LONDON | Wed Nov 16, 2011 7:39pm EST
Nov 17 (Reuters) – Royal Dutch Shell Plc has pulled out of oil-development talks with the Kurdistan regional government in an effort to protect lucrative investments in southern Iraq, the Financial Times reported on Thursday.
The newspaper cited people familiar with the discussions as saying Baghdad is seeking to impose a de facto ban on companies operating in Kurdistan, a semi-autonomous region in northern Iraq.
Over recent days Iraqi government officials have threatened to cancel an existing oil field contract with Exxon Mobil Corp and on that basis, Shell’s move is precautionary to protect a potential $17 billion natural gas deal, according to the FT’s sources.
“Baghdad’s real power lies in denying future contracts and Shell still had something else on the table. They still had not signed the southern gas field deal,” said one person familiar with the talks, cited in the article.
Shell’s gas deal with the Iraqi government cleared its last major hurdle on Tuesday after it was approved by Baghdad’s council of ministries.
Royal Dutch Shell was unavailable for immediate comment.
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