* Iraq to void Total's Halfaya contract in southern Iraq
* Gazprom also takes stake in Kurdistan
* Baghdad, Kurds locked in dispute over oil deals
By Ahmed Rasheed
BAGHDAD, Aug 1 Iraq's Kurdistan pledged on
Wednesday to restart oil exports in a bid to ease tensions with
the central government, as firms from France and Russia ignored
threats from Baghdad and joined U.S. peers to invest in the
semi-autonomous northern region.
Iraq's oil dispute with its Kurdistan region escalated after
Baghdad threatened to cancel a contract of France's Total
for signing Kurdish deals and a unit of Russia's
Gazprom also entered the autonomous area.
Total and Gazprom followed U.S. majors Exxon and
Chevron in signing oil accords with Kurdistan, which is
already deeply at odds with Baghdad in a long-running dispute
over control of territories and oil rights along their internal
Oil is at the heart of a broader conflict over political
autonomy in Iraq as ethnic Kurdish officials in Kurdistan, with
its own government and armed forces since 1991, chaff against
Iraq-Arab-led central government's authority in Baghdad.
OPEC member Iraq says only the central government can agree
to petroleum deals, and has already punished foreign companies
for signing up to explore for oil in the northern Kurdistan
In an apparent move to appease Baghdad, the Kurdistan
Regional Government said on Wednesday it would resume oil
exports from its region after it halted shipments in April due
to disagreements over central government payments.
After Total announced on Tuesday it had agreed to buy a
stake in two blocks in the region, Baghdad responded with a
warning again it considered any deals with Kurdistan illegal and
told the French company it would be punished.
"We are working to cancel Total's stake in the Halfaya
contract. We will disqualify and terminate the contract of any
company signing a deal with the Kurdistan region without the
approval of the oil ministry," Abdul-Mahdy al-Ameedi, director
of the ministry's contracts directorate, told reporters.
Total declined to comment on the Iraqi statement.
In June, Total and its partners PetroChina and Petronas
started production at Halfaya oilfield. Total has an 18.75
percent stake in the operation under a contract signed with the
central Iraq government in 2010.
Total's Chief Executive Christophe de Margerie signalled in
February the company was thinking about Kurdistan investments
because terms were better than those offered in a new bidding
round by Baghdad for the rest of Iraq.
Gazprom Neft, the oil arm of Russian gas export
monopoly Gazprom, said on Wednesday it had also acquired
interests in two blocks in Iraq's Kurdistan even after its
international rivals angered the central Iraqi government.
Gazprom Neft will take 40 percent of the Garmian block, and
80 percent of the Shakal block. The regional government of the
autonomous region will keep 20 percent in both. Gazprom Neft
estimated the blocks contained potential resources of about 3.6
billion barrels of oil equivalent.
It already has a project in Iraq, near Iran's border, where
it expects to produce about 15,000 barrels per day from 2013.
Kurdistan will restart oil exports in the first week of
August at 100,000 barrels per day (bpd), the region's Ministry
of Natural Resources said.
"The decision was a confidence-building measure aimed at
solving once and for all the ongoing oil and gas issues in
Iraq," a statement on the KRG's website said.
TWO REGIONS, TWO POLICIES
Pulling back from years of war, Iraq's central government
had ambitious plans for doubling its oil output over the next
three years. Earlier this year its production rose above 3
million barrels per day for the first time in more than three
Baghdad signed multi-billion dollar deals with foreign oil
operators to develop its southern oilfields with the aim of
becoming a major oil export player with output targets at around
8 million bpd by 2017.
But two years after those deals were signed, some report
only modest gains and companies have been frustrated by
infrastructure bottlenecks, payment disputes and logistical
That has made Iraqi Kurdistan an attractive alternative for
oil explorers. Exxon was the first international oil major to
enter into the Kurdistan region, which offers more
investor-friendly production-sharing contracts to companies.
Norway's Statoil is also looking closely at
exploration deals with the Kurdistan authorities, industry
sources have said.
"Production sharing contracts offered by Kurds represent a
prize for most foreign oil firms, while Baghdad's tough-terms
deals are more grin and bear," Ali Shallal, a legal expert
specialised in drafting oil contracts said.
Iraq on Wednesday also signed an initial exploration deal
with Russia's Bashneft and Britain's Premier Oil PLC to
develop the country's oil block 12 as a part of its push to
further develop its energy sector.
Iraq is also preparing to invite international oil companies
to develop the giant Nassiriya field and construct a refinery in
a bidding round and a date will be set soon, Ameedi said.
The largely undeveloped Nassiriya field is listed as having
reserves of under 5 billion barrels.