Baghdad slams oil deal between Russia’s Rosneft and Kurds

An Iraqi oil employee checks pipelines at Bai Hassan oilfield, west of Kirkuk. (AFP)
Updated 19 October 2017
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Baghdad slams oil deal between Russia’s Rosneft and Kurds

BAGHDAD: The Iraqi Oil Ministry reacted angrily on Thursday after Russian energy giant Rosneft signed a production sharing deal with the authorities in the autonomous Kurdish region without its approval.
The agreement came hot on the heels of Baghdad’s recapture from Kurdish forces of five oil fields in disputed territory outside the autonomous region in retaliation for an independence vote last month.
“This department and the Iraqi federal government are the only two bodies with whom agreements should be reached for the development and investments in the energy sector,” the ministry said in a statement, without mentioning Rosneft by name.
Oil Minister Jabbar Al-Luaybi condemned the “irresponsible announcements coming from certain officials in Iraq or abroad, or from foreign companies about their intention to conclude deals with parties in Iraq without the federal government being aware.”
“The federal government and the Oil Ministry are the only bodies responsible for developing oil and gas strategy and authorized to sign agreements with foreign countries and companies,” he said.
Rosneft announced on Wednesday it had signed production-sharing agreements for five oil blocks in Iraqi Kurdistan.
The state-controlled giant said it would pay up to $400 million (340 million euros) for 80 percent in the venture as part of the deal with the Kurdistan Regional Government (KRG), although up to half the sum could be paid in crude from the blocks.
Rosneft boss Igor Sechin on Thursday insisted that the company strictly followed the law and said that “if there are problems between the government of Iraq and Kurdistan then they need to solve the problems themselves.”
“I am not a politician, my job is to produce oil,” Sechin, a top ally of President Vladimir Putin, was quoted as saying by Russian news agencies.
A joint exploration program and pilot production is to start next year. If successful, Rosneft said it would start full-field development of the blocks in 2021.
Recoverable oil reserves at the five blocks are around 670 million barrels, Rosneft said, calling the estimate “conservative.”
Rosneft and Iraqi Kurdistan are already cooperating on crude purchases and sales, but the new deal “will allow us to talk about full-fledged entry of the company in one of the most promising regions” of the developing global energy market, Rosneft said.
Meanwhile, Falah Mustafa Bakir, head of the KRG department of foreign relations, told broadcaster CNN in an interview that the KRG never intended to engage in a war with the Iraqi Army.
‭ There is a need for dialogue between KRG and Iraq so as to reach a common understanding, Bakir said, according to a transcript of the interview published on KRG’s website, adding the dispute was not about oil or the national flag but about the future of two nations.
The KRG said it welcomed Iraqi Prime Minister Haider Al-Abadi’s call for talks to resolve the crisis, Irbil-based Rudaw TV said.
Al-Abadi called for dialogue on Tuesday, saying he considered last month’s referendum “a thing of the past.”


Cyprus, Egypt sign accord for Mediterranean gas pipeline

Updated 19 September 2018
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Cyprus, Egypt sign accord for Mediterranean gas pipeline

NICOSIA: Cyprus and Egypt on Wednesday signed an agreement paving the way for the Mediterranean’s first subsea pipeline to carry Cypriot natural gas to the Arab country for re-export to Europe.
“Today’s signing is an important milestone, not only for Cyprus but also the entire eastern Mediterranean region,” said Energy Minister George Lakkotrypis after he signed alongside visiting Egyptian Oil Minister Tarek el-Molla.
He said the agreement, “the first of its kind in our shared region,” was crucial for channelling gas from the island’s “Aphrodite” offshore field to Egypt and to attract multi-billion-dollar infrastructure investments.
A joint committee would be set up in 30 days to oversee the project.
Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain 4.5 trillion cubic feet (130 billion cubic feet) of gas but it has yet to be extracted.
The Aphrodite consortium, which also includes Israel’s Delek and Royal Dutch Shell, seeks to renegotiate terms before it taps the gas.
It is currently in talks with the Cypriot government over a bigger share of profits to make the project viable.
The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters could hold the same riches.
Wednesday’s agreement is backed by the European Union in its search to diversify energy sources.
“We are essentially talking about a European pipeline, intended to transport Cypriot natural gas to Egypt for re-export to Europe in the form of liquified natural gas (LNG),” said Lakkotrypis.
The pace of construction of the pipeline to deliver gas to Egypt would depend on commercial agreements with investors.
Cyprus aims for natural gas to start flowing to Egypt’s LNG facilities in 2022, thus generating its first revenue from natural gas.
The island has also issued exploration licenses to ENI of Italy, the US firm ExxonMobil and France’s Total.