BAGHDAD (AFP) – Iraq’s autonomous Kurdish region said it has signed two oil contracts with Canada’s Talisman Energy despite Baghdad’s stiff opposition to such deals before a national oil law is drawn up.
The contracts were signed on Thursday by representatives of Talisman and the prime minister of the Kurdish regional government in northern Iraq, Nechirvan Barzani, his administration said late Monday in a statement.
It said a subsidiary of Talisman would acquire a 40-percent stake in the Kalar-Bawanoor block, where Calgary-based WesternZagros has a 40-percent stake. The remaining 20 percent is to go to the regional government.
WesternZagros, through its wholly-owned subsidiaries, already holds a production-sharing contract with the Kurdistan regional government.
A second Talisman subsidiary is to carry out an exploration programme under a two-year service agreement in a separate block.
“The service agreement grants Talisman an option to take up a long-term production-sharing contract after two years, in which they will hold a 60-percent participation interest,” the statement said.
The remaining 40 percent will belong to the regional government.
It said Talisman had committed to offer 220 million dollars as part of its corporate social responsibility to rehabilitate communities in areas of oil exploration.
Talisman’s blocks are close to the town of Halabja, where thousands were killed in a 1988 poison gas attack during assaults by fallen dictator Saddam Hussein’s regime against the Iraqi Kurds.
Halabja and nearby communities are in urgent need of infrastructure support, including schools and hospitals, power and drinking water, as well as investment in human capital, the government said.
The Kurdish government has signed several oil deals with international companies over the past two years although a controversial national oil law governing investment in the sector has yet to be passed.
Iraq’s central government has strongly opposed the signing of contracts by the Kurds and has even threatened to cancel them, but the Kurdish government has brushed aside Baghdad’s warnings.
An oil ministry official in Baghdad said on Sunday that Iraq is to award contracts to 41 foreign oil firms in a bid to boost production.