The stand-off between Erbil and Baghdad has done little to dampen the enthusiasm among oil companies.
Oil companies remain undeterred by threats from Baghdad
The stand-off between Erbil and Baghdad has done little to dampen enthusiasm among oil companies.
ExxonMobil, Total and Chevron are all heavily involved in production at Iraq's megafields in the south, but were happy to risk their existing operations there by entering Iraqi Kurdistan.
Even before the big guns became involved, the Kurdistan regional government (KRG) was host to smaller oil companies looking to explore the riches of Iraq's mountainous north.
Taken aback by the action of the oil majors, Baghdad issued a series of wild threats, warning Exxon that it might lose its southern contracts.
It was more than mere posturing - the American company did lose the rights to develop a US$3 billion (Dh11.02bn) water injection project near Basra.
It was also excluded from the latest bid round held in May.
But the prospect of being excluded from future bid rounds in the south is of little concern to international oil companies (IOCs); their motivation to enter the KRG stems from the lack of profit generated by the technical service agreements struck with Baghdad.
If the contracts struck with the KRG start paying out, they will be significantly more lucrative than Baghdad's terms.
When it has doled out payments in the past, the finance ministry in Baghdad compensated only for the costs of production, refusing to pay companies in Kurdistan the amount promised in their contracts.
At a conference in London last month, the Kurdish energy minister Ashti Hawrami claimed that future payments would be made in accordance with the contracts the KRG signed with the oil companies, a claim that is denied by Iraqi officials. "As far as I know, this has not been solved yet," said Thamir Ghadhban, a senior energy adviser to Iraq's oil minister.
The commitment to Kurdish oil remains a gamble.
Companies in Kurdistan have spent most of their time and money exploring the region's potential, with little in the way of return.
Production of about 200,000 barrels per day has only been partially monetised, with Baghdad's handouts infrequent and at unprofitable terms.
For IOCs to make money in Kurdistan, the dispute needs to end, and the quicker the better.
The finances of smaller players such as Dana Gas, based in Sharjah, have been thrown into turmoil as a result of insufficient payments.
Dana is unlikely to be able to repay a $1bn sukuk that matures this month, paving the way for the first restructuring of a Sharia-compliant bond in the UAE.