Faced with a growing number of oil majors signing pacts with the Kurdistan Regional Government (KRG), Iraq’s central government has sought to strike back, announcing today that it has issued an ultimatum to French company Total SA.
Under the ultimatum, announced by Deputy Prime Minister Hussein al-Shahristani, Total will have to cancel all of its energy deals with the KRG or else lose its contract to develop the massive Halfaya Field along the border with Iran. Total is a minor player in Halfaya, but the field is one of the world’s largest, and could be an enormous blow to the company.
Total announced a major oil deal with the KRG for its West Qurna-1 oil field weeks ago. Chevron and Gazprom have also signed deals with the KRG, but neither is in quite as touchy a position with the central government.
There was no deadline given for the ultimatum, and Total has yet to comment on what it is likely to do. Either way, it is expected to lose a major trading partner, and the split between Iraq and Kurdistan is liable to grow even greater.
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