Iraq Shoots Down Chevron

The government of Iraq has barred Chevron Corp. (NYSE: CVX) from bidding on lease contracts in central and southern Iraq, following the company’s deal with India’s Reliance Industries last week in which the U.S. supermajor acquired stakes in two oil exploration blocks in Kurdistan. Exxon Mobil Corp. (NYSE: XOM) was similarly banned from participating in a lease auction held in May.

Iraq’s central government is looking for the semiautonomous Kurdistan Regional Government to accept the central government’s claim to supremacy over the country’s oil reserves. By denying bidding rights to companies that have signed contracts with Kurdistan, the central government believes it can recover control over the country’s resources.

Chevron and Occidental Petroleum Corp. (NYSE: OXY) were among the companies allowed to bid in the May auction, along with BP plc (NYSE: BP), Total SA (NYSE: TOT) and Eni SpA (NYSE: E).

Shares of Chevron are down 0.4% at $107.50, in a 52-week range of $86.68 to $112.28.

Paul Ausick