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MarketWatch: Iraq-Kurdistan oil minister says in talks with oil majors

21 Sept 2006   

LONDON – The Kurdistan Regional Government in the north of Iraq is to sign oil contracts with companies next month, and is in talks with oil majors, its oil minister said Wednesday.

Ashti Hawrami, the KRG’s minister of natural resources, told reporters on the sidelines of a London briefing on the region’s oil sector: “We have been talking to oil majors about specific areas,” though he declined to say which companies were in the frame.

Officials from Royal Dutch Shell PLC (RDSB.LN), Eni SpA (E), BHP Billiton (BHP) and Statoil SA (STO) were among those at the briefing.

The region’s long-planned draft petroleum law “is ready to go to the parliament of the KRG this month or next,” he added, and he expects it to be passed by lawmakers in October.

Among the thorny issues surrounding Kurdish oil production within Iraq is who gets the revenue – the KRG or the government in Baghdad.

Hawrami said: “Kurdistan has no intention of withholding revenues from Baghdad ” from new oil fields to be developed in the undisputed territories in Iraqi Kurdistan.

Although northern Iraq’s oil reserves aren’t as big as the giant southern fields around Basra, geologists say the north still has good potential, especially as the area is largely unexplored and modern techniques such as seismic imaging have never been used in Iraq.

The regional government estimates northern Iraq’s reserves at around 45 billion barrels of oil and 100 trillion cubic feet of gas.

Oil companies are attracted to Kurdistan because of its relative safety and high levels of security compared with the rest of Iraq where it is virtually impossible for foreign oil companies to work.

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