Iraq punishes Chevron for Kurdistan deals

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View of a Chevron oil refinery. Photo – energytut.com

Iraq oil ministry announced on Tuesday it has decided not to sign any oil deals with Chevron Corp and blacklist the oil giant until further notice. The decision came as the California-based oil corporation purchased stakes in Iraqi Kurdistan’s two blocks and announced exploration plans.

“In line with Oil Ministry policy based on the constitution, the Oil Ministry announces the disqualification of Chevron company and bars it from signing any deals with the federal Oil Ministry and its companies,” the statement said.

Chevron Corp last week confirmed it bought 80% stake in Sarta and Rovi blocks from India’s Reliance Industries Ltd. The second-largest US oil company is battling for contracts with other oil giants in an area where oil rights are a subject of fierce dispute.

Austria’s OMV AG, holder of the other 20% interest, will be Chevron’s new partner.

Baghdad is locked into a contentious dispute with Kurdistan Regional Government (KRG) over oil, lands and sharing revenues and insists that it has the sole authority to manage oil fields and sign deals in the north.

“The reputation and credibility of Chevron and other companies are being tested today and we are fully confident the result of its test is a total failure and it should feel ashamed of its action,” the statement said.

KRG administration insists Baghdad has barred the dispatch of petroleum products to the northern region in response to the autonomous government’s decision to go ahead with oil exploration deals with foreign companies. The Iraqi oil ministry persistently denies the allegations.

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