Post says Talisman, others look to expand in Kurdistan
2009-06-12 09:28 ET - In the News
See In the News (C-TLM) Talisman Energy Inc
The Financial Post reports in its Friday edition that North American energy companies are falling behind their European and Asian cousins in staking claims to undeveloped, massive oil and gas fields in Iraq's Kurdistan region.
The Post's Carrie Tait writes Kurdistan just 12 days ago pumped out crude from its first new oil fields in decades. Qubad Jalal Talabani, who represents Iraq's Kurdistan regional government in the United States, notes that while the U.S. is cool to the idea of more Middle East oil, Canadian companies are dipping their toes into Kurdish territory.
Talisman Energy and WesternZagros Resources are among the handful of domestic companies looking to grab a piece of Kurdistan's potential. Turkey and Lebanon invest more in Kurdistan than any other country. Europe, Mr. Talabani said, is more aggressive than its Western counterparts, and South Korea is also pushing into the northern corner of Iraq.
"We can survive and flourish [without further North American investment], but obviously we want our friends to be partners with us as we develop our region," he said. Despite the United States' pledge to end its reliance on foreign oil, Mr. Talabani does not expect exports to dry up.
2009-06-12 09:28 ET - In the News
See In the News (C-TLM) Talisman Energy Inc
The Iraq Contracts And Political Affect On Oil:
"The contracts have been put out to tender but a highly controversial hydrocarbon law — intended to govern how oil proceeds are split among the population – remains locked in parliament, more than four years after it was first proposed.
Al-Shahristani is fighting for his political life. He has been heavily criticised in recent weeks by MPs angry about the stagnation of the industry at a time when the country desperately needs revenue.
Yet the oil companies are unfazed by the uncertainty. Iraq is sitting on 115 billion barrels of proven reserves. At a time when explorers are going to great lengths to get at new sources, Iraq’s is the “easiest” oil in the world. It costs between $2 and $4 a barrel to extract, compared with $50 or more for tar sands or deep-sea drilling.
In its annual review of world energy, BP announced last week that global reserves fell for the first time in more than a decade. Lambert Energy, a consultancy, predicts that at present rates of decline the world will need 40m barrels a day of new production capacity within a decade just to keep up with current demand.
Philip Lambert, its founder, said: “The world needs Iraq, both the north and the south, to work. There is nothing else that can fill the gap.”
So will this latest initiative succeed? Industry insiders say it has a good chance. On June 1, Jalal Talabani, the Iraqi president, hosted a gala ceremony celebrating the connection of a pipeline out of Kurdistan, in the north of the country. It was a momentous occasion. It connected two fields, Taq Taq and Tawke – the first to be developed since the 1970s – to the port of Ceyhan in Turkey.
Talabani’s presence was key. Since 2003, the Baghdad government and Erbil, the capital of the semi-autonomous Kurdistan, have been locked in a bitter row. Ashti Hawrami, the Kurdish oil minister, has signed 30 contracts with foreign companies without the blessing of the federal oil ministry. These so-called production-sharing agreements are generous. They give oil companies a 10%-20% cut of revenues.
The deals infuriated Al-Shahristani, who blacklisted any company that dealt with the Kurds. That is why no big oil company entered the region, leaving it to minnows such as Heritage Oil, Addax Petroleum and Norway’s DNO.
Talabani’s blessing at the opening was seen as a shift in the government’s stance. Uncertainties remain, though. The Kurdish contracts have yet to be ratified by parliament, while the law to determine how oil income – 95% of Iraq’s GDP – will be distributed remains mired in controversy.
The deals offered to the oil giants in the south won’t be nearly as attractive as those in Kurdistan. They are technical contracts, under which companies are paid a fee to increase production. Oil groups have found such deals in other countries such as Iran unappealing. However, the contracts do provide for additional payments if production targets are passed".
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6493356.ece
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