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Iraq KRG oil minister explains oil deal breakdown
"Bear in mind all exploration takes three to five years before we get to a point that we potentially export," said Ashti Hawrami, natural resources minister of the Kurdistan Regional Government.
Speaking with United Press International at the start of his visit to the United States, Hawrami said the controversial exploration and production deals the KRG has signed has it on track to contribute to Iraq's oil sector.
"Our focus for all of this activity will be around 1 million barrels a day in five years' time," Hawrami said. "This is all new oil that Iraq never had and the way the Oil Ministry in Baghdad is going it never would have had. So we're doing a big favor for the Iraqi people."
Baghdad says the KRG is acting unilaterally by signing its own oil deals -- let alone implementing its own oil law -- while a national law governing the oil sector is stuck and consensus as to the contracting rights has not been reached.
He said currently there is no oil being produced in the KRG, aside from test oil from the Tawke oil field. Danish firm DNO won the production-sharing contract for the field in 2004 and is now doing "preparatory work for the long-term production," Hawrami said.
Another field, Taq Taq, signed to a joint venture between Turkey's Genel Enerji and Canada's Addax Petroleum (OTCBB:ADXTF), will also contribute to short-term production in the KRG, he said.
"Within about two years: 200,000 (barrels per day), building up to 350,000, and then building up to a million within five years," Hawrami said. Iraq has averaged about 2 million barrels per day since 2003, though in recent months tighter security has increased it to nearly 2.5 million bpd.
He said most of it will be exported, though tensions with Baghdad, as well as Turkey, Syria and Iran -- with fears their Kurdish populations will be emboldened by Iraqi Kurdish success -- are likely to block any export routes.
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Ben Lando, UPI Energy Editor
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(e-mail: blando@upi.com)