Kuwait Energy led group sign Iraq oil deal
Source: BI-ME with Bloomberg , Author: Posted by BI-ME staff
Posted: Mon July 16, 2012 3:30 pm

IRAQ. Kuwait Energy Co., Dubai-based Dragon Oil Plc (DGO) and Turkiye Petrolleri AO signed an agreement in Baghdad to explore for crude in southern Iraq along the Iranian border.

The companies won rights to explore Block 9 in a May auction, bidding a fee of US$6.24 a barrel. Kuwait Energy will be the project’s operator, holding 40%. Turkiye Petrolleri and Dragon Oil will each have 30%.

The service contract is one of three that the Iraqi Oil Ministry awarded at the auction. Pakistan Petroleum Ltd. (PPL) signed an agreement yesterday to begin searching for natural gas in Block 8 in eastern Iraq. Russia’s OAO Lukoil and Inpex Corp. (1605) of Japan are due to sign an agreement tomorrow for crude exploration rights in Block 10 in southern Iraq, for a fee of $5.99 a barrel. Lukoil will hold 60 percent, and Inpex the rest.

The contracts contribute to an energy-industry resurgence that has lifted Iraq into second place among the 12 members of the Organization of Petroleum Exporting Countries, nine years after the U.S.-led invasion that toppled Saddam Hussein, the former president. The auction on May 30 and 31 was for exploration of new sites, a first in three decades for Iraq, Abdul Mahdy Al-Ameedi, director general of the Oil Ministry’s licensing department, said yesterday.

In its three previous auctions since 2003, Iraq auctioned rights to produce at fields that were already discovered or in operation. Iraq holds the world’s fifth-largest crude reserves, according to data from BP Plc (BP/) that include Canadian oil sands, and the fifth-biggest gas deposits in the Middle East.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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