Thursday, April 19, 2012

Nouri and Exxon: The love-hate relationship

Daniel Fineren (Reuters) reports that, at this point, ExxonMobil is not on Iraq's "list of 47 pre-qualified bidders for the next round of Iraq energy exploration rights." For any wondering, Total is among the 47. In the press release, the Ministry of Oil notes:

The Petroleum Contracts and Licensing Directorate (PCLD) at the Ministry of Oil announced Thursday (20/4/2012) that Iraq’s Fourth Petroleum Licensing Round will take place as scheduled on May 30-31, 2012. The Final Tender Protocol and the final model Exploration, Development and Production Service Contract (EDPSC) were sent Thursday to all prequalified companies. The final list of prequalified companies includes a total of 47 entities, split between operators and non-operators.

“We are happy to announce that the next bid round is on schedule. The Final Tender Protocol and the definitive model Contract have been issued to all prequalified companies” said Abdul Mahdy Al-Ameedi, director general of the PCLD.

Iraq is offering 12 large exploration blocks of an average size of 6,500 square kilometers for bidding. Winning companies, or consortia of companies, will carry out exploration, appraisal, development and production activities within the 12 Contract Areas.

The aim of the fourth round is primarily to expand Iraq’s natural gas production capacity to satisfy the power generation sector and create gas-based industries, as well as increase the country’s oil reserves.

“We are looking forward to welcoming all participating companies in Baghdad. The fourth licensing round will be conducted in a transparent and public manner and according to the same procedures as the first three rounds,” Al-Ameedi said.

Since launching the first licensing round in 2008, Iraq has awarded 14 service contracts for the development of discovered oil and gas fields in three licensing rounds in addition to the Ahdeb contract. It also signed a major joint venture with a consortium of Royal Dutch Shell and Mitsubishi to capture and monetize associated natural gas produced in southern Iraq.

The press release continues with a list of the 47 companies.

AP speaks with Sabah al-Saidi ("Deputy head of the Oil Ministry's Licensing and Petroleum Contracts Department") who states, "Exxon has been removed from the list of qualified companies because it refused to abandon the deals with the Kurdish region as requested by the Ministry of Oil." Dropping back to yesterday's snapshot:

Reuters reports, "Exxon Mobil has told Baghdad it will not break ground on its oil blocs in the semi-autonomous Kurdish north until the centeral government approves the contracts, Iraq's top energy official said on Wednesday." The official is Deputy Prime Minister for Energy Hussain al-Shahristani. That alone makes the claim questionable -- remember, April 3rd, he was in the news for insisting the Kurds were secretly selling oil to Iran. He's not seen as someone impartial or particularly honest.

And apparently for good reason, he's not seen as someone impartial or particularly honest. So we're pleased with ExxonMobil one day for allegedly promising it won't "break ground" with regards to that contract and the next day we're punishing it?

Iraq better figure out where they stand on ExxonMobil real quick because this isn't about ExxonMobil, this is about how Iraq looks on the world stage. Contracts were signed months ago. Are they valid or not? If they're not valid, then they don't exist. If they don't exist, then why is ExxonMobil being punished?

The punishment phase would indicate that the contracts are valid (the KRG certainly considers them valid). It's petty and indicates the Baghdad-based government has no eral power so they just lash out.

Iraq needs to diversify its economy and it needs to do so quickly. It also keeps insisting it needs international investment. If that's true, they need to stop alienating businesses and looking so ridiculous. A contract's legal or it's not. Clearly for all the bluster, Baghdad can't cancel the contract ExxonMobil signed with the KRG. So they think they'll pick a fight. ExxonMobil's not going to be hurt by any of this. They're a multi-national corporation that managed to survive the Exxon Valdez disaster.

Meanwhile Kitabat notes Parliament's investigating alleged government efforts to rip off a Russian oil company -- supposedly millions of dollars.

As the violence continues, so does the political crisis. Al Sabaah notes the National Alliance's call for a return to the Erbil Agreement. The Erbil Agreement ended Political Stalemate I, eight months of gridlock following the March 2010 elections. The US-brokered agreement managed that feat by getting all sides to make concessions. The White House wanted Nouri al-Maliki to have a second term as prime minister so that was the biggest concessions after Nouri's State of Law came in second place in the elections. But Nouri agreed to minor concessions to hold onto the post. This was November 2010. By the end of December, after he was named prime minister for a second term, he trashed the agreement. This is Political Stalemate II and the current crisis. National Alliance MP Hassan Sinead notes they remain committed to the Erbil Agreement, they have not rejected it and the agreement is an example of solidarity for Iraq so it is the responsibility of the political blocs, the Parliament, the executive branch and the judicial branch to implement the agreement. Kitabat notes Moqtada al-Sadr's call for his followers to direct their questions about the political impasse towards Nouri. As noted yesterday, these events may indicate some motion in the impasse. Dar Addustour notes that the National Alliance has postponed a scheduled meeting; however, one component of the National Alliance, the Islamic Supreme Council of Iraq, has announced that they aren't opposed to someone from the Sadrist bloc being nominated for prime minister (that refers to Moqtada). An MP from State of Law and one from Sadr's bloc are both quoted insisting that there's no move to hold a vote to withdraw confidence in the current government.

Dar Addustour reports another denial: that Iraqi forces and the Peshmerga clashed in Kirkuk and Dar Addustour reports that Nouri al-Maliki is gearing up for a visit to Tehran (Sunday).

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