US firm reports progress in deal to develop Iraq’s northern oil field

Erbil, Kurdistan Region - The US-based HKN Energy announced late Thursday it has reached a final agreement with Iraq on the technical terms for developing the Hamrin oil field in Kirkuk province, describing it as “a major milestone" in advancing the Hamrin project.

"It provides a comprehensive framework for developing the field and increasing oil production to maximize efficiency and local benefit. Once a contract is signed," said the energy firm in a statement.

In July, HKN Energy signed an initial agreement with Iraq's state-run North Oil Company (NOC) for the development of the oil field.

The initial agreement, signed under supervision of Iraqi Oil Minister Hayyan Abdul Ghani, aimed to raise Hamrin’s output to 60,000 barrels per day (bpd), up from its current 20,000 to 25,000 bpd. It also includes plans to invest 45 to 50 million cubic meters of associated gas to fuel power stations, the oil ministry said following the July agreement.

For its part, the Iraqi Ministry of Oil said that a meeting between Amer Khalil Ahmed, head of the North Oil Company, and HKN was held on Thursday “to fully develop the technical vision,” noting that the final plan for the development of the Hamrin oil field has been agreed upon.

“This achievement marks an important step toward a contract between HKN and the Government of Iraq,” Srood Mukhtar, Vice President of HKN Energy, was cited as saying in the HKN Energy statement.

“We look forward to quickly concluding contract negotiations to deliver a project that strengthens Iraq’s energy capacity and directly benefits its people,” he said.

According to the company, the agreement will enable the rapid deployment of US expertise, equipment, and investment to scale up production. HKN Energy, headquartered in Texas, is the largest privately held foreign energy investor currently operating in Iraq.

HKN also operates in the Kurdistan Region under production sharing contracts for the Sarsang and Atrush blocks in Duhok province. The company holds a 62 percent interest in the Sarsang block and serves as operator. It also operates the Atrush block with a 25 percent stake.

In May, Kurdistan Region Prime Minister Masrour Barzani, during his visit to Washington, oversaw the signing of two major energy agreements with the US-based WesternZagros and HKN Energy, valued at a combined $110 billion over their lifespan. Baghdad rejected the deals as illegal, with the Iraqi oil ministry insisting that all energy partnerships must go through the federal government. The Kurdistan Regional Government (KRG) has insisted that the deals are legal.