Russia’s Gazprom Neft is reported to have acquired its third exploration block in Iraqi Kurdistan, defying Baghdad’s opposition to such deals with the semi-autonomous northern region.
The oil production arm of gas giant Gazprom has secured an 80% operating stake in the Halabja project, with reserves estimated at between 630 million and 790 million barrels, Russian newswire Interfax reported on Tuesday.
“We are the operators of the project. Our immediate task is to map out an exploration and research programme. Investments have not been defined yet. The exploration period will last seven years,” Gazprom Neft’s deputy chief executive Vadim Yakovlev was quoted as saying.
Last week, Masoud Barzani, president of the Kurdistan Regional Government (KRG), said Gazprom Neft had signed new agreements with the KRG, without disclosing details.
The company acquired interests in two other Kurdistan blocks – Garmian and Shakal – last August, following similar deals struck with international oil companies such as ExxonMobil, Total and Chevron that the Iraqi government deems illegal.
Gazprom Neft risks incurring the wrath of the Baghdad regime as it seeks to develop the Iraq-controlled Badra oilfield, with reserves of around 3 billion barrels, that is due to come on stream in 2017.
The federal government reportedly sent an ultimatum to the Russian company last November warning that it could lose its 30% operated stake in the field unless it pulled out of Kurdistan.
Iraq has meeted out similar treatment to other players such as Total and ExxonMobil.
However, Yakovlev said Gazprom Neft has not been notified by the Iraqi government of any wrongdoing.
Production sharing contracts being offered by Kurdistan to develop its prospective acreage are seen as more lucrative by foreign players than technical service deals on offer in Iraq as they gain a greater share of oil revenue.
However, Baghdad denies that the KRG has the right to sign such deals under Iraq’s constitution, which has led to Iraq withholding export payments to foreign producers in Kurdistan in the ongoing dispute over territorial rights and resource sovereignty.
Source: Upstream Online