Sunday, November 11, 2007
KRG to announce two more oil deals
Oil, Kurdistan
(UPI) -- Iraq’s Kurdistan Regional Government will announce two more oil deals in coming days as it develops its oil sector with state-owned and private oil firms. There has been no response yet from Baghdad after the KRG’s announcement last Tuesday of another six production-sharing contracts it has signed. The KRG’s semiautonomous region in Iraq’s north has the geological makeup for major oil and natural gas deposits but has 0.5 percent of Iraq’s proven oil reserves.
Baghdad has called the KRG’s oil deals illegal, saying it needs to wait for a national oil law to be approved. That law is being held up for lack of agreement as to whether the federal government or regions and provinces have the authority to sign deals, among other reasons. KRG Natural Resources Minister Ashti Hawrami told United Press International in a telephone interview two additional oil deals, including at least one with “a Western company,” will be announced “in just a few days, maybe a week.” According to a KRG map of exploration blocks, it has 28 either open or pending contracts.
The KRG has signed deals with a number of smaller, more risk-taking firms, including Hunt Oil of Dallas. Larger firms fear blacklisting from Baghdad, which will likely have the say-so on the majority of Iraq’s oil deals. But Tuesday’s announcement of deals by the KRG shows the applicants for its deals are getting weightier. A subsidiary of MOL Hungarian Oil and Gas was part of two production-sharing contracts. India’s largest private oil company, Reliance Energy, and Central Europe powerhouse OMV, an Austrian firm, each signed two production-sharing contracts.
The KRG also awarded four “strategic blocks” to the Kurdistan Exploration and Production Co. and gave the discovered but not developed Khurmala oil field to the Kurdistan National Oil Co. Both KEPCO -- which will concentrate on exploration and production -- and KNOC -- an operator of discovered fields -- were newly formed under the KRG’s oil law but would send revenues to Baghdad to redistribute. Hawrami said the companies “answer to the Council of Ministers in Kurdistan and is monitored and regulated by the Ministry of Natural Resources in Kurdistan, and is recognized by the Parliament in Kurdistan.” KNOC will also build a 50,000 barrels per day refinery.
Labels: Hunt Oil Co., Khurmala oil field, Kurdistan, Kurdistan Exploration and Production Co., Kurdistan National Oil Co., MOL Hungarian Oil and Gas, oil, oil deals, OMV, PSCs, Reliance Energy
Monday, October 08, 2007
Barzani defends Kurdistan's oil deals
Oil, Kurdistan
(AP) -- The leader of Kurdistan on Sunday defended his self-governing region's oil deals with international companies, saying the agreements were not an attempt to usurp the nation's oil resources but a way to make them work for all the people of Iraq. Prime Minister Nechirvan Barzani, who wrote an opinion piece published in the Wall Street Journal, said eight contracts already had been signed and two more were expected soon.
The central government in Baghdad is upset about the deals, saying the Kurds should wait until the passage of a national oil law before signing any new contracts. But Barzani countered that the agreements are allowed under the Iraqi constitution, "which gives the regions of Iraq substantial control over natural resources."
"Many in the Iraqi Oil Ministry are locked in a time warp dating back to the regime of Saddam Hussein, in which Baghdad holds tight control of all the resources of Iraq and uses these resources to create obeisance and loyalty to the center," Barzani said.
If exploration leads to oil production, 85 percent of the profits would go to the government and the remainder would go to the companies. The profits would then be split -- giving 83 percent to the central government in Baghdad and 17 percent to the Kurds, Barzani sad. "We want peace and prosperity for the rest of Iraq as well," Barzani said. "We will contribute our fair share and more to that goal."
The Iraqi Cabinet approved a draft oil law last February and forwarded it to parliament, but parliament, citing legal technicalities, kicked it back to the Cabinet. The measure has been bogged down in negotiations ever since. Last August, the Kurds enacted their own oil law to regulate the oil sector in the region, further angering the central government in Baghdad.
"We waited five months for the Iraqi Assembly to pass the agreed draft. They have not acted and there is no sign that they will act anytime soon. We decided to lead from the front," Barzani said in Sunday's letter. "We are not a rogue province seeking an early escape from the chaos that has become Iraq."
The central government in Baghdad is upset about the deals, saying the Kurds should wait until the passage of a national oil law before signing any new contracts. But Barzani countered that the agreements are allowed under the Iraqi constitution, "which gives the regions of Iraq substantial control over natural resources."
"Many in the Iraqi Oil Ministry are locked in a time warp dating back to the regime of Saddam Hussein, in which Baghdad holds tight control of all the resources of Iraq and uses these resources to create obeisance and loyalty to the center," Barzani said.
If exploration leads to oil production, 85 percent of the profits would go to the government and the remainder would go to the companies. The profits would then be split -- giving 83 percent to the central government in Baghdad and 17 percent to the Kurds, Barzani sad. "We want peace and prosperity for the rest of Iraq as well," Barzani said. "We will contribute our fair share and more to that goal."
The Iraqi Cabinet approved a draft oil law last February and forwarded it to parliament, but parliament, citing legal technicalities, kicked it back to the Cabinet. The measure has been bogged down in negotiations ever since. Last August, the Kurds enacted their own oil law to regulate the oil sector in the region, further angering the central government in Baghdad.
"We waited five months for the Iraqi Assembly to pass the agreed draft. They have not acted and there is no sign that they will act anytime soon. We decided to lead from the front," Barzani said in Sunday's letter. "We are not a rogue province seeking an early escape from the chaos that has become Iraq."
Labels: draft oil law, Kurdistan, Massoud Barzani, oil deals
Thursday, October 04, 2007
Kurdistan signs four more oil deals
Oil, Kurdistan
AFP) - Iraq's Kurdistan regional government announced four more oil deals on Wednesday, ignoring criticism from Prime Minister Nuri al-Maliki's government and Washington of its unilateral sell-off of the country's national resources. The regional government said in a statement posted on its website that it had approved four contracts for exploration and production, and had sanctioned two new refinery projects in the Kurdish autonomous region in northern Iraq.
Two production sharing contracts (PSCs) had already been signed, with Heritage Energy Middle East Limited, a subsidiary of the Canadian firm Heritage Oil and Gas, and Perenco S.A., an affiliate of a French company of the same name. "The signing of the other two PSCs with experienced international companies will follow shortly," the statement said.
"The combined initial exploration investments on the upstream projects will be approximately 500 million dollars," it said. "Estimated investment on the two new refinery projects will be around 300 million dollars."
The Iraqi oil ministry did not immediately comment on the new deals, but Amira al-Baldawi, an MP from the Shiite coalition that leads the Baghdad government and a member of parliament's economic, investment and reconstruction committee, said the contracts were "illegal". "They shall be revised and put in accordance to the Iraqi law and the new oil law to be issued," Baldawi told AFP.
Last month, the Kurdish regional government inked a deal with Texas-based Hunt Oil Company, the first major oil contract awarded by any Iraqi authority to a foreign company since UN sanctions were imposed on Iraq when it invaded Kuwait in 1990. No details of the contract have been released but the Dallas company, which has links with the White House, has said it would begin its geological survey work in Dohuk province, near the border with Turkey, by the end of this year and would begin drilling in 2008.
The Hunt contract was declared "illegal" by Iraqi Oil Minister Hussein al-Shahristani, sparking a war of words with the regional government, which told him to stop meddling in its affairs and said he should be sacked. A senior US embassy official speaking on condition of anonymity told reporters in Baghdad last week that the Hunt deal had "needlessly elevated tensions" in Iraq. He said the US State Department had advised Hunt to wait for the Iraqi parliament to pass a much-anticipated oil and gas law that will establish a new framework for the industry but that it went ahead anyway.
The bill opens up the long state-dominated oil and gas sector to foreign investment and provides assurances that receipts will be shared equally between Iraq's 18 provinces, a measure Washington regards as key to efforts to reconcile the country's divided communities. The draft law was approved by Prime Minister Nuri al-Maliki's national unity cabinet in July but faces a tough passage in the 275-seat parliament, where the Kurdish bloc has 53 seats. The bill is expected to come before MPs this month.
The regional government said the PSC awarded to Energy Middle East Limited covered the 1,015 square kilometre (406 square mile) Miran Block in Sulaimaniyah Governorate, "a low to medium exploration risk area." Perenco S.A. has been awarded the "high exploration risk" 2,358 square kilometre (943 square mile) Sindi/Amedi Block along the Turkish border.
Regional natural resources minister Ashti Hawrami defended the deals. "The projects will spearhead international investment for the whole of Iraq," he said. "New oil discoveries under these contracts will bring large amounts of new revenues for sharing throughout Iraq."
Two production sharing contracts (PSCs) had already been signed, with Heritage Energy Middle East Limited, a subsidiary of the Canadian firm Heritage Oil and Gas, and Perenco S.A., an affiliate of a French company of the same name. "The signing of the other two PSCs with experienced international companies will follow shortly," the statement said.
"The combined initial exploration investments on the upstream projects will be approximately 500 million dollars," it said. "Estimated investment on the two new refinery projects will be around 300 million dollars."
The Iraqi oil ministry did not immediately comment on the new deals, but Amira al-Baldawi, an MP from the Shiite coalition that leads the Baghdad government and a member of parliament's economic, investment and reconstruction committee, said the contracts were "illegal". "They shall be revised and put in accordance to the Iraqi law and the new oil law to be issued," Baldawi told AFP.
Last month, the Kurdish regional government inked a deal with Texas-based Hunt Oil Company, the first major oil contract awarded by any Iraqi authority to a foreign company since UN sanctions were imposed on Iraq when it invaded Kuwait in 1990. No details of the contract have been released but the Dallas company, which has links with the White House, has said it would begin its geological survey work in Dohuk province, near the border with Turkey, by the end of this year and would begin drilling in 2008.
The Hunt contract was declared "illegal" by Iraqi Oil Minister Hussein al-Shahristani, sparking a war of words with the regional government, which told him to stop meddling in its affairs and said he should be sacked. A senior US embassy official speaking on condition of anonymity told reporters in Baghdad last week that the Hunt deal had "needlessly elevated tensions" in Iraq. He said the US State Department had advised Hunt to wait for the Iraqi parliament to pass a much-anticipated oil and gas law that will establish a new framework for the industry but that it went ahead anyway.
The bill opens up the long state-dominated oil and gas sector to foreign investment and provides assurances that receipts will be shared equally between Iraq's 18 provinces, a measure Washington regards as key to efforts to reconcile the country's divided communities. The draft law was approved by Prime Minister Nuri al-Maliki's national unity cabinet in July but faces a tough passage in the 275-seat parliament, where the Kurdish bloc has 53 seats. The bill is expected to come before MPs this month.
The regional government said the PSC awarded to Energy Middle East Limited covered the 1,015 square kilometre (406 square mile) Miran Block in Sulaimaniyah Governorate, "a low to medium exploration risk area." Perenco S.A. has been awarded the "high exploration risk" 2,358 square kilometre (943 square mile) Sindi/Amedi Block along the Turkish border.
Regional natural resources minister Ashti Hawrami defended the deals. "The projects will spearhead international investment for the whole of Iraq," he said. "New oil discoveries under these contracts will bring large amounts of new revenues for sharing throughout Iraq."
Labels: draft oil law, Heritage Energy Middle East Limited, Hunt Oil Company, KRG, Kurdistan, oil deals, Perenco S.A., PSCs, refinery projects
Monday, March 19, 2007
Russia worried about being frozen out of Iraqi oil deals
Oil, Business
(Reuters) - Russia, worried its firms may be frozen out of oil deals in Iraq, said on Monday it hoped a draft law regulating how Iraq's oil wealth is distributed will ensure Russian companies do not suffer discrimination. Moscow opposed the U.S.-led invasion of Iraq in 2003. It is concerned that when the Iraqi government starts handing out new concessions, Russian companies will lose out to firms from countries that backed the military operation.
The draft law, which was approved by Iraq's cabinet last month and now awaits approval by parliament, is seen as a key step to opening up Iraq -- home to the world's third largest oil reserves -- to foreign investment.
"The Russian side noted the importance of the adoption of an Iraqi law on hydrocarbons which correspondents to international standards," Russia's foreign ministry said in a statement.
"(Russia) expressed the hope that it (the law) will allow non-discriminatory access for companies from a variety of countries, including Russian firms, to the Iraqi oil and gas market, and underlined the readiness of Russian companies to participate in rebuilding Iraq's economy." Russian companies, led by oil major, signed deals to develop Iraqi reserves with the former administration under Saddam Hussein. These have been on hold since the invasion.
The draft law, which was approved by Iraq's cabinet last month and now awaits approval by parliament, is seen as a key step to opening up Iraq -- home to the world's third largest oil reserves -- to foreign investment.
"The Russian side noted the importance of the adoption of an Iraqi law on hydrocarbons which correspondents to international standards," Russia's foreign ministry said in a statement.
"(Russia) expressed the hope that it (the law) will allow non-discriminatory access for companies from a variety of countries, including Russian firms, to the Iraqi oil and gas market, and underlined the readiness of Russian companies to participate in rebuilding Iraq's economy." Russian companies, led by oil major, signed deals to develop Iraqi reserves with the former administration under Saddam Hussein. These have been on hold since the invasion.
Labels: draft oil law, natural gas, oil deals, Russia
