Exxon Mobil Excluded From Iraq Oil Auction

Exxon Mobil (NYSE:XOM), the largest U.S. oil company and one of the major players in reviving the Iraqi oil industry, has been excluded from that country's next energy auction.

The company is officially being excluded because of several exploration contracts it negotiated with Kurdish officials in the north of Iraq.The central Iraqi government and authorities in semi-autonomous Kurdistan are locked in a dispute over oil.

Iraq's next oil and natural gas auction will take place next month, the Associated Press reported.

Exxon has been removed from the list of qualified companies because it refused to abandon the deals with the Kurdish region as requested by the Ministry of Oil, Iraq's Oil Ministry's Licensing and Petroleum Contracts Department deputy head Sabah al-Saidi said, the AP reported.

Iraq is opening 29 trillion cubic feet of natural gas and about 10 billion barrels of oil to bids in its next oil auction taking place at the end of May.

Late last year, Kurdish officials announced they negotiated six exploration contracts with Exxon Mobil. The announcement angered Baghdad, which does not recognize contracts made independently of the central government.

Earlier this month, Kurdish President Massoud Barzani said his government did nothing wrong, and broke no laws in negotiating the contracts.

Oil and energy ministers on both sides have claimed Exxon Mobil is in various stages of either freezing or upholding its Kurdish contracts.

Iraq has 115 billion barrels of oil in proven reserves. Kurdistan to the north, has roughly 2 billion, but claims some of Iraq's largest oil fields near the city of Kirkuk. The country has only recently surpassed 3 million barrels a day in production, a level not seen in several decades.

Exxon Mobil, however, has so far retained its previous contacts with Iraq's Oil Ministry, where it takes the lead in developing one of the country's largest oil fields -- West Qurna 1 to the south -- which has roughly 9 billion barrels of oil.

In Thursday trading in New York, Exxon Mobil fell 14 cents to $85.62.