Iraq bars Hess from auction over Kurdish deals

Iraq bars Hess from auction over Kurdish deals

Central government considers Kurdish contracts illegal; 4th bid round scheduled for late January

September 6, 2011 4:09 by Reuters

Iraq’s Oil Ministry has excluded US oil firm Hess Corp from competing in its 4th energy auction because the company signed deals with Iraq’s northern Kurdish region, a senior Iraqi oil official said on Monday.

Hess had been among 41 companies pre-qualified by Iraq but was not included on a new list of 40 qualified firms issued on Monday.
“We decided to remove Hess from the pre-qualified companies after it signed two deals in the Kurdish region,” Abdul-Mahdy al-Ameedi, director of the oil ministry’s contracts and licensing directorate, told Reuters.

“The Oil Ministry is committed to not dealing with any oil company that signs oil contracts with the Kurdish regional government without the approval of the central government and the Iraqi Oil Ministry,” he said.

Hess said on July 27 that it had signed production sharing contracts with the KRG, in partnership with Petroceltic International Plc, for the Dinarta and Shakrok exploration blocks.
Iraq’s Shi’ite-led central government is embroiled in a potentially explosive dispute with ethnic Kurds over land, power and the country’s vast oil wealth. The Oil Ministry deems production sharing agreements signed by the Kurds in their northern enclave to be illegal.

Frustrated by delays over a new hydrocarbons law, the Kurdistan Regional Government has pushed ahead with plans to attract foreign firms to develop its oil and gas despite opposition from Baghdad.

Iraq’s 4th bidding round for 12 new exploration blocs, scheduled for late January, is expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil to Iraqi reserves. The auction will focus mainly on gas exploration.

Iraq auctioned three major natural gas fields to foreign firms last October.

Iraq will meet with executives from 40 oil and gas companies at a roadshow on Sept. 11 in Amman, Jordan and present a data package with initial tender protocols to the companies on Sept. 12. (By Ahmed Rasheed)