Britain asks Iraq to back off after threats to Exxon

Hayward enters row over oilfields after US giant's deal with Kurdish region causes controversy

Erbil, Kurdistan

The British government and former BP boss Tony Hayward yesterday waded into the legal battle over control of the oil in Kurdistan, calling on Baghdad to stop obstructing the development of the region's hydrocarbon reserves.

The calls came as Baghdad renewed its threat to throw Exxon Mobil out of the country after the US giant cut a deal to explore for oil and gas in the rocks of its arch resources rival, the semi-autonomous Kurdistan Region of Iraq.

The Iraq Government has long insisted that oil contracts signed with the Kurdistan Regional Government (KRG) are illegal. Furthermore, it has frequently threatened to bar any oil company operating in Kurdistan from working elsewhere in Iraq and to eject busines- ses already working in Iraq if they should sign a deal with the KRG.

On Friday Exxon Mobil became the first company operating in Iraq to challenge Baghdad, when its exploration deal in Kurdistan was first reported, prompting a series of threats by Iraqi politicians to evict it each day since.

The UK Government entered the quagmire yesterday when Michael Aron, British ambassador to Iraq, called on Iraq to "resolve its differences [with KRD] and reach an agreement over hydrocarbon laws and revenue sharing".

Speaking at the Kurdistan-Iraq Oil & Gas conference in Erbil, Mr Aron said: "The British Government would like a climate where British companies can work in and exploit the opportunities, with the Iraqi government and the KRG, across the whole of Iraq." Mr Hayward added: "The British embassy was imploring both sides to resolve this issue and I would support that request."

Mr Aron and Mr Hayward spoke after Mowaffaki al-Rubaie, former national security adviser to Iraq and member of the Iraqi parliament, warned that the Exxon Mobil deal "will not help the delicate negotiation of hydrocarbon law in Baghdad. We believe the Federal government will challenge Exxon Mobil."

Adding to the uncertainty, Adal Barwari, adviser to Iraq prime minister Nouri al-Maliki, said that his boss had agreed a "mutually acceptable" solution with Barham Salih, the Kurdistan Prime Minister, over oil and territory.

Baghdad has been keen to curb Kurdistan's oil development, partly because it fears that additional revenues will make it more powerful and increase its claim for greater autonomy.

If Exxon Mobil goes ahead with its contract in Kurdistan, while retaining operations in southern Iraq, other big players would rush into the region, gobbling up the 40 smaller companies that have piled in in recent years, analysts predict. Ashti Hawrami, Kurdistan's minister for natural resources, said: "There will be consolidation through mergers, I suspect. We can expect more movements in the near future."

Mr Hayward is among those who have moved into Kurdistan, acquiring Genel Enerji, a Turkish oil company focusing on the region, through his Vallares cash shell. It is his first venture since leaving BP after the Gulf of Mexico oil spill.

When asked if he had a target for Vallares' eventual oil production, he said: "One of the things I learnt from BP was don't have long-term targets".

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before