SEOUL, June 25 (Reuters) - A South Korean consortium will participate in oil projects with Iraq’s Kurdish regional government to secure an estimated 1.9 billion barrels of oil, group leader Korea National Oil Corp (KNOC) said on Wednesday.
The consortium signed a memorandum of understanding on Saturday with the regional government to participate in eight oil reserve projects estimated to house 7.2 billion barrels of oil.
The group, which includes builders such as Hyundai Engineering & Construction (000720.KS), Kolon Construction (003070.KS) and Doosan Construction (011160.KS), also agreed to participate in the construction of infrastructure worth $2.1 billion.
Iraq needs billions of dollars to modernise its oil industry and raise output after decades of sanctions and war, while South Korea, the world’s 10th largest energy consumer, wants to secure stable energy supplies as it imports 96 percent of its reserves from overseas.
But disputes over the federal oil law between the largely autonomous northern region of Kurdistan and Baghdad have stalled international investment in Iraq.
Baghdad controls Iraq’s export pipelines, and until the Kurdish region reaches an agreement with the federal government it will remain unable to produce more oil. (Reporting by Miyoung Kim; editing by Jonathan Hopfner)