26 Sep 2017 17:25

Gazprom Neft projects in Kurdistan should be implemented, Energy Min considering risks from referendum - Novak

GORKI. Sept 25 (Interfax) - The Russian Energy Ministry is considering the risks to the work of Russian oil and gas companies in Kurdistan presented by its referendum on independence from Iraq, but believes that Gazprom Neft's projects in the region should be implemented, minister Alexander Novak said.

"You know that Gazprom Neft is operating in Kurdistan and this is already a long-standing relationship which has been agreed upon by all the relevant parties. So we think that the project should continue to be implemented," he said.

"We are looking into the issue [on the risks presented by the independence referendum] separately, and if you want, we will make a comment," the minister said.

Gazprom Neft is involved in three projects in Iraqi Kurdistan: 80% stakes in the Halabja and Shakal sections (the remainder is held by the Kurdistan regional government) and a 40% stake in the Sarqala field (Garmian block).

The first oil at the Garmian block was produced in 2011 and commercial shipments of crude from the field began in 2015. Gazprom Neft Middle East became the project operator in early 2016. The operatorship was previously held by Canada's WesternZagros Resources Ltd.

In a memorandum, Gazprom Neft parent company Gazprom said that commercial production at the Shakal block in Iraqi Kurdistan would begin in 2018. Production is expected to peak at 2 million tonnes of oil in 2022.

At the little-explored Halabja block, geological study will continue until 2018. Geological exploration might also be extended, until 2020.

The Badra field is located in the Wasit province in the east of Iraq. According to preliminary estimates, the geological reserves of Badra amount to 3 billion barrels of oil. The development project is calculated for the 20-year period with the possibility of extending it by five years. The project is being implemented by a consortium of companies: Gazprom Neft (operator) - 30%, Kogas - 22.5%, Petronas - 15%, TPAO - 7.5%. The stake of the Iraqi government, which is represented by Iraq's Oil Exploration Company (OEC) is 25%.