Iraq has approved an oil exploration deal with a Kuwait-led group, replacing a previous agreement with Turkey’s state-run oil researcher TPAO that was torpedoed amid worsening ties with Ankara, a government-issued statement said yesterday.
The Iraqi cabinet agreed to replace TPAO with Kuwait Energy for a 900-square-kilometer exploration block in south Iraq, near the country’s border with Iran.
“The cabinet decided… to approve the adoption of the recommendations of the energy committee regarding… signing the exploration block number nine’s contract with a coalition of Kuwaiti and Emirati companies,” a statement said.
Kuwait Energy will bump up its stake in the project to 70 percent, with Dragon Oil of the United Arab Emirates holding the remaining stakes.
The original consortium of TPAO, Kuwait Energy and Dragon Oil had won the exploration contract for the block in a public auction that took place from May 30 to 31 in which they agreed to be paid a service fee of $6.24 per barrel of oil equivalent eventually extracted.
It is one of several agreements between Baghdad and foreign energy firms to boost oil output and explore for new deposits of energy as Iraq looks to cement its role as a key global oil supplier.
Officials said TPAO would be expelled in November due to “non-technical issues.”
The two countries have been at odds over the Syrian conflict and Iraq has publicly urged Turkey to hand over fugitive Iraqi Vice President Tareq al-Hashemi, who has been sentenced to death in Baghdad on charges of running a death squad.
Turkey’s direct energy trade with the autonomous Kurdistan Regional Government (KRG) in the country’s north is also irking the central Baghdad government.