KNOC Signs Pact with KRG on 8 Iraq Oil E&P Projects

SEOUL (Dow Jones Newswires), September 25, 2008

State-run Korea National Oil Corp. said Thursday it signed a final contract with the Kurdish Regional Government on exploration and production sharing for eight oil blocks in northern Iraq.

Under the contract, KNOC will acquire an 80% stake in Qush Tappa, a 60% stake in Sangaw South, a 20% stake in Bazian, 20% in Sangaw North and 15% stake each in K15, K16, K17 and K21 blocks in Hawler, KNOC said in a statement.

KNOC will eventually form a consortium comprised of South Korean companies to pursue exploration and production at the Iraq oil blocks, a KNOC spokesman said.

The Korean firm signed a memorandum of understanding on the oil development and infrastructure deal in June.

The eight blocks -- five located near Irbil and three others near Sulaymaniyah -- have estimated oil reserves of 7.2 billion barrels, of which Korean firms will have the rights to 1.9 billion barrels, KNOC said at that time.

KNOC will also lead an infrastructure construction project in Iraq worth $2.1 billion, it said.

Local construction companies will finance the infrastructure projects through domestic financial institutions and the Kurdish government will pay the money back with profits from the blocks, KNOC said previously. 

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