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Kurdistan-Korean oil deal, a new deal or just a
reaffirmation?
16.2.2008
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February 16, 2008
SEOUL, South Korea - Media reports from Seoul
say Iraq's Kurds have signed deals for oil and other
projects with a South Korea consortium, but details
are sketchy.
If so, the move would heighten current tensions
between the Kurdistan Regional Government (KRG) and
Iraq's central government, and mark a departure from
the previous 20 controversial oil deals that were
announced with fanfare by the KRG itself.
The Korea Times reports the Korean National Oil
Corp. was
granted rights to oil
fields in the three provinces in Iraq's north that
make up the KRG. It also reported a consortium led
by Ssangyong Engineering & Construction,www.ekurd.net
Doosan Construction &
Engineering and Kukdong Engineering & Construction
was awarded a $10.5 billion package to build roads,
power plants and other "social infrastructure."
It was announced as KRG Prime Minister Nechirvan
Barzani led a delegation to South Korea and held
meetings that included with President-elect Lee
Myung-bak. |
South Korean President-elect Lee Myung-bak, (L),
shakes hands with Nechirvan Barzani, Iraq's
Kurdistan regional government prime minister, during
their meeting in Seoul, South Korea, Thursday, Feb.
14, 2008 |
It's not clear whether this is a new deal or just a
reaffirmation of an exploration and
production-sharing contract announced by KRG Natural
Resources Minister
Ashti Hawrami in November.
A KNOC-led consortium of South Korean companies was
awarded that contract. The Korea Times twice
mentioned it as a new deal.
The Financial Times, however, reports the deal
announced in Seoul Thursday "would give it a
foothold" in the KRG's small but highly prospective
oil sector. It also reported Barzani and KNOC
signed a
memorandum of understanding on an oil deal and in
exchange South Korea would have to build a $2
billion highway and $10 billion in social
infrastructure.
The Kurds control little of Iraq's proven reserves
of 115 billion barrels -- the third largest in the
world. Iraq is highly under explored and the KRG has
been pressing hard for control over signing such
deals -- and soon. Frustrated by stalled
negotiations with Baghdad over an oil law that would
set guidelines for control as well as foreign
investment,www.ekurd.net
the KRG passed its own
oil law in August.
Since then, the KRG released a handful of dramatic
announcements that it had signed deals for foreign
firms to explore for and produce oil in its area.
Iraqi Oil Minister Hussain al-Shahristani has called
such deals illegal and threatened to blacklist any
such firm from being awarded deals in upcoming
bidding rounds for non-KRG projects. The ministry
has already cut off two companies from oil
purchases: Austria's OMV and SK Energy, South
Korea's largest refiner and a partner in the KNOC-led
contract with the KRG.
The visiting head of Iraq's Kurdistan regional
government said that a new energy project signed
Thursday with South Korean companies does not
violate Iraq's basic law.
"It was within the constitutional rights," Kurdistan
Prime Minister Nechirvan Barzani told reporters.
UPI
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