This is a bit tentative from DJNews but if true could signal the biggest movement yet in the Exxon Iraq story.
Many were astonished by their entry into Kurdistan defying the rather backward and aging Baghdad oil ministry in the process. It’s difficult enough to get Baghdad to talk to the Kurds at all – so perhaps it’s no surprise that Exxon may have decided to cut ties with Baghdad rather than try and keep a foot in each part of the country. If Exxon do bid fair well to the southern part of Iraq – it could define a new ‘capital’ in Iraq – called Erbil or Kurdistan. The latter is moving at such a speed that it makes Dubai look stationary. Businesses are flocking to Kurdistan as the country is open for business and hospitable. This is in stark contrast to Baghdad where fear, threats and antique contracts better suited to Saddam Hussain, dominate the region.
If Exxon bids fair well to the south and defines the North its new venture – then it might spark a massive following from competitors as each one fights to gain a foot hold in the country which offers much more realistic contracts that shares risk and investments with all those involved ‘fairly’ and encourages growth.
Stocks to benefit from this news (if true) are Gulf Keystone, PetroCeltic, Afren and Genel in particular. Heritage and Sterling Energy may also gain on the news.
Also worth noting is that the Prime Minister of Iraq, Nuri al-Maliki, will pay an official visit to the United States for talks in Washington on Dec 12th. This comes as both Kurds and Baghdad are set to conclude talks on an Oil&Gas law before year end with a view to pass it through Parliament in Q1 2012. It also involves key discussions on the US’s troop withdrawal plans.
Dow Jones Newswires, November 30, 2011 07:58 GMT
MOSCOW (Dow Jones)–Russia’s oil major OAO Lukoil Holdings (LKOH.RS) is in talks to acquire from Exxon Mobil Corp. (XOM) a stake in development of West Qurna-1 oil field in Iraq, Russian RBC Daily reported Wednesday.
According to the paper, Lukoil, together with Royal Dutch Shell PLC (RDSA) is looking into buying out Exxon Mobil, and to become partners in developing of the Iraqi second-largest field.
The paper is citing unnamed sources within the oil industry as saying the talks may be concluded by the end of 2011. As the result of the deal Lukoil and Shell may acquire 37.5% stake in the project each, while the remaining 25% will be still owned by Iraqi state-owned North Oil Company. Shell currently holds 15% stake in the project.
In January 2010, Iraq’s oil ministry completed the deal with Exxon Mobil and Shell to develop production at West Qurna-1 with reserves of about 8.5 billion barrels. Lukoil had filed a joint bid for the field with ConocoPhillips (COP), but failed to secure the contract.
Lukoil is developing a neighboring West Qurna-2 oil field, and has repeatedly argued that both fields should have the same operator. Lukoil declined to comment on the report.
-By Alexander Kolyandr, Dow Jones Newswires; firstname.lastname@example.org