UPDATE 3-Iraq's Kurdistan says awards 5 more oil deals
(Adds TNK-BP comment, Iraqi oil minister)
By Paul Tait
BAGHDAD, Nov 12 (Reuters) - The Kurdistan regional government (KRG) in northern Iraq has awarded five new petroleum production sharing contracts to foreign firms, it announced on Monday, further angering Iraq's central government.
The regional government in Iraq's semi-autonomous Kurdistan said the deals were with affiliates and subsidiaries of TNK-BP (BP.L) (TNBPI.RTS), Korea National Oil Corp (KNOC), Hillwood, Sterling Energy (SEY.L) and Aspect Energy, although Russian- based TNK-BP denied any involvement.
"These five (contracts) are yet another clear expression of confidence in the strength and stability of the Kurdistan Region," Ashti Hawrami, the KRG minister for natural resources, said in a statement. "And they (will) produce very comprehensive returns for the people of Iraq."
The KRG has pushed ahead with long-term plans to attract foreign firms to develop its oil and gas despite opposition from Baghdad, which says the new contracts are illegal, and the threat of a Turkish offensive against Kurdish rebels in the region.
Iraqi Oil Minister Hussain al-Shahristani reiterated Baghdad's demand that Kurdistan not sign any new contracts and wait until passage of a draft national oil law, stalled by disputes but now being renegotiated in cabinet.
"They must cancel these contracts and wait until the oil law is established," Shahristani told Reuters.
The KRG statement said TNK-BP affiliate Norbest Ltd had been given a contract for four blocks in the Hawler contract area in Iraq's northwestern Arbil province, but a spokeswoman for Russia's TNK-BP denied any link with Norbest.
"Norbest Ltd is not affiliated with TNK-BP in any way," spokeswoman Marina Dracheva told Reuters in Moscow.
OTHER CONTRACTS
A South Korean consortium led by state-run KNOC was awarded a contract in the Bazian oilfield in the Dahuk region of northern Iraq.
The South Korean Maeil Business Newspaper reported on Monday that exploration in the oilfield would begin in January 2008 and continue until 2010. The Bazian block is estimated to hold 500 million tonnes of energy reserves.
The newspaper said KNOC held a 38 percent stake in the consortium with several private energy development firms, including SK Energy (096770.KS). A memorandum of understanding was signed between KNOC and KRG in January.
Hillwood affiliate HKN Energy Ltd was awarded a contract in the Sarsan area of Kurdistan, while a Sterling Energy subsidiary was given a contract for the Sangaw North Block.
Aspect Energy subsidiary General Exploration Partners Inc. was awarded one in the Atrush Block.
All the deals give 15 percent of profits on any commercial discoveries to the operators, with the rest going to Iraq, the KRG statement said.
Another seven oil and gas contracts were announced last week. Hawrami said then that five more deals were pending and that international companies had shown strong interest in another 24 oil and gas exploration blocks still available.
Kurdish officials have clashed with Baghdad over Kurdistan's oil deals and the content of the national oil law, which will determine how contracts are awarded and how revenues are distributed from the world's third-largest proven oil reserves.
The national oil law, one of a number of key political benchmarks identified by Washington as critical for national reconciliation, was to have been passed by the middle of this year but remains stalled due to political infighting.
Frustrated by the delays, Kurdistan passed its own oil law in August. Baghdad rejects that law and has also questioned the validity of older deals.
(Additional reporting Wisam Mohammed in Baghdad and Amie Ferris-Rotman in Moscow; editing by James Jukwey)
