Iraq's Decision to Bar Exxon Criticized

Blocking Exxon Mobil from an oil and natural gas licensing round in Iraq could keep potential investors away, a deputy prime minister said.

In May, Iraq is expected to put around a dozen oil and natural gas blocks up for auction in its fourth licensing round. Exxon Mobil is prohibited from taking part, however, because it has contracts with the semiautonomous Kurdistan Regional Government.

Iraq has yet to pass comprehensive legislation that would regulate the energy sector. Baghdad says unilateral deals with the KRG are illegal.

Rowsch Nuri Shaways, an Iraqi deputy prime minister from the Kurdistan Democratic Party, complained the decision on Exxon meant other major energy companies might not invest in Iraq.

"This contradicts the general policies of economic openness, the promotion of trade and attracting foreign direct investment in order to provide better services to the people of Iraq, who have suffered for decades from closed centralized economic policies that have led to widespread poverty, destitution and deprivation," he said in a statement.

He said now was the time to pass the hydrocarbon law so that political disputes in the energy sector could get resolved for the benefit of the Iraqi people.

The International Energy Agency has warned political instability in post-war Iraq could spill over to the energy sector.

Iraq has around 143 billion barrels of oil reserves.

Source: UPI