BAGHDAD, Jan. 9 (AKnews) - The Iraqi Oil Ministry has announced that Exxon Mobil will be allowed to participate in the fourth oil licensing round along with 37 international companies.
The ministry previously said Exxon could only participate in the licensing round if the company canceled its exploration contracts with the Kurdistan Regional Government.
Deputy Prime Minister for Energy Hussein al-Shahristani gave Exxon Mobil the choice either to work in the West Qurna field in Basra or six fields of Kurdistan.
The Texas-based hydrocarbon corporation said that it got the approval of Shahristani to work in Iraqi Kurdistan.
"No ministerial decision was issued to prevent Exxon Mobil from participating in the fourth round of licensing," said Director General of the contracts and licenses department in the ministry Abdul-Mahdi al-Amidi.
The licensing round will start on May 30.
Iraq signed contracts with international companies to develop 11 discovered oil fields to increase the country's production of crude oil from 2.4m barrels per day to 12m within the next six years.
This is the first time that Iraq has presented sites for investment since the fall of the former Iraqi regime in 2003.
Iraq is a member of the Organization of Petroleum Exporting Countries and has the fourth largest oil reserves in the world.
The draft oil and gas legislation was approved by the Iraqi government in August and raised tension between Baghdad and Erbil. The latter believes the draft law gives too much power to the federal government to manage its oil wealth and would be at the expense of the Kurdistan region.
Oil revenues constitute about 95 percent of Iraq's budget, but so far there is no law to regulates its affairs in the country after the failure of the previous Council of Representatives to pass an oil and gas law, which was expected to improve the oil situation.
Recent debate on draft legislation has been postponed by the Oil and Gas Committee of the Iraqi Council of Representatives because of the absence of Iraqiya List members.
In the past Baghdad has prevented companies operating in the Kurdistan Region from participating in licensing rounds to develop Iraqi oil fields. Other oil companies working in southern Iraq, like BP and Royal Dutch Shell, have held off from moving into Kurdistan Region for fear of antagonizing the Iraqi government.
Basra governor Abdul-Samad claimed this week that "oil wealth has become a curse on the citizens of the province". He added that residents are "deprived of adequate housing because most of the lands in Basra belong to the Oil Ministry and the industry creates environmental pollution".
© AK News 2012
