Replies to post #185412 on ERHC Energy Inc (ERHE)

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Iraq suggested it would ban China Petroleum & Chemical Corp. from its second oil-and-gas bidding round because the Chinese state company has yet to abandon a contract in Iraq's northern Kurdistan region inherited from its purchase of Addax Petroleum Corp.

"I think yes," said Iraq's Deputy Oil Minister Abdul Kareem al-Leaby Wednesday when asked if his ministry would bar Sinopec from taking part in the country's second licensing auction, expected to take place later this year.

Huang Wensheng, spokesman of parent company China Petrochemical Corp., also known as Sinopec Group, said Wednesday he had no knowledge of the development.

Meanwhile, an Iraqi oil official said the ministry had sent a letter to Sinopec in September warning that if the company doesn't abandon the Kurdish contract, it would be blacklisted.

He said the ministry would hold a workshop Oct. 18-19 in Istanbul to discuss the second bidding round, which offers some 15 oil and gas fields, including some of Iraq's largest. It is likely Sinopec would be prevented from taking part in that meeting, he said.

Addax signed a contract with the semiautonomous Kurdistan Regional Government in northern Iraq, which has angered the central government in Baghdad. The central government says such contracts aren't valid because they haven't been approved by the Baghdad government.

However, the Kurds say the deals are legal and in line with the country's new constitution.

Sinopec is one of 45 international oil companies prequalified by the ministry to bid for developing the country's vast oil fields.

The ministry official said most of the 45, including the world's oil majors, have bought data packages prepared by the oil ministry on the oil and gas fields listed in the second bidding round.

Exclusion from the Iraq bidding process would represent a setback to China's ambitions to buy overseas oil assets. In particular, China is facing opposition in some African countries over oil acquisitions due to its social and technical track record.

However, Chinese companies have had recent success elsewhere. China Investment Corp., China's sovereign-wealth fund, said Wednesday it paid $939 million for a stake in Kazakh oil and gas company KazMunaiGas Exploration Production.