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Kuwait gets rewarded by Iraqi oil deals

03 Feb 2013
Abdul Kareem Luaibi, the Iraqi Oil Minister addresses a news conference during the fourth licensing round for exploration blocks at the headquarters of Oil Ministry in Baghdad. Iraq has gone through an agreement of a final service with a group of two gulf companies, one of which is Kuwait, for developing the ninth of 12 exploration blocks included in the fourth round of licenses. The signing has completely rules out a Turkish company that was part of the initial contract in this investment. While this deal shows the improved economic relations between Kuwait and Iraq following years of animosity, it also reflects the depth of the dispute between Ankara and Baghdad. Iraq gave the Kuwait Oil Company and Emirati Dragon Oil the final rights to explore and develop an area estimated at about 900 square kilometers in the oil-rich southern city of Basra with a profit of $ 6.24 per barrels of oil equivalent. The move has excluded a Turkish company that was part of the initial award of this agreement. An initial agreement was signed by the Iraqi Oil Ministry last July with a group of companies consisting of the Kuwait Energy Company, Emirati Dragon and the Turkish TPAO for exploring the ninth area, but the Turkish company was ruled out under mysterious circumstances. The Oil Ministry of Iraq has rejected to make any comment on the reasons behind the exclusion of the Turkish company from the contract, saying only that the decision was issued by the government, and that the ministry did not have anything to do with it. It sounds that the stressed between Baghdad and Ankara over the past year had affected Turkish investments in Iraq. Turkey said that Nouri al-Maliki, the Prime Minister of Iraq is targeting Sunni Arabs in Iraq through the pursuit of their political leaders. For his part, Baghdad said that this is interference in the internal affairs of a sovereign country. The official in charge of contracts in the Oil Ministry, Abdul Mahdi al-Amidi, said that his ministry did not have anything to do with the exclusion of the Turkish company. He stressed that the government did not agree on the TPAO Turkish company, which won rights to the ninth exploratory area with a Kuwait consortium. He also added that the Turkish company abandoned its share in favor of the Kuwaiti company. Iraq did organize the fourth bidding round to explore oil and gas fields at the end of May 2012, with the participation of 47 global companies. The round had 12 blocks, which consisted of 5 gas blocks and7 oil blocks in the provinces of Basra, Babel, Nineveh, Najaf, Diyala, Diwaniya, Muthanna, Anbar and Dhi Qar. Three blocks were given to the competing companies, during this round. The deal to explore Gas Block 8 was won by Pakistan Petroleum. The Gas Block is situated between Wasit and Diyala, whereas the second-biggest oil producing company of Russia, Lukoil and Japan’s Inpex Corporation won the deal to explore Oil Block 10, situated between Dhi Qar and Muthanna provinces The Kuwait Energy-led group – which included Emirati and Turkish companies, has the block located in the provinces of Basra on the Iraq-Iran border. The Chairman of Kuwait Energy, Mansour Abu Khamsin said that the deal signed with Iraq would open lots of new opportunities for the economic cooperation between both of the countries. He expressed his country’s keenness about it, saying that the Kuwaiti companies are looking forward to increasing their activities in Iraq, by improving their relationship with the Iraqi Oil Ministry. He also added that the way the Oil Ministry deal the whole thing with their company, was simply way too excellent, and added that the Iraqi-Kuwaiti companies must set the cooperation between Kuwait Energy and the Oil Ministry as an example. Iraq-Kuwait ties have witnessed a significant development for last few months, which came as a result of a resolution of the most prominent controversial matter between the two countries, compensation for Kuwait for the damage that was imposed by Iraq, after Saddam Hussein, the former President of Iraq, invaded Kuwait in the year 1990. In fact, a few days ago, Kuwait got $ 500 million as settlement of this matter. Source: [Al monitor]
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