Iraqi Kurdistan gives Turkish company six oil exploration blocks

ISTANBUL, June 18 Tue Jun 18, 2013 4:48pm EDT

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ISTANBUL, June 18 (Reuters) - Local authorities have given an unnamed Turkish company licenses to explore for oil in Iraqi Kurdistan, according to a report, a move that could anger the central government in Baghdad already worried about the region's growing independence.

The report, co-published by The Oil & Gas Year and the autonomous Kurdistan Regional Government (KRG), is the first official confirmation of the deal. It said a company described only as "a Turkish entity" was given stakes in the Choman, Hindren, Arbat, Pulkhana, Jabal Kand and Khalakan blocks.

Resource-hungry Turkey and neighbouring Iraqi Kurdistan, rich in hydrocarbons, have been negotiating on energy since last year. However, the central government insists it has the sole authority to sign energy deals.

A Turkish Energy Ministry official declined to comment on the report published by Istanbul-based The Oil & Gas Year. A source at state company Turkiye Petrolleri (TPAO), Turkey's main oil exploration company, denied his company won the licences.

The Turkish entity will have 80 percent stakes in the Choman, Hindren and Arbat blocks, the report said.

Choman and Hindren are contiguous sections on the border with Iran, and Arbat is in the southeast near the city of Sulaymaniyah and has had some seismic work completed.

The entity will hold a 40 percent stake in Pulkhana in the south, where eight wells have been drilled, and Jabal Kand in the west. It is expected to be given a 40 percent stake in the Khalakan block in the east of Iraqi Kurdistan, the report said.

The ease of extraction and favourable production-sharing terms have attracted majors such Exxon Mobil Corp, Chevron Corp and Total SA to the Kurdistan region, despite threats of blacklisting from Baghdad, which considers the KRG contracts illegal.

The central government's refusal to pay for exports from the north has sharply reduced shipments, which are currently made overland by truck to Turkey.

Resolution of the dispute between the regional capital Arbil and Baghdad is essential if the Kurdish region is to reach its export goal of more than 1 million barrels of oil per day in by 2015.

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