OIL GIANT Exxon Mobil’s confirmation at the weekend that it has entered Kurdistan is likely to boost interest in Irish explorer Petroceltic, which already has three licences in the semi-autonomous region to the north of Iraq.

Exxon announced it has acquired six oil exploration blocks in Kurdistan, a move that is seen as a major vote of confidence in the region’s oil production potential.

Three of the blocks are in central Kurdistan, two of which are directly adjacent to two licence areas acquired in late July by Petroceltic and US multinational, Hess. Speaking from Kurdistan yesterday, Petroceltic chief executive, Brian O'Cathain told The Irish Timesthat Exxon's move had validated the Irish company's decision to invest in the region.

Petroceltic’s move attracted criticism when it was announced last summer, as some analysts believed it was too risky and expensive.

“Having the world’s biggest quoted company as your next-door neighbour is quite a coup,” said Mr O’Cathain. Petroceltic’s share price rose 15 per cent on Friday as the market anticipated Exxon’s announcement, and investors bought into companies that already had an exposure to Kurdistan.

Mr O’Cathain said Exxon’s announcement could boost the Irish company’s shares further.

Petroceltic has 20 per cent of the Kurdistan blocks, which contain five prospects, any one of which has the potential to hold up to 500 million barrels of crude. Drilling is likely to begin there in early 2013, Mr O’Cathain said.

Exxon’s move is seen as particularly significant, as it will threaten considerable assets that it holds in Iraq, whose government disputes the Kurdish regime’s right to issue its own oil exploration licences.

Exxon’s decision to invest in Kurdistan indicates the US government is likely to back the Kurds against the Iraq government in that dispute.

Kurdistan’s constitution, which is recognised by both the US and United Nations, gives it, and not Baghdad, the right to issue oil and gas exploration licences.