Iraqi Kurds sign seven new oil deals

IRBIL, Iraq, Nov. 6 (UPI) -- Iraq’s Kurdistan Regional Government has signed seven more oil deals, moves that are bound to irk Baghdad, which has called previous deals illegal.

The KRG announced the deals Tuesday as it moves forward in developing its own hydrocarbons sector. The leadership in Iraq’s national government has largely condemned the Kurdish moves, saying the region should wait until a national strategy for developing the country’s oil and gas reserves is agreed to.

A national oil law has been stuck for more than a year as negotiators are unable to decide on how much control the federal government should have over the world’s third-largest proven oil reserves and to what extent private and foreign oil companies should be allowed to invest.

The KRG had signed nearly a dozen production-sharing contracts before Tuesday. In August the KRG passed its own regional oil law and had signed three oil deals since.

“There has been great interest in Kurdistan’s exploration acreage,” KRG Minister of Natural Resources Ashti Hawrami said Tuesday in announcing the new contracts. “We are pleased to be able to meet that demand.”

Many of the world’s large firms are staying out of the KRG until a national oil law is passed, fearing it will upset Baghdad and miss out on action in the rest of the country.

Not all, however, feel that way, as Tuesday’s announcement suggests.

The KRG signed deals for two exploration blocks each with India’s Reliance Energy Ltd. and a subsidiary of Austria’s OMV.

One block each was awarded to a venture between subsidiaries of MOL Hungarian Oil and Gas and Gulf Keystone Petroleum Ltd.; a venture between Gulf Keystone Petroleum International Limited, Texas Keystone Inc. and Kalegran Ltd.; and another “western company, with details to be announced in coming days.”

The KRG statement said the contracts will send 85 percent of the profit of commercial discoveries back to Iraq, and the KRG reserves the right to assign up to 25 percent of the project to a third party and up to 25 percent to itself.

The KRG is also reviewing contracts signed prior to the regional oil law, as well as assigning four exploration blocks to a newly formed regional oil company.