Iraq lets Korea's SK join auction after Kurd oilfield sale

DUBAI Feb 9 (Reuters) - Iraq has allowed SK Innovation to bid in its fourth energy exploration block auction after the private South Korean company sold its stake in a Kurdish oilfield to Korea's already barred state oil company KNOC, Baghdad said on Thursday.

Companies that have signed deals with the Kurdistan Regional Government (KRG), which is locked in a feud with the central government, have been blocked by Baghdad from taking part in an auction now planned for late May.

"The qualification of this company was delayed... due to its share in a Bazian production sharing contract with the Kurdistan Regional Government without the consent of the Federal Government," the Petroleum Contracts and Licensing Directorate of Iraq's oil ministry said in a statement on Thursday.

Baghdad said SK Innovation could participate in the next auction of Iraqi oil and gas assets after transferring its share in the Bazian block in Kurdistan to Korea National Oil Corporation (KNOC).

KNOC was barred after securing exploration rights from the Kurdish region for the oilfield in northern Iraq in 2007. U.S oil firm Hess Corp was excluded from bidding last September for the same reason.

Baghdad signed contracts with oil majors to develop its oilfields after two bidding rounds in 2009. An auction for gas fields was held in 2010.

Future auctions were expected to focus on the nation's largely untapped gas resources but the next round has been repeatedly delayed and is currently expected to take place May 30-31.

Iraq sits on the world's fourth-largest oil reserves. Its gas reserves of an estimated 112 trillion cubic feet are the world's 10th largest, according to U.S. Department of Energy data.

SK has 29 exploration blocks and four liquefied natural gas projects spread across 16 countries. Korea is almost entirely dependent on imported oil and gas to meet its fuel needs. (Reporting by Daniel Fineren; editing by Jason Neely)