Iraqi Oil Ministry Signs Natural Gas Contract with South Korea's KOGAS

After nearly a year of protracted negotiations, the Iraqi Oil Ministry has concluded a contract with South Korea’s KOGAS company for the Akkas natural gas field in Anbar province.

On 20 October 2010, Iraq’s Oil Ministry auctioned off three natural gas fields, the Mansuriyah field in Diyala, Siba in Basra, and Akkas in Anbar in the country’s first successful natural gas field auction. South Korea’s KOGAS and Kazakhstan’s KazMunai Gas put in the winning bid for Akkas, with the partnership offering $5.50 per barrel equivalent in gas production after the field reached 400 million cubic feet of production.

The Akkas natural gas field has an estimated 5.6 trillion cubic feet of reserves. This was the first successful offering for natural gas in Iraq.

The process has not been smooth. On the day of the gas auction, politicians in Anbar held a demonstration, voicing a multitude of complaints, including that the Akkas natural gas field be under provincial control, that companies developing the site hire local workers, that any natural gas produced there would first be used for neighboring power plants and that government authorities in Baghdad had ignored the province’s earlier attempts to develop its natural gas, The Kurdistan News Agency reported.

By. Charles Kennedy, Deputy Editor OilPrice.com