An oil project is completed in the Kurdistan Region. File photo: Rudaw
ERBIL, Kurdistan Region — Russian energy conglomerate Rosneft is "excited" to continue developing $400 million worth of projects in the Kurdistan Region, citing high-quality reserves, and valuable terms which benefit their shareholders. Separately, a Canadian and a Norwegian firm announced receiving payments from the KRG.
“In terms of Iraqi Kurdistan, we are obviously moving forward on the projects and we are actually quite excited about that opportunity,” Pavel Fyodorov, the company’s first vice-president, told the Financial Times. “It is a manifold opportunity that has infrastructure and production components to it.”
The executive's stance mirrors that his country's president, Vladimir Putin's, who told Rudaw on December 14 that "we believe this benefits" the economies of Russia, Kurdistan, and Iraq, while referring specifically to Rosneft.
Fyodorov added that projects totaling $400 million were proceeding as announced.
“Kurdistan has, in our view, a fairly exciting economic proposition in place. It has very high-quality geological reserve and there are fairly low costs associated with the production,” said Fyodorov in the article published on Wednesday. “The terms that have been offered to us are remarkably value-accretive to Rosneft shareholders.”
Control over oil resources – a vital revenue source for both Baghdad and Erbil – is a long-disputed issue between the two governments. It led to violence when Iraq's armed forces including the Iran-backed Hashd al-Shaabi paramilitaries took control of oil-rich Kirkuk from Kurdish Peshmerga in October.
However, Russian Oil Minister Alexander Novak has stated that the "Iraqi government has no complaints about our projects in the Kurdistan territory."
Iraq’s Oil Ministry has countered that the topic was not discussed by Novak in his early-December meeting with Iraqi PM Haider al-Abadi and Baghdad believes "all contracts" must be signed with the federal government.
“Overall, we are doing the business of searching for the best possible bargains for Rosneft shareholders. Opportunities are opportunities,” said Mr Fyodorov.
Just before the September referendum, the KRG formally inked a deal with Rosneft to begin work on production at five oil blocks as early 2018.
KRG continues promise to pay foreign oil companies
Two international energy companies confirmed on Tuesday that they had received payments from the KRG for oil deliveries.
Norway oil and gas operator DNO stated that it had received a $54.32 million from the KRG as payment for September crude deliveries from the Tawke field license. Separately, DNO confirmed a $4.37 million payment for October revenues.
"Twelve monthly export invoices were paid in full during 2017 together with three scheduled payments under the receivables agreement, providing the funds and the confidence to continue to make significant new investments in Kurdistan," said Bijan Mossavar-Rahmani, DNO's Executive Chairman.
Canadian-traded ShaMaran Petroleum Corporation reported that it received $10.7 million for oil deliveries from September. ShaMaran invoiced the KRG for $11.3 million.
"The Atrush co-venturers have been advised by the KRG that the shortfall is related to an accounting error and that payment of the USD 0.6 million will be issued in the new year," read the ShaMaran statement.
KRG Minister of Transportation Maulood Bawa Murad said after a meeting in parliament between the Council of Ministers and MPs on December 13 that the government will continue to pay the international energy firms despite the loss of revenues due to the economic crisis facing the Kurdistan Region.