A deputy prime minister overseeing the oil industry has issued a sharp rebuke to the largest American oil company operating in Iraq, ExxonMobil, over the company’s reported efforts to expand its oil holdings into the semiautonomous Kurdish region in the country’s north
The statement from the official, Hussein al-Shahristani, said the Iraqi central government had cautioned Exxon against pursuing oil deals in Kurdistan, which the government says will remain illegal until long-awaited rules can be worked out to split revenue among all of Iraq’s fractious regions.
Al-Shahristani’s office issued the statement a day after the Financial Times reported that Irving-based Exxon, the United States’ largest petroleum company, had become the first major international oil operator to sign a contract in the Kurdistan region — a move the company has neither confirmed nor denied.
If Exxon did indeed sign a deal in Kurdistan, it is wading into a central controversy that has dogged Iraq since the American invasion.
Oil long has been the heart of Iraq’s wealth, and the invasion threw control of the rich reserves into question, exacerbating long-standing enmity between the Kurds and other Iraqis. Under President George W. Bush, the passage of an oil law to split revenue was considered a crucial benchmark to bring long-term peace to Iraq.
Critics of the oil companies that went to Kurdistan after the overthrow of Saddam Hussein’s government say they are pursuing development in the north in a manner that has served to heighten ethnic tensions between Arabs and Kurds.
Many smaller oil companies, including American ones like Marathon and Hunt of Texas, have signed contracts with the Kurdistan Regional Government. But the larger companies had held back to ensure they retain deals for fields in the south.
Exxon’s spokesman, Alan T. Jeffers, said Saturday in an email that the company would not comment on whether it had signed an oil deal in Kurdistan, or respond to the Iraqi deputy prime minister’s statement.
The Kurdistan Regional Government also had no immediate statement on the reports.
For the time being at least, the Iraqi government appears to be taking a strong, but somewhat vague, stance.
“The Iraqi government will deal with any company that violates the law the same way it dealt with similar companies before,” the deputy prime minister’s statement Saturday said.
In the past, the government has excluded oil companies active in Kurdistan from new auctions elsewhere in Iraq.