Total SA (TOT) has bought the majority stake in an oil exploration block in Kurdistan, in a move that will further consolidate its position in the semiautonomous region of northern Iraq and once again challenge the Iraqi federal authorities.
Total SA (TOT) has bought the majority stake in an oil exploration block
in
Kurdistan
, in a move that will further consolidate its
position in the semiautonomous region of northern
Iraq
and
once again challenge the Iraqi federal authorities.
Total will acquire 80% of the Baranan block, while the remaining 20% will be
owned by the Kurdistan Regional Government, or KRG.
"This participation in an operated exploration block was contemplated at
the time Total made its move in
Kurdistan
during the summer 2012," Total said in a statement emailed to The Wall
Street Journal." It was indeed the initial intent from that time that
Total should contribute its technical expertise and operational knowhow through
an active operator role," it said.
In June last year the French oil company announced the acquisition of a 35%
interest in Harir and Safen oil expoloration blocks in Kurdistan, an area that
oil majors such as Total, Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) view
as providing lucrative production-sharing deals and better operating conditions
than in the south.
That move angered the central government in
Baghdad
,
which argues it alone has the right to sign and control hydrocarbon deals with
international oil companies.
Baghdad
has repeatedly warned Total,
which has stakes in Halfaya oil field in southern
Iraq
, that
they have to choose between their deals in
Kurdistan
and
central and southern
Iraq
. So
far
Baghdad
has
only barred these companies from future contracts in central and southern
Iraq
.
Chevron on Monday said it had completed a deal to acquire a new oil exploration
block in
Iraq
's
Kurdistan
region. Unlike Total and Exxon Mobil, Chevron doesn't have stakes in central
and southern
Iraq
.
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