Iraqi Kurdish Government Signs Oil Contract With Australian Company - Paper
Posted on: Friday, 16 May 2008, 09:00 CDT
Text of report entitled "According to latest oil contracts, KRG gives 80 per cent profit from oil production to oil companies", published by Iraqi privately-owned daily newspaper Rozhnama on 14 May
An oil field has been found in the Shakal village in the Administrative District of Kalar [south of Sulaymaniyah] which is predicted to contain 250m barrels of oil. The Kurdistan Regional Government [KRG] has signed a contract with an Australian company [for its production] which gives the KRG only 20 per cent of the profit.
According to the contract signed by the Australian Oil Search Limited with the KRG, the profit resulting from the production will be divided as follows: Prime Company 36 per cent, Petoil Company 9 per cent, Oil Search Company 15 per cent.
The third party which has not been named in the contract is thought to be companies connected to the Patriotic Union of Kurdistan [PUK] or the Kurdistan Democratic Party [KDP] and it will get 20 per cent while the remaining 20 per cent will go to the KRG.
Kurdistan [Region] parliament member Barzan Hawrami told Hawlati: "The minister of natural resources, Ashti Hawrami, told Kurdistan parliament the day before yesterday that 89 per cent of the profit from all signed contracts would return to KRG."
Barzan Hawrami explained that there is a certain type of contracts called PSA [acronym in English in the original; it presumably stands for production sharing agreement] where the government will not spend any of its own money. [In such contracts] a larger share of the profit, about 60-70 per cent, will go to the [producer] company until such company recovers all its debts. He added: "We have asked for the formation of a committee to monitor the money invested by the companies. Without this they may spend one million dollars, for example, and claim that they have invested two millions."
Earlier, KRG spokesperson Jamal Abdallah had made a statement to Hawlati that "the KRG contracts are based on the model of shared production where a ratio of 30-36 per cent will go to the company until the stage of search and exploration is completed. The rest will go to the central government and the share of the KRG will be paid out of this."
According to a statement by Oil Search Limited published on 12 May 2008, the company has signed a contract with the KRG for the production of oil in a very important area in Iraq and Kurdistan which is [the village] of Shakal near the Administrative District of Kalar, which comprises an area of 632 square kilometres and is expected to produce 250,000 barrels of oil. According to a geological survey of an area of 200 square kilometres two oil fields have been found that are going to be inspected and assessed by the end of this year.
According to the company's statement, it seems that this company has previously signed another contract with the KRG for the exploration and production of oil in the area of Bnabawe near the town of Taqtaq [north-west of Sulaymaniyah].
The Shakal oil field has a seven-year period for exploration and 20 years for production with the possibility of further extensions.
So far, the KRG has signed 19 other contracts for the exploration and production of oil in Kurdistan.
Originally published by Rozhnama, Sulaymaniyah, in Sorani Kurdish 14 May 08.
(c) 2008 BBC Monitoring Middle East. Provided by ProQuest Information and Learning. All rights Reserved.
Source: BBC Monitoring Middle East
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