Derek Brower and Kwok Wan, LONDON: ExxonMobil’s move into Kurdistan has upset Iraq’s central government, further complicating tortuous negotiations about a new oil law for the country. Yet for all the disquiet in Iraq, the federal authorities may find there is little they can do to punish the supermajor.
For now, the central government is adamant that ExxonMobil has broken the rules. On 22 November, Hussein Al-Shahristani, Iraq’s deputy prime minister for energy, reiterated his position that all upstream contracts – including those signed by the Kurdistan Regional Government (KRG) – must be approved by the central government in Baghdad, "otherwise they have no standing".
On the surface, this poses a problem for ExxonMobil, which was warned three times by Shahristani not to deal with the KRG. The services contract for West Qurna-1 "obliges ExxonMobil to respect all Iraqi rules, laws and regulations and this particular case there is...