Turkish firm signs gas deal in Iraq
Iraq, eager to supply natural gas to its overburdened power plants, has signed agreements with Korea Gas, Kuwait Energy and the Turkish Petroleum Corporation, or TPAO, to develop two gas fields.
The three companies secured rights to develop the Mansouriya field in Iraq’s eastern Diyala province, while TPAO and Kuwait Energy won a license for the Siba field in southern Basra province, Oil Minister Abdul Kareem al-Luaibi said. The government awarded rights to both deposits in October, together with a license for a third field called Akkas.
“Iraq needs to develop these fields in order to provide the needs of its electricity stations,” Luaibi said Sunday during the signing ceremony in Baghdad and in the presence of the Turkish Energy Minister Taner Yıldız. “Iraq also aims to become a major source for gas in the future,” Bloomberg quoted the Iraqi minister as saying.
Speaking at the ceremony, TPAO Chairman Mehmet Uysal said they had undersigned a historic deal. The company is eyeing further contracts in the country, the Anatolia news agency quoted him as saying.
Iraq has the fifth-biggest gas reserves in the Middle East, according to data from BP. While the government relies on sales of crude oil for most of its revenue, it wants to produce gas to fuel the nation’s power stations, which have been unable for several years to meet demand. Production of electricity and gas, like oil, suffered from decades of war and sanctions, and Iraq is seeking foreign investment and expertise to boost output.
20-year licenses
Mansouriya, discovered in 1979, holds an estimated 127 billion cubic meters of gas, Luaibi said. The three companies hold a 20-year license for the field and are obligated to start producing 320 million cubic feet within six years, he said.
Siba, discovered in 1968, has 34 billion cubic meter of gas. TPAO and Korea Gas, known as Kogas, have development rights there for 20 years and are committed to begin producing 100 million cubic feet within six years, Luaibi said.
Iraq signed a separate agreement with Kogas on June 1 to produce gas at Akkas, ending seven months of delays for the project. The Korean company took over after its original partner, KazMunaiGas Exploration Production of Kazakhstan, unexpectedly withdrew. Akkas, in western Anbar province in 1998, held 5.6 trillion cubic feet of gas and has six wells.
The government is also negotiating an agreement with Royal Dutch Shell and Mitsubishi on a $12 billion plan to develop and capture gas, which is being flared off and wasted in southern Iraq. A final agreement is due to be reached this week, Deputy Oil Minister Ahmed al-Shamma said June 1.
Baghdad needs the energy revenues from the increased production to rebuild a war-battered economy and fill chronic electricity shortfalls, Agence France-Presse said yesterday in a related story.
Iraq’s current gas production, all of it associated gas from oil wells, is 1.5 million cubic meters a day, but half is burned off in flares from oil wells, according to Baghdad-based analyst Ruba Husari.
June 5, 2011
ISTANBUL – Daily News with wires
