Reliance Industries bags two oil blocks in northern Iraq

Reliance Industries bags two oil blocks in northern Iraq

New Delhi: Mukesh Ambani-run Reliance Industries has bagged two oil blocks in the Kurdish region of Iraq that may hold one billion barrels of oil reserves.

Reliance Industries has signed a contract for the blocks Rovi and Sarta in northern Iraq with the autonomous Kurdish Regional Government (KRG), company sources said.

The blocks measuring 450-500 sq km have almost 80% oil bearing structure and Reliance is confident of making a discovery soon.

Reliance Industries paid a signing amount of $15.5-17.5 million for the two blocks.

When asked if the KRG had awarded the two blocks to RIL along with five others to foreign companies defying Baghdad’s proposed new oil law, the source said: “As per our understanding, KRG has made the awards in accordance with the proposed law."

Meanwhile, an AFP report said the oil deals may anger Baghdad, which opposes the unilateral sell-off of crude blocks in the absence of a national oil law.

Prime Minister Nri al-Maliki’s government had urged the KRG not to sign any deals until the new national oil law is passed in parliament, AFP said.

The KRG’s minister for natural resources Ashti Hawrami said that with the signing of these contracts, 20 international oil companies are now working in the region.

“A further 24 blocks in the region are the subject of intense interest from international companies. There will be more announcements soon," he was quoted by AFP as saying.

Iraq’s Oil Minister Hussein Shahristani had previously said that all oil contracts signed before the passing of the oil law would be considered “illegal".

The hydrocarbons law is stalled before Parliament due to bitter differences between warring political factions over the sharing of lucrative revenues from Iraq’s crude, the third-largest proven reserves in the world.

AFP said the latest contracts bring to 15 the number of deals finalised by the regional government since it passed its own oil law in August.

Hawrami said the contracts will help the KRG achieve its goal of producing a million barrels of oil a day.

“This new level of exploration and production activity in the Kurdistan Region will also galvanise investment interest for the rest of Iraq once a transparent, investor- friendly and unambiguously constitutional oil and gas law for Iraq is in place," he was quoted by the newswire as saying.

KRG said in a statement that two production sharing contracts have been signed with Austria’s OMV Petroleum Exploration Gmbh for Mala Omar and Shorish blocks.

Separately, the Akre-Bijeel block has been awarded to Kalegran Ltd, a wholly-owned subsidiary of MOL Hungarian Oil and Gas Plc and Gulf Keystone Petroleum Ltd, a subsidiary of Britain’s Gulf Keystone.

The Shaikan block, also in Dohuk, has been taken up by Gulf Keystone, Texas Keystone and Kalegran.

Another block in Dohuk province has been awarded to a Western company, the statement said without giving any further details.

It added that four strategic blocks in Sulaimaniyah and Arbil provinces have been awarded to Kurdistan Exploration and Production Company, a government-owned firm.