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The Iraqi oil ministry is said to be still considering whether to allow Exxon Mobil to bid in the country's 4th energy licensing auction, lifting a ban that was imposed because of the deal it struck with the Kurdistan Regional Government (KRG).

"We are going to discuss this matter in the ministry and, God willing, we will take a decision," oil minister Abdul Kareem Luaiby [Luaibi, Elaibi] told reporters on Thursday.

Iraq's Deputy Prime Minister for Energy, Hussein al-Shahristani, said last month that Exxon would be banned from taking part in the country's latest licensing round, which is scheduled for May.

Luaibi confirmed an earlier statement that Exxon had sent a written letter to Baghdad on 5th March that it was suspending its operations in the Kurdistan region, but Kurdish officials have denied that Exxon has frozen its work in Kurdistan.

Exxon has so far made no public comments regarding the suspension of its work in Kurdistan.

(Sources: Reuters, Dow Jones)

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Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

ExxonMobil, Lukoil, Total

Action Calls:

• Exxon news signals some movement on KRG dispute: ... But not yet in which direction. We would withhold assumption of Baghdad "win."
• Total in discussions to enter Iraqi Kurdistan: At least one company apparently not spooked by action with Exxon.
• Lukoil to boost spending at Iraq oil field to $2 billion in 2012: Reminder of other side of coin - doubling down in the south.

Headlines:

• Iraq warms to GCC as Arab League Summit approaches: Maliki seeks to improve stature at AL Summit, but also signals subtle shift.
• Kurdistan says Iraq must investigate missing crude exports: Neither Erbil nor Baghdad likely want or are able to investigate; most likely Kurdish bargaining strategy.

Calendar Events Discussed:

• 29 March - Arab League summit
• April - National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

Reuters reported at the weekend that Iraq's government has received a letter from Exxon Mobil saying the it had frozen its deal with the Kurdistan Regional Government (KRG), but other reports say this has not happened.

"We received a letter from Exxon on March 5 saying they are freezing the contract with the Kurds," oil minister Abdul Kareem Luaibi [Elaibi] told the news agency Reuters.

He added that the Iraqi government had not yet reversed its intention to exclude Exxon Mobil from its next oil bidding round, but said "maybe in a few days" Baghdad could change its position if Exxon clarified its decision.

However Fuad Hussein, head of the office of Kurdistan President Massoud al-Barzani, said: "Exxon has not mentioned anything like this yet and Exxon has not frozen its contract with Kurdistan region."

Exxon is still working in Kurdistan region and Exxon senior executives never mentioned such thing in our meetings, he added.

Exxon CEO Rex Tillerson said earlier this month that the company was committed to both exploring in Kurdistan, as well as to expanding its West Qurna output in southern Iraq.

(Sources: Reuters, AKnews)

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Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

ExxonMobil, Gulf Keystone, Halliburton

Action Calls:

• Gulf Keystone shares hit as Exxon fear overcomes greed: Watch increasing noise out of Baghdad to signal crisis and closure.
• New Kurd rules tie oil equipment imports to PSCs: Signals that Kurds continue to pursue their own path.
• Iraq starts oil exports from SPM: Status quo continues - Iraq infrastructure progress in fits and starts.

Headlines:

• Iraqiya indicates positive steps in Hashemi talks with Maliki: Maliki probably pursuing holding pattern until after Arab League summit.
• KRG says negotiating Peshmerga deployment in Diyala : Could be very positive move, if it indeed has Baghdad's support.
• Al-Qaeda attack in Anbar: AQI attacks likely to continue in run-up to Arab League summit.

Calendar Events Discussed:

• 29 March - Arab League summit
• April - National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

ExxonMobil has reportedly reached an agreement with Baghdad to be paid in oil for work on the huge West Qurna-1 oilfield.

According to the report from Reuters, foreign oil companies involved in Iraq's oil expansion generally prefer to be compensated for capital expenditure and service fees in oil, because cash payments are more complicated to arrange.

BP, which leads the Rumaila project, and Italy's Eni, leader of the Zubair project, had signed up to Iraq's oil sales agreement from the outset, the first step towards being paid in crude.

Exxon and minority partner Shell held out as they sought to tighten up some contractual loose ends, said an industry source.

Exxon and Shell spent $910 million on West Qurna-1 last year and were repaid $470 million in cash.

An Iraqi official told Reuters:

"In principle there is agreement, although there is nothing in writing yet ... Exxon asked us to rephrase some of the wording, which in general will not affect the provisions of (State Oil Marketing Organization) SOMO's oil export agreement."

Exxon Chief Executive Rex Tillerson said last week the company was committed to working in both southern Iraq and Kurdistan.

(Source: Reuters)

More than £1 billion ($1.6 billion) was wiped off the value of Gulf Keystone Petroleum (GKP) during trading on Tuesday, as its share price fell by one third to 228.5p. Some of those losses have been recovered on Tuesday afternoon and Wednesday morning, with the shares currently changing hands at 275p.

The falls were attrributed to Tuesday's comments by the Iraqi government regarding ExxonMobil's decision, expected in the coming days, on its contracts in Kurdistan Regional Government.

GKP has been seen as a potential takeover target following Exxon Mobil's agreement with the KRG, and some regard the sharp fall in its share price as a sign that some speculative premium is leaking away.

Sentiment was also not helped by some bearish comments in an analysts' report from HSBC.

ExxonMobil has reportedly asked the Iraqi central government to give it a few more days to decide whether or not it will cancel an exploration deal with the Kurdistan Regional Government (KRG).

Baghdad has asked the U.S. giant to choose between the KRG deal and the existing contract with central-government to develop the 370,000 barrels-a-day West Qurna 1 field, which has proven reserves of 8.7 billion barrels.

In the meantime, Exxon has been excluded from Iraq's fourth oil-and-gas licensing auction, scheduled for May. Exxon has also reportedly been barred from a contract worth up to $10 billion to build a joint water-injection project in southern Iraq.

"[Exxon] has asked the Deputy Prime Minister to give it some more days in order to decide its stance on the contract it signed with Kurdistan," Faisal Abdullah, a spokesman for the Iraqi Oil Ministry, told Dow Jones Newswires.

The Iraqi government has sent Exxon three letters asking it to choose between between the deals.

"The central government is waiting for Exxon to respond to our letters and on the light of Exxon's response, Baghdad would take a decision," Abdullah said.

(Source: Dow Jones)

Advertising Feature

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

Exxon Mobil

Action Calls:

• Maliki turns to foreign policy as domestic issues wind down: Domestic confidence as outreach to Arab world shows multi-dimensional foreign policy.
• ExxonMobil confirms Kurdistan deal in Iraq: Not much new. Mainly significant in showing status quo continues.

Headlines:

• Tamim Sahwa demand merger with Defense Ministry: Positive sign for security in Sunni areas of Iraq.
• Peshmerga may push into Diyala: Watch for more friction between Arabs and Kurds in Diyala this goes through.
• Army pulls out of Basra: Sign of confidence in security in Basra.

Calendar Events Discussed:

• 29 March - Arab League summit
• April - National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

Long-term investors in many Iraq-focused oil companies have had their patience amply rewarded, as shares in companies such as Gulf Keystone Petroleum (GKP) and DNO have registered significant gains.

Tony Hayward, CEO of Genel Energy, puts this down in part to ExxonMobil's entry into Kurdistan, which has highlighted the opportunities in the region. So much so, in fact, that he now regards GKP and DNO as overpriced.

Outside fo the direct oil sector, Egypt's Orascom Construction has also hit new recent highs following its contract win in Baiji.

It's a different story for Iraq's indigenous quoted companies, however, which are down about 11% on average year-to-date, but as Mark deWeaver writes there are some technical factors that could cause that fall to correct itself rapidly.

Whether your business is domestic or foreign, Upper Quartile and AAIB are here to help you. For more information please contact Gavin Jones or Adrian Shaw.

Advertising Feature

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

DNO, Exxon Mobil, Genel Energy, Gulf Keystone

Action Calls:

• Iraqi Budget passed: Maliki gets most of what he wants, gives little that is not strictly symbolic.
• Genel starting to look elsewhere: Genel can't really stomach increasingly frothy valuations, but majors may.
• Basra SPM still not operational: We celebrated too soon, but bellwether works.

Headlines:

• Riyadh names ambassador to Iraq: Small step forward, confirming Iraq is not Iran's puppet. Hopefully more progress to come.
• AQI claims attacks: Worrisome, part of recent uptick in violence. Will indicate political progress, or not.

Calendar Events Discussed:

• Next week - Discussions on former Deputy PM Mutlaq's potential return
• April - National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.