- Associated Press - Monday, January 21, 2013

BAGHDAD — Iraq’s prime minister met with the head of Exxon Mobil Corp. on Monday to discuss the company’s plans in the country, raising the possibility that Baghdad could be mending its dispute with America’s largest oil company.

Exxon is helping to develop one of Iraq’s largest oil fields, but it has infuriated Baghdad by signing separate deals with the OPEC member’s largely autonomous Kurdish region to hunt for crude there, too.

Baghdad and the country’s Kurdish minority have been at loggerheads for years over rights to develop Iraq’s vast oil wealth, but tensions have been on the rise in recent months. The Kurds, who have their own armed forces, have signed dozens of deals with foreign oil companies since the 2003 U.S.-led invasion.

Recently, the Kurds began trucking oil pumped from their self-rule region into neighboring Turkey, prompting allegations of smuggling and threats of lawsuits from Baghdad. Iraq’s central government does not recognize the Kurdish agreements, which offer more generous terms than its own. It believes it should manage the country’s oil policy and wants all exports to travel through state-run pipelines.

Iraq announced the meeting between Prime Minister Nouri al-Maliki and Exxon Chairman and CEO Rex Tillerson in a brief statement following the talks in Baghdad. It offered few specifics, saying that the men discussed the company’s activities and working conditions in Iraq.

Mr. Tillerson said Exxon was eager to continue to expand its work in Iraq and “will take important decisions in this regard,” according to the statement.

Exxon spokesman Alan Jeffers declined to comment to The Associated Press. Ali al-Moussawi, a spokesman for the prime minister, would not elaborate on the government’s statement.

Exxon, based in Irving, Texas, reached a deal with the Kurds to hunt for oil in late 2011. That deal is particularly contentious from Baghdad’s point of view because it includes the exploration of land claimed by both the Kurds and Arabs.

Dueling claims to disputed territories running along the Kurdish region are seen as one of the gravest threats to Iraq’s long-term stability. A spokesman for the Kurdish regional government, Safeen Dizayee, downplayed the significance of Monday’s meeting.

“What is important is the results of this meeting, not the meeting itself,” he said. “We have not seen any change in Exxon Mobil’s policies regarding its work in Kurdistan.”

Iraq sits atop the world’s fourth-largest proven reserves of conventional crude, with about 143.1 billion barrels. Oil revenues make up 95 percent of the country’s budget — a portion of which is earmarked for the Kurdish region.

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