Oil explorer Gulf Keystone Petroluem saw its shares plunge 12 percent on Tuesday after a member of the Iraqi government told the press that Exxon Mobil has requested a "few more days" to consider a controversial deal to enter the country's Kurdistan oil region.
In recent weeks there has been speculation that oil titan Exxon's entry into the region was a sign that Gulf Keystone or one of the other firms in the region would be the subject of a takeover bid.
Since an agreement signed between Exxon Mobil and the Kurdistan Regional Government back in November, which allows it to explore six areas in the region, Gulf Keystone and a number of other oil companies operating in the area have been the subject of takeover speculation by Exxon.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The deal has been vehemently opposed by the government of Baghdad which says the Kurdish government doesn't have the authority to offer the rights for oil exploration.
Exxon has since fallen out of favour with the Iraqi government and must choose between the deal with the regional government and the deal with central government which grants it permission to develop one of the country's largest oil fields, which has proven reserves of 8.7bn barrels.
There has been considerable speculation that Exxon is starting a trend that will see a number of other larger oil firms that will enter the region by buying up small companies already operating in the region.
NR
-
Average earners now face £200,000 inheritance tax bill - how much will your estate owe?‘Double whammy’ of inheritance tax changes means even the estates of those earning the average UK wage could face bills, not just the very wealthy
-
Are the wealthy dodging more tax than previously thought?A new report suggests tax non-compliance among the wealthy could be worse than previously imagined. Is an overly complex system partly to blame?
