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21:th March
15:00
Mazher Xaleqi
xaleqi.com
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South Kurdistan Starts Exporting Oil
Kurdistannetwork - June 1, 2009
Hewler – South Kurdistan - Iraq's largely autonomous Kurdish region on Monday officially started oil exports from two fields it had developed with foreign oil firms through contracts the Baghdad government describes as illegal.
* The fields developed were Tawke and Taq Taq, which both lie in Kurdistan. Norway's DNO International (DNO.OL: Quote, Profile, Research) developed the Tawke field, and Toronto-listed Addax Petroleum (AXC.TO: Quote, Profile, Research) developed Taq Taq. Turkey's Genel Enerji is a partner in both.
* Pumping from Taq Taq started at 40,000 barrels per day (bpd) and from Tawke at 60,000 bpd, although Tawke's operator says the field's maximum output is currently 50,000 bpd.
* Genel Enerji expects Taq Taq's output to rise to 70,000 bpd within three months, and for peak production to hit 180,000 bpd within 18 months. DNO says its wells at Tawke have a capacity of about 100,000 bpd, but that the firm must add more production facilities at the site to utilise this.
* Engineers at the Taq Taq field said the oil produced there was light, high grade, or 47 degrees API gravity. Tawke engineers said the oil there had an medium grade API of 25-27.
* Oil from Taq Taq is first loaded into trucks and is transported to where it can be fed into the main Kirkuk pipeline to the Turkish port of Ceyhan. Oil from Tawke is piped all the way to the main export pipeline.
* The KRG says its total regional production target is to reach 450,000 bpd by 2011 and 1 million bpd by the end of 2012.
* The deals the KRG signed with DNO, Addax and Genel are production sharing contracts, in which they get a percentage of revenues from oil produced at the fields they develop. Baghdad, which rejects production sharing agreements in favour of fixed-fee service contracts, says these are illegal.
* The KRG said the firms' gross profits will be 10-12 percent of revenues, or 5 percent net after deductions for drilling and exploration costs.
* It is unclear whether Baghdad or the KRG will pay the developers. The KRG receives 17 percent of Iraq's total state oil revenues, and the KRG's natural resources minister says the region will not pay the developers from its share. However, he said the KRG guaranteed the firms would be paid.
* The Baghdad government is believed to have allowed exports from Taq Taq and Tawke despite rejecting the deals the KRG made with the fields' developers because of budget shortfalls.
* It is unclear whether Baghdad's acceptance of the Taq Taq and Tawke deals will set a precedent for other deals the KRG has made. The Taq Taq and Tawke deals may be an exception given they were signed before Iraq adopted its post-Saddam constitution.
* The KRG has 30 deals with foreign oil firms. (Reporting by Mohammed Abbas; Editing by William Hardy)
Source: Reuters
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