Total prepares to move into Iraqi Kurdistan

BAGHDAD: France's Total is preparing the ground to become the next oil major to move into Iraqi Kurdistan, negotiating over two blocks following Exxon Mobil's deal with the semi-autonomous region last year, Kurdish and industry sources said.

Any contract between Total and the Kurdistan Regional Government (KRG) risks exacerbating a feud between the Kurds and the Arab-dominated central government, which has already warned that Exxon's deal violates Baghdad's control over oil resources.

Since Kurdish officials announced the deal with Exxon last year, other majors have watched its outcome as they mull their own possible forays into Kurdistan or opportunities to snatch up smaller players already working there.

So far Total has signed no agreement, but KRG sources and oil executives say the French company has been in serious negotiations over two blocks, Pulkhana and Taza, which border disputed territories claimed by Baghdad and Arbil.

"The deal is very close, but Total may want to wait to see how things play out with Exxon," said one oil executive in Arbil who is aware of the talks.

Kurdish government sources say negotiations are ongoing with Total but that no deal has been finalized.

"There are people from Total on the ground in Arbil at the moment," said another source with knowledge of a Total visit to the Kurdistan capital. Total declined to comment on the matter. A delegation of KRG officials visited Paris in midDecember when Total's Iraqi managing director chaired a roundtable with Kurdish oil officials on the region's need for hydrocarbon development. No one commented then on whether talks on exploration deals had happened.

Total's negotiations with the KRG continue even as the French major looks to expand its presence in the south of Iraq, where it has a small stake in the Halfaya oilfield, operated by China National Petroleum Corp.

Responding to Exxon's Kurdistan deal, Iraqi officials warned the US major it risked losing its contract for the West Qurna-1 oilfield in the south. The US company has not commented or so far responded to the government.

The fight for control of Iraq's oil resources — the world's fourth-largest — is at the heart of the dispute between the Iraqi central government and Kurdish officials who run their own regional authority to the north.

The central government says it has full sovereignty over strategic oil reserves, but Kurdistan says it can sign agreements in its territory. A long-delayed national oil law to resolve the dispute is still mired in parliament.

As Iraq recovers from years of war and sanctions, Baghdad has already signed a series of contracts with foreign oil operators to develop oilfields in the south, which supplies most of the country's production of 3 million barrels per day.