WASHINGTON (Reuters) - The Obama administration should pressure Exxon Mobil (XOM.N) to slow down dealings with Iraqi Kurdistan as they could worsen disputes between Baghdad and the northern province, Iraq’s ambassador to the United States said.
Exxon angered Baghdad a year ago by signing an exploration deal with the Kurdistan Regional Government (KRG) in the north. The KRG quickly struck similar deals with other global oil companies but the central government in Baghdad deemed all the deals null and void.
Disputed areas between partly autonomous Kurdistan and Baghdad are seen as a potential flashpoint as tensions between regions of Iraq rise.
“We need the American government to exert some pressure on this company,” Jabir Habeb, Iraq’s ambassador to the United States, told reporters about Exxon after a panel on Iraq’s energy potential at the Center for Strategic and International Studies.
The ambassador said he met with a U.S. energy official recently who told him the U.S. government could not apply a lot of pressure on Exxon because the company makes decisions that benefit its shareholders. Habeb said he told the official the issue could cause political and social problems so it should not be seen as a shareholder issue.
Exxon did not immediately return a request for comment.
The energy company is hoping to exit its flagship West Qurna-1 oilfield project in southern Iraq, diplomatic sources said last week, as profits there are thin.
But analysts have said other oil companies from Russia and elsewhere may not have the know-how and resources to maximize production from the giant Qurna field.
Habeb said Iraq wants Exxon to stay in the south.
“We prefer them to be there and I think the potential of oil in the south of Iraq there’s no comparison with the north of Iraq, so I think they understand this fact.”
The Paris-based International Energy Agency released a report on Iraq this month that said oil production in the south could rise to 6.4 million barrels per day by 2035 in a mid-level scenario. Output could rise to 1.6 million bpd from the north by the same time period, it said.
Reporting by Timothy Gardner; Editing by Alden Bentley