Sunday, October 21, 2012

Exxon Mobil Corporation (NYSE:XOM) pulls out of project due to political and territorial battles

Exxon Mobil Corporation(NYSE:XOM) decided to pull out of its oil project in Iraq, which was a flagship project. The company had signed a deal with the northern Kurdish region, which is an autonomous place, thereby upsetting the officials in Baghdad. The central government in Iraq considers deals made with that region without government permission, to be illegal, and therefore, against the official aspects.
The project will be left by Exxon Mobil, and the oil company will be focusing instead, on the oilfield in southern Iraq called the West Qurna-1. This oilfield is a huge one, and the oil company has shown keen interest in developing this place, instead of focusing on the disputed area, which can cause a lot of trouble, which might blow up into a big political issue. If the word of the diplomatic sources is to be believed, then the company stands to gain a lot from the new project, since it is said to rake in a lot of profits in the future. The profitability of the Kurdish Project on the other hand, might not be so lucrative. The sources confirmed this news on Thursday.
Hussain al-Shahristani happens to be Iraq’s Deputy Prime Minister for Energy, and the oil company has informed him of their actions and their plans for the future. The U.S State Department has also been notified of the change of decisions by Exxon Mobil, so as to not let trouble brew in the future. The U.S officials said that this was Exxon’s way of telling Baghdad that they were going to leave, and look around for other lucrative options instead.
Shahristani did not talk about Exxon wanting to pull out of the deal. He declined to comment on whether they were, in fact, doing so. He instead, said that the law still remained. Baghdad was still going to hold on to the fact that deals were not to be made with Kurdistan without the approval of the officials at Baghdad. The Kurdistan Regional Government was not the only body which needed to give out the permission. Exxon has declined to comment about this issue. 

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