KRG hopes to announce new oil block deals with majors next month

LONDON - Reuters

An employee works at the Tawke oil fields in northern Iraq. Iraqi Kurdish officials announce that the regional government is in talks with major international companies for operation of its oilfields. AP photo

The Kurdistan Regional Government (KRG) is negotiating with two or three major international companies to operate oilfields and expects to announce the outcome in about a month, said officials, in a move likely to further heighten tensions with Baghdad.

The remarks by KRG’s Natural Resources Minister Ashti Hawrami on Jan.29 highlight the autonomous region’s resolve to push ahead with development of its oil resources independently of the Baghdad-
based central government. 

Kurdistan has upset the central government by signing deals directly with oil majors such as Chevron Corp and Exxon Mobil, providing lucrative production-sharing contracts and better operating conditions than in the south of the country. 

Hawrami stated last week that Kurdistan, which is in the north of Iraq and has run its own administration and armed forces since 1991, had awarded Chevron a stake in the Qara Dagh oil block.

 “We are negotiating with two to three other significant companies. They will hopefully be announced in a month or so,” Hawrami told reporters on the sidelines of a conference in London. He also said Exxon Mobil’s contentious deal to operate in the autonomous region was on track. 

Baghdad issued Exxon an ultimatum this week, telling the American oil major it must choose between operating in the north or the south, after Exxon’s chief executive Rex Tillerson had meetings in both regions. 

KRG stopped contributing exports to Iraq’s pipeline from Kirkuk in the north to the Turkish port of Ceyhan in December.

Exports by truck to restart
Meanwhile, exports by truck stopped two or three weeks ago, Hawrami said, but they should resume next week and rise to around 20,000 barrels per day of crude and the exports would begin with a limited amount of condensate , very light oil.

Condensate exports by truck to Turkey began last summer, and hit a high this month, despite the stoppage. Exports of crude oil from the Kurdistan’s Taq Taq oilfield started at the beginning of January this year. 

“We are working on some procedures to have a clear monitoring and metering system at the border before we allow further exports.”

The central Iraqi government in Baghdad has repeatedly stated that it considers independent exports from the KRG as smuggling.