UAE, Chinese firms granted oil exploration permits in Iraq

Iraq's oil ministry said Thursday it has granted licences to explore oil blocs in zones bordering Iran for the first time in half a century.

MENA

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27 April, 2018

Iraq issued licences to two Chinese companies and one Emirati firm [Getty]

Iraq has granted licences to explore oil blocs in zones bordering Iran for the first time in half a century, reports said on Thursday.

Iraq’s oil ministry said it has issued licences to two Chinese companies and one Emirati firm for three blocs close to Iran and one near Kuwait.

The ministry also granted licences to exploit gas from four fields in Diyala province, northeast of Baghdad.

Under late dictator Saddam Hussein, Iraq went to war with Iran between 1980 and 1988 and invaded Kuwait in 1990, before being pushed out of the latter by a US-led coalition.

But since a iUS-led invasion of Iraq n 2003, the country has been blighted by long periods of chaos, culminating in a three-year battle against Islamic State group insurgents.

"After the decades of war and negligence, we have decided to accelerate investment in fields in border areas. These investments will contribute to oil and gas reserves and improve our economy," said Oil Minister Jabbar al-Luaibi.

"It isn't logical to leave these regions without investment or development - that's why we invited these companies to come and invest," added Luaibi.

Emirati company Crescent Petroleum won the licence to exploit the Khider Mai field, bordering Kuwait, while Chinese firm Geo-Jade Petroleum won two blocs close to Iran.

Crescent Petroleum will take a 13.75 percent share of profits on any oil it exploits following the exploration phase, while Geo-Jade will receive 14.67 percent from the Naft Khana Field in Diyala and 13.75 percent on its Huwaiza concession in Missan province, in the event they move to extraction.

The fourth of the oil contracts was won by another Chinese firm, United Energy Group, which will receive 4.55 percent of profits for exploiting the Sinbad bloc in Basra province, close to the Iranian border.

The profit-sharing deals for the contracts differ from concessions granted in 2010, which paid companies a set fee per barrel.

Crescent also bagged the licenses to exploit the four gas fields, namely Gilabat, Qumar, Khashim al Ahmar and Injana.

Iraq began its journey to rebuild after it announced victory against the Islamic State militant group last December, following large-scale military operations to reclaim territory seized by the militants in 2014.

Earlier this month, Iraqi Prime Minister Haider al-Abadi sought international support in Japan to restore peace and prosperity in his country.

Abadi co-hosted a meeting in Tokyo with Japanese Prime Minister Shinzo Abe to discuss ways to improve public safety in Iraq while promoting the country's sustainable economic development.

Abe announced a 35 billion yen ($330 million) loan for irrigation projects in Iraq during talks with Abadi and pledged Japan's continuing support. The loan is part of Japan's $6 billion pledge to stabilise the Middle East, the source of 80 percent of its oil imports.

Agencies contributed to this report.