March 31, 2020 / 3:36 PM / 4 months ago

Russia's Gazprom Neft rebuffs proposal from Iraqi Kurdistan to cut investments

MOSCOW (Reuters) - Gazprom Neft, the oil arm of Russian gas giant Gazprom, will not reduce investment in its project in Iraqi Kurdistan despite a request from the semi-autonomous region’s government to do so, it said on Tuesday.

Following a slump in oil prices several countries have asked oil producers to cut investments, which governments often have to partially reimburse as part of their contractual arrangements.

Gazprom Neft said the Iraqi Kurdistan government had asked oil producing companies, including Gazprom Neft Middle East, to reduce investments.

However, Gazprom Neft told Reuters it had declined to cut spending on the development of its Sarqala oil project in the region.

“All the investments had been initially agreed with the corresponding ministries, and they are already below the required level,” Gazprom Neft said.

Gazprom Neft holds a 40% stake in the Garmian block, in which the Sarquala field is located, and 80% in the Halabja and Shakal blocks.

Last week sources told Reuters that Iraq had asked all international oil companies to cut the budgets of developing oilfields by 30% as the fall in oil prices has hit government revenues.

Gazprom Neft said it had not received such proposals for its Badra project in eastern Iraq.

Reporting by Vladimir Soldatkin; Editing by Jan Harvey

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