Hess Corporation has been disqualified by the Iraq government from competing in the country's 4th energy auction on account of the firm recently signing agreements with northern Kurdistan, news agency Reuters reported.
Hess in collaboration with Petroceltic had entered into a production sharing contract (PSC) with Kurdistan Regional Government on 27 July for the Dinarta and Shakrok exploration blocks, a deal that was signed despite central government opposition and which has since been deemed illegal.
The move comes in light of the ongoing dispute between Shi'ite-led central government and Kurds over claims of land and the country's enormous oil potential.
"We decided to remove Hess from the pre-qualified companies after it signed two deals in the Kurdish region," Abdul-Mahdy al-Ameedi, director of the oil ministry's contracts and licensing directorate was quoted as saying.
"The Oil Ministry is committed to not dealing with any oil company that signs oil contracts with the Kurdish regional government without the approval of the central government and the Iraqi Oil Ministry," he said.
Hess, which had been short listed along with 40 other companies to participate in the auction has now been removed from the revised version of the list of pre-qualified energy firms vying for 12 new exploration blocks, as part of the country's 4th auction scheduled for late January.
The auction will focus on gas exploration and is poised to add 29 trillion cubic feet of gas and 10 billion barrels of oil to Iraqi reserves.
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