Iraq approves oil exploration deal with Kuwait Energy

Iraq approves oil exploration deal with Kuwait Energy Wed, Jan 09 10:05 AM EST By Ahmed Rasheed BAGHDAD, Jan 9 (Reuters) - Iraq has approved an oil exploration deal with a Kuwait Energy-led group, a senior oil official said on Wednesday, to take the place of Turkey's state-owned TPAO, which the cabinet decided to expel. Facing souring diplomatic ties with Turkey, Iraq asked Kuwait Energy last year to acquire TPAO's shares in exploration block 9. At the time, the Kuwaiti company held a 30 percent stake. "Kuwait Energy has acquired the stake of the Turkish company TPAO, and now it's holding 70 percent of the contract, and Dragon Oil PLC will hold 30 percent," Abdul-Mahdy al-Ameedi, director of the ministry's contracts directorate, said in an interview. Iraq's oil ministry plans to sign the final deal on Jan. 27, Ameedi said. Baghdad has been angered by Ankara's moves to forge closer ties with the Kurdistan Regional Government in northern Iraq, which is in a dispute with the federal government over oil and land rights. Turkey and Iraq have also accused each other of inciting sectarian tensions and have summoned each others' ambassadors in tit-for-tat manoeuvres. The contract provides the consortium rights to explore and develop oil block 9, which is located in Iraq's southern Basra province. OPEC member Iraq is expected to be the world's biggest source of new oil supplies over the next few years. It plans to open up more rounds for oil and gas blocks for auction. A handful of international companies won bids last May at Iraq's fourth energy auction, which had a poor showing because of tough contract terms drawn up by Baghdad. Iraq has offered foreign companies less attractive service agreements, in which they receive a fee rather than the Kurdistan's production-sharing deals, which allow them to profit jointly from the output. ========================= UPDATE 1-Iraq says has right to sue over unsanctioned oil exports Share this Email Print Related NewsIraq says reserves right to sue over oil exports 5:22am EST UPDATE 2-Defiant Kurds to truck more crude to Turkey-Genel Wed, Jan 9 2013 Iraqi Sunnis, Kurds boycott cabinet to back protests Tue, Jan 8 2013 UPDATE 2-Iraqi Kurdistan starts independent crude oil exports Tue, Jan 8 2013 UPDATE 4-Rosneft leads Russian oil output to new high Wed, Jan 2 2013Analysis & OpinionConcerns about current account deficit Islamists push own agenda in Iraq’s Sunni protests against Shi’ite power Related TopicsStocks » Markets » Energy » Industrials » Thu Jan 10, 2013 7:03am EST BAGHDAD Jan 10 (Reuters) - Iraq has the right to take legal action against oil companies exporting crude without dealing with the central government, including confiscating cargoes and suing sellers, buyers and transporters, the state-run SOMO oil company said on Thursday. A SOMO statement made no reference to any company, but it was released after Genel Energy said Iraq's autonomous Kurdistan region had given permission for the company to deliver some crude directly by truck to Turkey. Baghdad says only the central government has authority to export crude and sign oil deals. But Kurdistan says the constitution allows it to agree to contracts. It has signed with oil majors such as Exxon Mobil, angering Iraq officials who deem the Kurdish agreements unconstitutional. "The Iraqi Ministry of Oil and SOMO, shall reserve the right to take all legal actions against any company or entity that deal with bodies other than SOMO in addition to the confiscation of cargoes smuggled across borders as well as suing sellers, purchasers and transporters," it said. Crude reserves are at the heart of a wider dispute over territory, oilfields and political autonomy between Baghdad and the Kurdistan enclave in the country's north, where ethnic Kurds run their own regional government. Genel Energy said on Wednesday trucked exports from the Anglo-Turkish company's Taq Taq oilfield in Kurdistan could reach 20,000 barrels per day in a few weeks after starting with relatively small amounts. The move to truck oil directly to Turkey came after Kurdistan exports were halted through the Baghdad-controlled Iraq-Turkey pipeline because of a dispute over central government payments to oil companies working in Kurdistan. Baghdad has made one payment to companies, but Iraqi officials said last month they would not pay oil firms a second portion because Kurdistan had failed to reach agreed production under a deal made in September. The Kurdistan Regional Government is now negotiating for a pipeline to connect Kurdistan oilfields directly with Turkey, which would be a major step for the autonomous region to break its reliance on Baghdad's pipeline for export of its crude. =============