LONDON (Dow Jones Newswires), Nov. 30, 2010
The semi-autonomous government of Iraq's Kurdistan region wants new hydrocarbon and revenue-sharing laws by June 2011 as a condition of its participation in a new Iraqi administration, the Kurdistan Regional Government's minister for natural resources said Tuesday.
Speaking at an Iraqi oil conference here, Ashti Hawrami also said there should be no more blacklisting by the Baghdad government of oil companies working in the KRG region, and criticized the government's new oil production target.
Baghdad and the KRG are at loggerheads over production-sharing agreements signed by the Kurds. The federal government argues these deals are illegal because they haven't been approved, while the Kurds say they are in line with the constitution.
Hawrami said eight new oil discoveries have been made in the KRG region in the past two-to-three years, and said the KRG has signed 37 contracts with 40 companies, resulting in $10 billion investment in the oil sector, notably in exploration and production. He also said three refineries have been commissioned, with a total capacity of 200,000 barrels a day, and three power plants have been built, providing over 80% of the region's power needs.
Kurdish oil production "can reach 1 million barrels a day by January 2014," Hawrami said, adding there is "between 100-200 billion cubic feet of [non-associated] natural gas in the KRG." However, he criticized Iraq's oil production target of 12 million barrels a day in the next 10 years.
"Let's be mindful of the market, let's be mindful of our OPEC partners," he said. "Let's make it 4 million, let's make it 6 million."
Hawrami later held a news conference in which he said the KRG is ready now to start exporting 100,000 barrels a day, to increase to 150,000 barrels a day by the end of 2011 or early 2012.
"We are happy to start with 100,000 barrels a day," he told reporters.
He said the crude oil would be exported from two Kurdish fields, Taq Taq and Tawke. The latter is already connected by the Iraqi northern export pipeline to Turkey's Mediterranean port of Ceyhan, while oil will be shipped by trucks from the former to the delivery point.
The KRG exported oil from the two fields for around four months last year but suspended the flow pending the central government agreeing to pay back contracting foreign companies.
Around 40 companies, including Norway's DNO International, have invested in Kurdistan but their revenues have been curtailed by being unable to sell oil for export because Baghdad has previously deemed the contracts illegal.
Copyright (c) 2010 Dow Jones & Company, Inc.
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