IRBIL, Iraq, Oct. 2 (UPI) -- Iraq’s Kurdistan Regional Government has announced four more controversial oil deals, despite Baghdad’s condemnation, and says more are on the way.
The KRG said in a statement that an initial $500 million will go toward upstream exploration projects now the deals have been signed.
“The projects will spearhead international investment for the whole of Iraq,” KRG Natural Resources Minister Ashti Hawrami said in the statement.
Companies involved in two of the production-sharing contracts have been announced: a subsidiary of the Canadian firm Heritage Oil and Gas and a subsidiary of the French firm Perenco S.A. The other two deals will be detailed soon, the statement said.
The KRG also announced contracts to build two new oil refineries with 20,000 barrels per day capacity each, sorely needed in Iraq, which suffers from extensive fuels shortages.
The KRG controls three relatively violence-free and semiautonomous provinces in Iraq’s north. Very little of Iraq’s 115 billion barrels of proven reserves are in the KRG area, but the country as a whole is under-explored and it is expected that the KRG has much potential.
A federal oil law governing the Iraq oil sector is stuck in Parliament. The KRG in August passed its own regional oil law. The KRG already signed a number of various contracts for its oil sector. Most recently was a deal with Hunt Oil, the Dallas-based firm, which the Iraq Ministry of Oil called “illegal.”
The KRG issued a stinging rebuke, calling for the minister to work toward passing the federal law or resign.
The KRG says it is not finished signing contracts to explore its region. Critics of both the KRG move and production-sharing contracts in general say Iraq will be deprived of maximum return on the oil.
Hawrami points to a federal revenue-sharing law -- which has yet to be agreed to -- to ensure oil funds are collected and distributed fairly.
The KRG hasn’t published the actual language of the specific contracts it has signed, but in the statement released Tuesday it said the PSCs “will provide an estimated aggregate return/profit of over 85 percent to Iraq and around 15 percent to the contractors.”
