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.
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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.
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