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* Nineveh drafts own rules to lure foreign oil companies
* Seeks investment in oil refinery/oilfield
* Holds initial talks with Exxon, other majors
* Won't be deterred by Baghdad's objections
* Willing to cooperate with Kurdistan on shared blocks
By Ziad al-Sanjary and Ahmed Rasheed
MOSUL, Iraq, Oct 23 Iraq's northwest Nineveh
province has started talks with oil companies and is drafting
terms to attract investment in its significant oil and gas
reserves, steps certain to antagonise the central government.
Nineveh Governor Atheel Nujaifi says Baghdad has focused on
the giant southern oilfields and has paid little attention to
developing resources in his province.
"We are not ready to wait for decades until the crude runs
out from the south to start energy investment in Nineveh
province," he said in an interview.
The governor said he had met with Exxon Mobil and
other major oil companies to discuss investment opportunities.
"We listened to their proposals about how to best invest in
Nineveh, but we did not sign deals," he said.
Last month the provincial council of the predominantly Sunni
Muslim governorate granted him the power to sign deals with
foreign oil firms independently of Baghdad, which immediately
rejected the move.
Iraq's Shi'ite-led government claims sole authority over the
exploration and export of all oil and gas resources.
"The government will not tolerate such a decision, whether
from Nineveh or any other province," a senior official said at
That has not deterred Nineveh from following the example of
the autonomous Kurdistan region in pursuing an increasingly
independent energy policy.
"We will start oil investments in the province with a
priority to the downstream industry, and that could be followed
by broader investments in the upstream sector," Nujaifi said.
The governor has drafted regulations that could allow
foreign investors to bid for an integrated project to build a
150,000 barrels per day (bpd) refinery and develop an oilfield
to feed it.
Nujaifi said the province holds around 20 discovered but
untapped oilfields and has the potential for huge resources that
have yet to be discovered.
"When we have oil majors working, then definitely there will
be social benefits, job opportunities and economic gains. Huge
investments could create a better, stable environment."
PREPARED TO WORK WITH KURDISTAN
Kurdistan, which borders Nineveh, is embroiled in a
long-running dispute with Baghdad over contracts it signed with
companies to develop northern fields.
Exxon, the world's largest publicly traded energy company,
infuriated Iraq by signing up for six Kurdish exploration blocks
Two of those blocks - Bashiqa, seen as the most promising,
and al-Qush - lie in areas where Nineveh and Kurdistan both
Nujaifi said Nineveh was prepared to coordinate and
cooperate with Kurdistan in managing joint exploration blocks
and oilfields to ensure both sides can make gains.
"First we should make clear that both al-Qush and Bashiqa
are part of Nineveh province. But we can't do anything about
these (Kurdish) contracts; they are irrevocable," he said.
"We are planning to benefit from these deals by getting a
share of the revenue from the crude that's produced."
Nujaifi said his province was learning from Kurdistan's
journey towards energy independence.
"We should get the benefits of the Kurdish region's
experience in energy investment and also follow the same
constitutional and legal path the region followed in drawing its
energy policy," he said.
Nujaifi said neither the central government nor the oil
ministry have the right to stop him from developing the energy
resources of the province.
Baghdad has clashed with the governor on several fronts in
recent years, including Nujaifi's support for protests by Iraq's
Sunni minority against the Shi'ite-led government.
"If the government or the oil ministry object to the
province's authorising me and object to our future contracts,
then they could go to federal court," the governor said.
A new committee of experts will soon be formed to draft an
energy policy for Nineveh, Nujaifi said. It will also prepare
the legal and technical ground for forthcoming talks with
(Editing by Peg Mackey and Jane Baird)