RIL secures two Kurdish blocks

Rovi, Sarta have oil-bearing structure of almost 80%

NEW DELHI: In a first for an Indian company after the Gulf War in Iraq, Reliance Industries Ltd (RIL) has bagged two oil blocks in Iraq’s troubled Kurdish region.

Late on Tuesday, the Kurdish Regional Government (KRG) announced seven new production-sharing contracts (PSCs), of which RIL got Rovi and Sarta in northern Iraq.
The blocks measuring 450-500 sq km have an oil-bearing structure of almost 80%, and Reliance is confident of making a discovery soon. RIL paid a signing amount of $15.5-17.5 million for the two blocks.

An AFP report from Iraq said the oil deals may anger Baghdad, which opposes the unilateral sell-off of crude blocks in the absence of a national oil law, though the Kurdish government said in a statement that the RIL contracts had been negotiated prior to the enforcement of the Kurdistan Oil and Gas Law.

“Pursuant to the Iraq Constitution, the KRG Oil and Gas Law of August 2007 is the supreme law governing oil and gas activities in the Region.

All revenues from petroleum activities in the Kurdistan Region will be shared proportionately throughout Iraq pursuant to the Constitution,” the statement said.

Prime Minister Nri al-Maliki’s government had urged the KRG not to sign any deals until the new national oil law is passed, AFP said.

The KRG minister for natural resources Ashti Hawrami said that, with the signing of these contracts, 20 international oil companies are now working in the region.

If commercial discoveries are made, these seven PSCs will provide an estimated aggregate return/profit of over 85% to Iraq and around 15% to the contractors.