Rosneft said it has agreed with the Kurdistan Regional Government to invest up to US$400 million in five production blocks despite clashes between Iraqi government and Kurdi troops which has seen Iraq recapture Kirkuk oilfields.
The Russian oil company said it has signed an agreement that will “put into force” production sharing agreements on five production blocks in KRG. Rosneft’s share in the PSA will be 80 per cent and payments for projects farm-in and geological information for each block will be between $40-110 million.
Rosneft said it would pay as much as $400 million for an 80 per cent share in the PSA. It would pay between $40-110 million for project farm-in and geological information for each block but about $200 could be repaid in oil produced from the blocks, it said.
A conservative estimate places total reserves at the five blocks at about 670 million barrels, Rosneft said.
Iraq’s oil ministry on Tuesday said it plans to double oil production from Kirkuk fields that it recaptured from Kurdistan this week after the semi-autonomous region overwhelmingly voted for independence from Baghdad in a referendum last month.
Rosneft said the agreement it signed is similar to those signed by other international oil and gas companies with KRG.
The parties agreed to implement the geological exploration program and to start pilot production as early as in 2018. In case of success, in 2021 it is planned to start full-field development of the blocks, it said.