KNOC seals Kurdish deal
04 November 2008
State oil company Korea National Oil Company (KNOC) has concluded a $2.1 billion deal with the Kurdish Regional Government (KRG) on exploration and production sharing for eight oil blocks in northern Iraq.
The memorandum, signed earlier in June, was intended to link oil development with social infrastructure construction in the Kurdish region.
Under the bilateral agreement, KNOC will acquire an 80% stake in Qush Tappa, a 60% stake in Sangaw South, a 20% stake in Bazian, 20% in Sangaw North and 15% stake each in K15, K16, K17 and K21 blocks in Hawler.
In return, the company will provide $2.1 billion worth of infrastructure to be built in Kurdistan. South Korean construction companies had to finance the infrastructure projects through domestic financial institutions, the company said.
KNOC said it would guarantee $600 million to kick off the project, and would offer another $1.5 billion once crude exports were proven possible from the region.
The eight blocks, five located near Irbil and three others near Sulaymaniyah, sits on about 7.2 billion barrels of oil reserves, in which South Korean companies will have the rights to 1.9 billion barrels.
Exploration and development has lagged in the semi-autonomous Kurdish state since it has been subjected to political dispute between the KRG and the central Iraqi government on the control of the region’s hydrocarbon resources.
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