LONDON, Dec. 17 (UPI) -- Developing the oil export potential in the Kurdish region of Iraq will help secure the future of a united country, the British energy minister said Wednesday.
Iraqi, Kurdish and other regional players gathered in London for an investment conference, two weeks after agreements in Iraq ended long-standing disputes over who has what level of control over the nation's oil sector.
British Energy Minister Matthew Hancock said investors need to stand by Iraq now that security and the political climate have improved. By 2040, he said, Iraqi crude oil production could triple to just over 8 million barrels per day.
"Reserves in Kurdistan play a significant role in this increase," he said. "Development and export opportunities in the Kurdistan region will play a very important role in the future energy sector of a united Iraq."
Gulf Keystone Petroleum, an energy company with headquarters in London, announced this week it linked oil wells in the Shaikan field to production facilities in the Kurdish north of Iraq.
With its partners at Hungarian energy company MOL, the company said the addition should increase total regional production from a combined average of 24,000 barrels of oil equivalent per day to 40,000 boepd.
Both companies said crude oil taken from the Shaikan reserve area was making its way to the export market from the Turkish coast.
Exports of Kurdish oil have sparked legal battles between the semiautonomous Kurdistan Regional Government and the central government in Baghdad. KRG under the terms of the agreement funnels 250,000 barrels of oil per day to Baghdad and agrees to use the federal State Oil Marketing Organization for sales.
Security threats posed by the group calling itself the Islamic State and the collapse in crude oil prices may dampen expectations in the Iraqi oil sector short term.
"All parts of the country and population must see investment and the right conditions for prosperity, creating a vibrant private sector," the British official said. "Iraq's economic development will be vital for its political future and stability."
