Exxon Updates: Kurdistan Deal Causes Friction in US-Iraq Relations

Exxon Mobil (NYSE:XOM) had a relatively eventful week, as news about the company signing exploration contracts with the Kurdistan Regional Government (KRG) to explore the region for oil and gas became public. ^[1] Kurdistan is a semi-autonomous region in Iraq which is believed to hold around 45 billion barrels of oil and 100 to 200 Trillion cubic feet (Tcf) of natural gas. Exxon is the first oil major to enter into agreements to drill in this region; most other players such as BP (NYSE:BP) and Royal Dutch Shell (NYSE:RDS) have stayed away from exploring prospects in the region fearing a backlash from the Iraqi government, which has claimed that the contracts are illegitimate. ^[1] The Iraq government has come out against the deal, and

In another development, Exxon’s partner Americas Petrogas announced that the two companies will jointly start drilling activity in the Vaca Muerta formation for shale oil next month. ^[2] The drilling would be a part of the $76 million contract that Exxon announced in August that gave it a 45% stake in the  163,500 acre block in the Neuquen Basin. This block is a part of the Vaca Muerta basin where Argentine player YPF struck a 927 million barrels of oil equivalent find earlier this week.

We have covered new developments in the shale gas sector in the shale gas updates article.

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1. Exxon signs Kurd exploration contracts, Financial Times [↩] [↩]
2. Exxon, Petrogas to Drill for Argentine Shale Oil After YPF Find, Bloomberg [↩]