Iraq has decided to ban China Petroleum & Chemical Corp. (SNP), or Sinopec, from its second oil and gas bidding round because the Chinese state firm has yet to abandon a contract in Iraq's northern Kurdistan region inherited from its purchase of Addax Petroleum Corp. (AXC.T), Iraq's Deputy Oil Minister Abdul Kareem al-Leaby told Dow Jones Newswires Wednesday.
"I think yes," Leaby said 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.
Sinopec is one of 45 international oil companies prequalified by the ministry to bid for developing the country's vast oil fields.
Addax signed a contract with the semi-autonomous 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.