ARBIL, Oct 3 (Reuters) - Iraq's Kurdish regional government (KRG) has approved
four new oil and gas deals that will attract around $500 million of investment
in exploration, the KRG said in a statement on its Web site.
The semi-autonomous KRG has struck five production sharing agreements (PSAs)
this year, despite objections from Baghdad. Iraq's oil minister said last month
that oil deals that the KRG had signed since February were illegal.
The KRG rejects Baghdad's claims that the deals breach the country's laws. The
region's government is in talks with a number of international and local
companies for further upstream and downstream projects, it said in the
statement.
The KRG said it signed a PSA with a subsidiary of Toronto-listed Heritage Oil
and Gas (HOC.TO: Quote, Profile, Research) for its Miran block. It signed
another with a subsidiary of French oil exploration and production company
Perenco for the Sindi/Amedi block.
Heritage signed a memorandum of understanding with the KRG for exploration in
2005 that analysts had expected to result in a PSA.
The KRG's oil and gas council has approved two more deals with international
companies that would be signed shortly, it said in the statement. The KRG did
not give the names of the two companies.
Holders of the PSAs would take 15 percent of the profits, while 85 percent would
go to Iraq, the KRG said. A deal signed with Hunt Oil in August was agreed on
the same terms, the KRG said.
Iraq's cabinet agreed a draft law for dividing the world's third-largest oil
reserves in February, but rows with the KRG as well as objections from some
Shi'ite and Sunni Arab politicians have slowed its progress.
Frustrated by Baghdad's delays, KRG approved its own oil law in August. It plans
to boost production to 1 million barrels per day (bpd) in about five years from
just a few thousand now.
The KRG oil and gas council has also approved projects to build two new 20,000
bpd refineries worth a total of around $300 million.
Heritage will build one in the Miran area. Toronto-listed Addax Petroleum (AXC.TO:
Quote, Profile, Research) and its Turkish partner Genel Enerji will build
another in the Taq Taq oilfield area.
Addax holds a PSA with the KRG for the Taq Taq oilfield. It plans to submit a $1
billion field development plan for the field that could bring output to 200,000
bpd by 2010.
