime minister cannot endorse such contracts, whether it involves the Kurdish government or local governments.” He added that, “according to information obtained by the government, a deal has been struck with the governor of the Ninevah province to relinquish a 10 kilometer strip of land to the Dohuk governorate in the Kurdistan region. The strip includes the Sheikhan and Qush districts, which contain 20 billion barrels of oil.”

Commenting on Moussawi’s remarks, Nujaifi said “we have not approved anything,” and that “This warning is out of context. We should sit down and reach an understanding on the issue; this call for fighting is not wise.” For his part, Deputy Prime Minister Hussein al-Shahrastani said that “the federal government asserts that any oil contracts signed with the Kurdistan region are illegal, since the Ministry of Oil is the one authorized to sign contracts.”

Shahrastani’s media director, Faisal Abdallah, told Az-Zaman that “the federal government is entitled to reject contracts signed by Kurdistan with Exxon Mobil, since this is illegal. Also, no governorate is authorized to sign a contract without the consent of the Ministry of Oil, since oil belongs to all Iraqis, and not just a particular governorate.” He explained that “Exxon Mobil informed the Iraqi government in a recent letter that it froze its operations at the oil fields in the Kurdistan region, as it realized that the contracts are illegal.”

Continue reading this article by registering at no cost and get unlimited access to:
  • Al-Monitor Archives
  • The Week in Review
  • Exclusive Events
  • Invitation-only Briefings

More from  Adel Shaymaa

Recommended Articles

Rockets hit Iraqi base used by coalition troops, no casualties
Al-Monitor Staff | Armed Militias and Extremist Groups | Jul 24, 2020
OPEC continues oil export cuts in June
Al-Monitor Staff | Oil and gas | Jul 2, 2020
Four injured in US military transport plane crash at Iraq’s Camp Taji
Al-Monitor Staff | Defense/Security cooperation | Jun 9, 2020
Turkey's assault against Syrian Kurds leaves trail of misery and spin
Amberin Zaman | Turkish-Kurdish conflict | May 29, 2020
Intel: Iraq’s Peshmerga Ministry pushes for joint security talks with Baghdad
Jared Szuba | Defense/Security cooperation | May 12, 2020