Rosneft and the Iraq’s Kurdistan Regional Government signed exploration and production agreements which will give the Russia firm access to five Iraqi blocks with hydrocarbon potential.
Iraq’s KRG government, represented by Dr. Ashti Hawrami, Minister of Natural Resources agreed with Rosneft’s CEO Igor Sechin at the XXI St. Petersburg International Economic Forum on the monetisation of the export oil pipeline in Iraqi Kurdistan, as well as entered into a number of production sharing agreements, according to a Rosneft statement.
The agreement outlines the main terms of the project which provides for the establishment of a joint venture for implementation of the long-term contract related to infrastructure systems in Iraqi Kurdistan.
Rosneft will get access to the major regional transportation system with the throughput capacity of 700 thousand bbl per day, which is planned to be expanded up to 1 mln bbl per day by the end of 2017, the statement said.
The parties also committed to enter into effect of the PSAs signed for five blocks with substantial geological potential and outlines other prospective areas of cooperation in exploration and production, including the gas sphere.
The signed documents strengthen cooperation between Rosneft and Iraqi Kurdistan, which started in February 2017 from signing a contract on purchase and sale of crude in 2017-2019.
The new agreements will allow discussions on the full entry of Rosneft in one of the most promising regions of the developing global energy market with the expected recoverable reserves of approximately 45 billion bbl of oil and 5.66 trillion m3 of gas (according to the estimate of the Ministry of Natural Resources of Kurdistan Region).
The agreements provide for further phased investments of Rosneft in Kurdistan Region.
"The company is widening its cooperation with Iraqi Kurdistan across the whole production chain,” said Sechin. “The crude is being delivered to the German refineries of Rosneft, which is indicative of our successful business diversification strategy. The agreements are signed under the conditions profitable for the company and set an example of well-weighed investments in one of the key Middle East regions, which will make it possible for the company to expand its exploration and production geography, provide feedstock for Rosneft's growing refining network and to raise profitability of our international assets.”