KRG SIGNING OIL DEALS LEFT AND RIGHT

Not all the details of the Kurd oil deals have been fully reported. The important story is just that deals are getting made. This is in keeping with the Kurdistan Regional Government (KRG) push for a federal system giving the regions greater autonomy, a push in direct conflict with the Shia-dominated Maliki government in Baghdad which is pushing for stronger central control.

This is another example of the Maliki government's impotence. Would Maliki and the Shia strike at the Kurds? How do the Marines settle that?

And then, of course, there is the question of how much autonomy Turkey is willing to allow the KRG. Less, certainly, since the very political moves in the House of Representatives last week. Would Turkey move on the Kurds? How do the Marines settle THAT?

Autonomous Kurdish Government Signs New Oil Contracts
October 3, 2007 (Xinhua Financial News via RigZone)
and
Heritage acquires block in Iraq, plans drilling
October 9, 2007 (Oil & Gas Journal)
and
Iraqi Kurdish leader defends oil deals
October 7, 2007 (Forbes)

WHO
Kurdish Regional Government (KRG) (Nechirvan Barzani, Premier); Heritage Oil Corp unit Heritage Energy Middle East Ltd, Perenco Group unit Perenco SA, 2 as-yet unnamed foreign oil companies

Iraqi oil regions (click to enlarge)

WHAT
The KRG has approved 4 new oil contracts and plans for 2 new refineries. There is one report of 4 other new oil contracts. The Iraq central government has described the deals as “illegal” and the US State Department has called them “not very helpful.”

WHEN
- Heritage will begin geologic work immediately with the intention of exploration drilling in 2008.
- The refinery to be developed in partnership with Heritage is expected to be operational in 2 years.

WHERE
- Heritage: the Minran block in the Souleimaniyeh province of southwestern Kurdistan.
- Perenco: the Sindi/Amedi block, a site near the Iraqi Turkish border.

WHY
- Total investment for the 4 oil contracts: $500 million. Investment for the 2 refineries: $300 million.
- Miran has been explored and is said to possibly have a 1 billion barrel potential.
The Heritage-KRG refinery is a 50-50 joint venture.

Kurdistan (click to enlarge)

QUOTES
Barzani: “This is not an attempt to usurp the nation's oil resources, but rather our best effort to move the process forward…The KRG production sharing contracts are fully consistent with the Iraqi constitution, which gives the regions of Iraq substantial control over natural resources…”