Iraq is taking its time over measure to discipline ExxonMobil after the KRG disclosed that it had signed six production sharing contracts with the supermajor in contravention of a blacklist policy operating in Baghdad.
Hussain al-Sharistani, Iraq’s Deputy Prime Minister for Energy, told Reuters he has been in talks with the US government over Exxon’s move, which was thought to have been cleared by the US state department until an official rebuttal.
He denied allegations from the Kurdish Regional Government’s President, Massud Barzani, that Baghdad had advance warning of the contracts.
Sharistani, in an apparent climb-down from previous rhetoric promising sanctions against the Texan supermajor, told Reuters that Iraq is considering several options, not sanctions against the company.
“We have several options,” Sharistani told Reuters. “The Iraqi government is studying them carefully … there is no deadline, these are grave decisions that need time … the company is studying its options and the Iraqi party is studying its options.”
Exxon will be briefed before any decision is made, Sharistani said. In the void left by Exxon’s refusal to comment, analysts have motted various intepretations of the company’s intentions, and likely punishment for what in much of Baghdad’s frought political scene is a violation of Iraq’s law and sovereignty.
Given the company’s importance to Iraq under the tight contractual terms at West Qurna 1 and imminent common seawater injection project, Baghdad may be hoping to thrash out a meaningful punishment which allows Exxon to continue in both North and South while allowing the government to save face.
Whether a settlement of this sort will accelerate or hinder the resolution of the proteracted dispute between Baghdad and Erbil over a suite of oil laws remains to be seen.
