• Wednesday, 16 May, 2012

Total set to join rush for Iraqi Kurdistan riches

Negotiations: Total chief executive Christophe de Margerie

KAIA MEANS

By NASSIR SHIRKHANI London

 17 February 2012 01:47 GMT

Total is poised to follow Exxon­Mobill into Iraqi Kurdistan, where the French giant is in talks over several production sharing contracts.

Unlike ExxonMobil, which risks jeopardising its role in developing the West Qurna 1 oilfield, Total has little to fear in the form of punitive measures by the federal authorities in Baghdad because of its limited role in southern Iraq.

Oil executives in Iraqi Kurdistan said Total is chasing stakes in the Arbat and Pulkhana blocks, which Canada’s ShaMaran relinquished recently after a largely unsuccessful exploration and appraisal campaign.

Sources also said Total is considering farming into the Taza block operated by Australia’s Oil Search.

At the same time, Total is also looking to take over a 40% stake in the Khalakan block from NewAge.

Total confirmed it is looking “very closely” at investment opportunities in Iraqi Kurdistan because the PSC terms allow international players to book reserves. The federal government offers only service contracts.

Total chief Christophe de Margerie said his company is looking to see whether there are “interesting” blocks in Iraqi Kurdistan.

The semi-autonomous Kurdistan Regional Government (KRG) has angered the Iraqi federal government by signing a string of PSCs with international players.

Baghdad sees such contracts as illegal since they challenge its authority as the final arbiter of Iraq’s oil and gas sector.

“Kurdistan is in Iraq and it’s up to Iraqis to decide among themselves (whether agreements should be separate),” de Margerie said.

Iraq’s Deputy Prime Minister for Energy Hussein Shahristani warned Total would bear the “full consequences” if it entered into any contracts with the KRG.

“The position of the Iraqi government will be the same as with the other oil companies, that no company has a right to sign a contract without the approval of the central government of Iraq,” he said.

Iraq has yet to expel ExxonMobil from West Qurna 1, despite its official line that any company dealing with the KRG would lose its contracts in areas under the central government authority.

However, Iraqi Oil Ministry officials said ExxonMobil faces tough action.

Abdul-Mahdy al-Ameedi, director of the Contracts & Licensing Department, said the supermajor could freeze its Kurdish deals and keep working at West Qurna 1 until the dispute is resolved.

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