The Kurdistan Regional Government (KRG) welcomes yesterday's announcements by MOL, OMV and UAS partners of further investments in the Kurdistan Region. These investments will accelerate the development of local gas resources, ensuring the commercial viability of the Nabucco pipeline project linking Turkey to Central Europe.
MOL and OMV have announced that they will make major investments to access natural gas from the Kurdistan Region for export. Under the prevailing legal and contractual arrangements practiced in the Kurdistan Region, the government is entitled to the lion's share of any oil and gas produced by the contractors after their respective cost recoveries. It is the KRG's policy that the domestic market receives priority in any gas supply deals. However, we are certain that there will be substantial surplus volumes of gas available to satisfy the needs of the Nabucco pipeline project from the currently discovered gas fields and from many other license areas currently under exploration and appraisal.
The KRG shall be a willing partner to facilitate the supply of all the Kurdistan Region's surplus gas to the Nabucco pipeline owners, on arm's length commercial terms to be agreed with the KRG. The revenue generated by the KRG from such gas supply arrangements shall be shared by all the Iraqi people, as stated in the Iraq Constitution as well as in the Kurdistan Region Oil and Gas Law.
The gas supply arrangement from the Kurdistan Region would increase the economic links and cooperation between the private sector of the Kurdistan Region and Turkey. It would also undoubtedly contribute to regional stability and establish Turkey's potential as a strategic energy partner to Europe.
Over the last few years, the KRG has put in place a transparent legal framework and adopted market-driven oil and gas and exploitation policies to attract major investments to the region. Therefore we have been able to prepare, in record time, for the start of oil exports from the Kurdistan Region. Now with this move by MOL and OMV, we are certain that gas exports will follow soon.
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