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How will Baghdad React as Gazprom Neft Sign New Oil Contracts with KRG?

By Joao Peixe | Tue, 19 February 2013 22:31 | 0

Baghdad has long now claimed that only it has the authority to issue oil and gas contracts to energy companies that wish to work in Iraq, even going so far as to revoke existing licenses and refuse to do business with any who go against this.

Yet still the autonomous region of Kurdistan receives oil majors wishing to treat with just them when in pursuit of licenses to explore and drill in northern Iraq. Industry insiders say that this is because the Kurdistan Regional Government (KRG) offers more favourable production sharing agreements than the central government in Baghdad.

This has been highlighted by the recent announcement by Masoud Barzani, the president of the KRG, who told the news agency Interfax that Gazprom Neft, the oil division of the world largest energy company Gazprom, has just signed new oil production agreements.

Related article: Could Iraq Blow its Oil Opportunity?

This announcement is bound to aggravate Baghdad and put tension on the relationship between the two governments which had been experiencing a period of calm just recently.

Barzani stated that they “are satisfied with Gazprom Neft's work in the region. New agreements have been reached with this Russian company in recent days.”

Last August Gazprom Neft acquired its first two blocks in Kurdistan.

By. Joao Peixe of Oilprice.com

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