UPDATE: Exxon Deal Clearly Positive For Kurdish Oil - Gulf Keystone
November 17 2011 - 6:50AM
Dow Jones News
Exxon Mobil Corp.'s (XOM) controversial deal to explore for oil
in Iraq's Kurdish region will undoubtedly change the politics of
the industry in a positive way, John Gerstenlauer, chief operating
officer for Gulf Keystone Petroleum Ltd. (GKP.LN), said
Thursday.
"There is no way that a player the size of Exxon can do what it
has done and not change the dynamics," Gerstenlauer said at the Oil
Council conference in London. "At the end of the day, it has to be
positive for Kurdistan."
Exxon Mobil last week became the first of the major
international oil companies to enter Iraqi Kurdistan.
The move has prompted threats from the Baghdad government, which
has long said contracts between the Kurdish government and oil
companies are invalid, and that ExxonMobil could lose its licenses
in southern Iraq if proceeds with the deal.
ExxonMobil's entry into the region shows that the industry has
confidence that oil contracts with the Kurdish government will be
honored, despite Baghdad's protests, said Gerstenlauer. "It's
brought an element of credibility to them," he said.
ExxonMobil's entry, and the prospect that more major oil
companies will follow, is also likely to trigger, "a wave of
consolidation," Gerstenlauer said.
"If the big boys come in and all [oil license] blocks were
taken, they're going to buy stuff," he said. The smaller companies
that currently dominate the Kurdish oil sector, "are going to be
bought up," he said.
"There's a good chance we'll get bought," he said, adding that
Gulf Keystone hasn't yet had discussions with any company that
could afford to buy it.
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317;
james.herron@dowjones.com
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