US energy giant ExxonMobil has told the Iraqi oil ministry that it has “frozen” its controversial contract with the country’s autonomous Kurdish region, a government official told AFP on Saturday.
On October 18, Kurdish authorities inked a deal with ExxonMobil for it to explore six areas in Kurdistan, but Baghdad regards as invalid any contracts not signed with the central government.
“ExxonMobil sent a letter to the Iraqi oil ministry this month to inform the ministry that they have frozen their contract with Kurdistan,” said the official, who spoke on condition of anonymity.
The official gave no further details.
The Kurdistan contract potentially put an Exxon contract with the central government in jeopardy.
In January 2010, the Iraqi oil ministry completed a deal with ExxonMobil and Anglo-Dutch giant Shell to develop production at West Qurna-1, which, with reserves of about 8.5 billion barrels, is the country’s second-biggest field.
The Kurdistan region has signed around 40 contracts with international companies on a production-sharing basis without seeking the express approval of the central government’s oil ministry.
The federal oil ministry, meanwhile, has awarded energy contracts to international companies on the basis of a per-barrel service fee. It has also refused to sign deals with any firm that has agreed a contract with Kurdistan.