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Dana Gas, Kurdistan Regional Government deal may
become long-term
23.4.2007
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April 23, 2007
DUBAI, -- A service contract between the
semi-autonomous Iraqi Kurdistan Regional Government
(KRG) and the UAE’s Dana Gas may evolve into a
long-term production sharing agreement (PSA) once
Iraq’s oil law is passed, the KRG’s top energy
official said on Friday.
The PSA would be considered after Iraq’s pending oil
law is approved by parliament and if Dana Gas finds
significant gas reserves at fields in the region,
Ashti Hawrami, minister of natural resources in the
KRG told Reuters.
The KRG said on Wednesday it would reject annexes to
the oil law that propose giving central control to
fields containing over 80% of the country’s reserves
to a newly formed state-run national oil company.
“The annexes have yet to be discussed and currently
award 82% of Iraq’s oil and gas law to a centralised
Iraqi National Oil Company (INOC), which has yet to
be established and with no apparent accountability
for maximising returns for the Iraqi people,”
Hawrami said.
The KRG has previously signed several PSAs with
companies such as Norway’s DNO. The deals provoked
disputes with some members of Iraq’s central
government as they were signed long before Iraq’s
cabinet approved a draft oil law in February.
PSAs have drawn criticism from some nationalists as
they allow foreign oil companies to book reserves.
“The service contract is for a few years,” Hawrami
said.
“After that and subject to new legislation coming
into force, we will look at other possibilities. If
in the long run we might make it a production
sharing agreement, if there are additional resources
there.
What we like about Dana Gas is that it is in for the
long term. It is investing money upfront and not
just there to make a quick profit.”
The KRG and Dana Gas signed a $400mn contract
yesterday for the rapid installation of processing
and transmission facilities at the Khor Mor field to
begin supplying gas for power plants by January
2008.
Reuters
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