Iraq Energy Roundup

By BEN LANDO, UPI Energy Editor  |  Oct. 10, 2008 at 2:53 PM
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Iraqi oil and gas field bidding starts Monday.

Iraq's Oil Minister Hussain al-Shahristani will lead a delegation to London, where companies prequalified to bid on a handful of oil and gas fields will hear details of the terms on Monday.

Iraq is beginning a process to allow foreign investors to develop oil and gas fields. Details of the investment options -- including the exact fields, contract types and return on investment -- have been in the rumor mill but not confirmed by the ministry.

On Monday, Shahristani will give these details and specifics on the fields, so companies can decide which fields to bid on. The deadline for bidding is expected to be early next year. Later this year another group of fields is to be offered to bidders.

Gas in Iraqi Kurdistan comes online.

Partners Dana Gas and Crescent Petroleum have begun production, processing and transport of gas from the Kor Mor field in Sulaimaniya province. It's part of a service contract the companies have with the Kurdistan Regional Government of Iraq.

Dana Gas is partially owned by Crescent.

"The aim is to replicate some similar projects to make sure that in the end we will end shortages and hopefully export to the rest of Iraq," KRG Minister of Natural Resources Ashti Hawrami said.

The oil and gas chief of Iraqi Kurdistan says the region will develop its natural gas resources to provide electricity to its residents and a planned industrial center called Kurdistan Gas City.

The groundbreaking for Gas City -- an industrial, residential and commercial services development -- has been delayed, but officials involved say it is still going to happen.

Currently 75 million cubic feet per day of gas is flowing to the new Erbil power plant from Kor Mor, with the goal of 300 million by mid-2009, as it and a new plant in Sulaimaniya together reach 1,250 megawatts generating capacity.

Dana Gas and Crescent Petroleum announced Saturday they began sending gas from their Kor Mor field in Sulaimaniya through a new 112-mile pipeline.

Rumors of oil law deal as Barzani heads to Baghdad.

An Iraqi parliamentarian from the Kurdistan Coalition, Bayazid Hassan, told local media the long-held oil law may be heading to Parliament. Hassan is a member of the Parliament's Oil and Gas Committee.

Movement of the law has not been confirmed by other members or experts on the ground.

The Kurdish Globe reports Hassan said there had been an agreement between proponents of a decentralized oil sector -- the Kurdistan Regional Government -- and those who support a strong central government, including Iraqi Oil Minister Hussain al-Shahristani.

The law has been sidelined as disputes between the sides included issues like oil deals signed by the KRG.

"Undoubtedly, those issues are to be solved later either by the Federal Court of Iraq or the national Oil and Gas Law will find a solution for the issue after its approval," said Hassan.

The Kurdish Globe also reports KRG President Massoud Barzani will lead a delegation to Baghdad to discuss with national leaders issues including the oil law.

Iraqi President and Kurdish leader Jalal Talabani said after a Kurdish political leadership session "the meeting discussed the regional president's visit to Baghdad for negotiations on finding solutions to the current problems."

Oil search spuds, Addax farmed in.

Drilling has begun on the Shakal block in the KRG. It's operated by Australia's Oil Search with Turkey's Petoil and the KRG as partners.

"No further releases will be made, unless there is a material or share price sensitive outcome," the company said in a statement.

Meanwhile, Canada-registered Addax Petroleum was made a 33.33 percent stakeholder of the London-based Sterling Energy-operated Sangaw North block in the KRG. The Korean National Oil Corp. also now holds a 20 percent third-party interest.


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