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Friday, May 18, 2007

Norwegian firm to start pumping oil in Kurdish area of Iraq

Foreign firms are re-starting to produce oil in Iraq, after 35 years of break Print

Thursday , 17 May 2007

This could cause a real crisis and conflict with the Iraqi government. The agreement is not sanctioned by the Iraqi government but is going ahead anyway. The new oil law is not even passed yet!



Foreigners to start pumping oil in North Iraq

Foreign firms are re-starting to produce oil in Iraq, after 35 years of break. Norwegian firm DNO signed an agreement with the Kurdish Local Administration despite all the oppositions of the central government in Baghdad . DNO said that they will start to supply Iraqi oil to the market as of next month.

Economics newspaper Financial Times announced that a foreign firm will start to produce oil in Iraq, after 35 years of state control. Underlining that the Norwegian DNO will start with small amounts of oil production, the newspaper said that this represents “the symbolic return of the foreign firms to Iraq after 35 years of state control”.

The newspaper emphasized that the relations between the Kurdish authorities and the central government in North Iraq may become tense due to the announcement that DNO will start producing oil in Iraq, and underlined that the DNO did not make the agreement with the Baghdad government but with the Kurdish administration.

Pointing out that the decision of the Kurdish Administration to sign the oil agreements led to the fear of the division of the country, the newspaper expressed that the Norwegian firm will most probably have to carry the oil produced overland, and reminded the readers of the fact that the Baghdad did nor grant permission for the use of the oil-exporting pipeline.

Meanwhile, DNO CEO Helge Eide gave a speech to the newspaper and said: “We are ready for pumping the oil. We could never imagine that we will proceed to the stage of production in Kurdistan just two years after we initiated the prospecting operations.”

Financial Times moreover underlined the fact that DNO, who signed an agreement with the Kurdish Local Administration in 2004, found the Tawke oil zone around the end of 2005. The newspaper added the initial production in Tawke is expected to be around 15,000 barrels per day.

Proceeding that the oil reserve in Iraq was estimated to be around 115 billion barrels level and that this is the 3rd biggest oil reserve of the world, the newspaper said that the oil reserve in the region that is controlled by the Kurdish Local Government might be around 45 billion barrels and the daily production would possibly reach 500,000 barrels, in the upcoming five years.

The New Anatolian
17 May 2007

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