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Iraqi Kurds' new oil deals a major move

Nov. 13, 2007 at 9:18 AM   |   Comments

IRBIL, Iraq, Nov. 13 (UPI) -- Iraq's Kurds have exercised their prerogative to develop their oil sector, to Baghdad's ire, by signing another five oil deals with international firms.

The Kurdistan Regional Government, which runs three provinces in Iraq, announced the deals Monday, which included some major developments.

Among the contractors are an affiliate of TNK-BP, the Russian arm of major BP; the Korea National Oil Corp.; and two U.S. oil companies.

Iraq's Oil Ministry has decried such moves, including the seven deals the KRG announced last week, calling them illegal for acting unilaterally and without a national oil law to regulate the entire Iraq hydrocarbons sector.

Oil companies also risk being blacklisted from the rest of Iraq for entering into deals with the KRG. While the entire country is underexplored and expected to have twice as much as what is currently known, the KRG controls less than 1 percent of Iraq's 115 billion barrels of proven reserves -- the third largest in the world.

Until now, it has been smaller, independent firms with a tolerance for risk that have signed with the KRG. Hunt Oil, the well-connected Dallas-based firm, was the first U.S. company to sign a production-sharing contract with the KRG.

"These five PSCs are yet another clear expression of confidence in the strength and stability of the Kurdistan Region," KRG Natural Resources Minister Ashti Hawrami said in a statement, "and they produce very comprehensive returns for the people of Iraq."

Norbest Limited, the TNK-BP affiliate, was awarded a PSC for four exploration blocks. Korea National Oil Co.'s subsidiary KNOC Bazian Limited led a consortium of Korean firms for an exploration block.

Also awarded single exploration blocks were subsidiaries of Hillwood International Energy, the company of Ross Perot Jr., Denver-based Aspect Energy and British-based Sterling Energy.

© 2007 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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