Engyn in Iraq: Choosing Between Baghdad and Erbil

When the Iraqi Oil Ministry held its first licensing round after the fall of Saddam Hussein, more known oil reserves were put up for bid than at any other moment in history. Allured by the opportunity, the chief executive of Engyn Oil & Gas (a fictional firm) began exploring ways to enter the Iraqi market. The CEO soon discovered that the endeavor was fraught with risks. The biggest political minefield was the long running power-sharing dispute between the Kurds of northern Iraq and the central government. During Iraq’s post-war transition, the Kurds exploited ambiguity in constitutional provisions governing the country’s energy resources and made deals with foreign oil firms independent of the central government. Baghdad rejected the validity of the Kurds’ contracts and threatened to disqualify any company that maintained one from bidding on new deals through the Oil Ministry. When the Kurds offered Engyn a lucrative contract involving disputed territory near the flashpoint city of Kirkuk, the CEO was faced with a dilemma. Given two weeks to respond to the offer, the CEO had to determine whether signing a contract of uncertain legality with the business-friendly Kurds was worth alienating the central government and losing access to Iraq’s most prized energy resources in the south of the country. Available for purchase from European Case Clearing House and Harvard Business Publishing, link provided below.