|
Iraqi Kurdistan government planning to offer 40 new
oil blocks to foreign companies
30.6.2007
|
|
|
|
June 30, 2007
LONDON , -- Iraq's northern autonomous
Kurdistan government on Friday said it's planning to
offer 40 new oil blocks to foreign companies in a
sign that it said, reflects its confidence Iraq is
close to reaching a final deal on the country's
long- delayed hydrocarbons law.
"We wouldn't be announcing details of these blocks
if we were not confident that things are moving
ahead with the oil law in Baghdad," Kurdish Oil
Minister Ashti Hawrami told Dow Jones Newswires by
telephone from Erbil, the Kurdistan capital.
"The time has come for Kurdistan to move forward
with its oil plans," he said.
Baghdad and Erbil recently reached agreement on how
Iraq's oil revenues will be shared and distributed,
a key stumbling block, although other barriers
remain to a final deal - which must be approved by
Iraq's parliament - such as how much authority
Iraq's national oil company will have.
Hawrami said the Kurdish oil blocks will be formally
opened to competitive bidding once the Kurd's own
petroleum law is approved by the Kurdish parliament.
Hawrami said the parliament could meet in the next
month or two to take up the Kurdish petroleum law.
The Kurds will hold conferences in the coming months
in Erbil, London and possibly Houston to tell
investors about the tendering of the oil blocks,
some of which lie next to the Turkish and Iranian
borders. Hawrami said priority in the awarding of
blocks will be given to companies that can quickly
organize themselves and start the oil exploration
process.
The Kurds are targeting oil production from the
Kurdish region of 200,000 barrels a day in 2008 and
a lofty 1 million barrels a day in five years time.
Iraq currently produces around 2 million barrels a
day.
Hawrami said Baghdad and the Kurdish government were
still in discussion over certain matters of Iraq's
hydrocarbons law, such as how much of Iraq's oil
reserves will go into the hands of the Iraq National
Oil Company, or INOC, but said he was "confident
these issues will be resolved soon."
"We are quite comfortable giving INOC as much oil as
it can cope with, but we need a commitment in law
that such authority abides by certain principles,"
Hawrami said. "We don't want oil blocks going
undeveloped because they can't do the work," he
said, declining to elaborate.
Baghdad has said it wants to give Iraq's new company
INOC almost 93% of the country's proven petroleum
reserves, which are among the biggest in the world.
Iraq and the U.S. hope the country's oil law, once
approved, will provide a pathway toward Iraq's
physical reconstruction and reconciliation between
the country's warring factions.
While all major energy companies are eager to win
exploration licenses in Iraq, nearly all have said
they won't start any work on the ground until
security improves. Erbil and Baghdad have made
substantial progress on reaching agreements on other
big elements of the draft law, like how oil revenues
will be distributed, but lingering dissent over the
oil law remains.
This week, the State Shura Council, which consists
of Iraq's top judges, rejected some clauses in the
draft oil and gas law and urged Iraq's Cabinet to
amend provisions.
The council said the Cabinet did not provide them
with models of contracts that were mentioned in the
draft oil and gas law.
The Kurds already have five existing contracts with
some relatively small foreign companies although
none of those firms, which include Norway's DNO ASA
(DNO.OS), is allowed to produce and export any oil
commercially until Iraq's hydrocarbons law is in
place.
Hawrami said he was confident the production-sharing
contract model to be offered under the Kurdish
petroleum law would meet international standards and
comport with Iraq's hydrocarbons law.
Some of the terms of such contracts would include an
initial exploration license term of five years,
renewable on annual basis for up to seven years, 10%
royalties on oil production, and cost recovery for
producers of no more than 45% on oil projects and
60% for natural gas projects.
The Kurdish government's participation in projects
with foreign companies can vary from 10% to 25%,
according to the Kurdish draft law.
nasdaq com
Top |
Kurd Net
does not take credit for and is not responsible for the content of news
information on this page
|
® 