ISTANBUL — Rosneft, the Russian government majority-owned oil company, is expanding its footprint in the Kurdistan Region with the signing of a new cooperation deal this week.
The cooperation agreement which was signed by Russian President Vladimir Putin and Prime Minister of the Kurdistan Region of Iraq Nechirvan Barzani as well as Rosneft’s Chief Executive Officer Mr Igor Sechin and Kurdistan Regional Government (KRG) Minister of Natural Resources Ashti Hawrami on the sidelines of the St. Petersburg International Economic Forum, which took place earlier this week, is for the exploration of five blocks. The blocks are said to have “substantial geological potential.”
The agreement also oversees 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 million bbl per day by the end of 2017,” stated the Rosneft press release.
According to the Russian oil giant, the Kurdistan Region is “one of the most promising regions of the developing global energy market,” with the expected recoverable reserves in the order of 45 billion bbl of oil and 5.66 trillion m3 of gas, as per Kurdistan Region’s Ministry of Natural Resources estimates.
“The KRG welcomes these agreements which build on the mutually beneficial relationship established with Rosneft earlier this year, and we look forward to increased cooperation,” remarked Hawrami.
A purchase deal for 2017-2019 between the two sides was signed earlier this year in February.
During the past three years, the Kurdistan Region began to export crude oil independently of Baghdad. Previously, any such sales had to be authorized by the central government of Iraq. However, as the KRG was not getting its share of Iraq’s budget revenue it commenced to sell oil independently.