Iraq Gives Ultimatum to Gazprom Neft

Nov. 11 2012 — 00:00

Iraq has warned Gazprom Neft to quit oil deals with the country's autonomous Kurdistan region or pull out of its contract for the Badra oil field, a spokesman for an Iraqi minister said Friday.

In August, Gazprom Neft, the oil arm of gas monopoly Gazprom, acquired interests in two blocks with the Kurdistan Regional Government, following moves by rivals like ExxonMobil and Total that angered the Iraqi central government in Baghdad.

"Iraq sent a letter to Gazprom at the end of October asking the company for an official reply [and stating] that it should cancel deals signed with the KRG or pull out completely from Badra oil field," said Faisal Abdullah, the spokesman for Deputy Prime Minister for Energy Hussain Shahristani.

Last year, Gazprom said it expected to start production at Badra with 15,000 barrels per day in August 2013. The field, near the border with Iran, has 100 million barrels of reserves and is operated jointly by Turkey's TPAO, Korea's Kogas and Malaysia's Petronas.

Gazprom Neft chief operating officer Alexander Dyukov declined to comment.

ExxonMobil was the first major to sign oil deals with Kurdistan, and the company is now at the center of a dispute over oil and territory.

The dispute is between the Arab-led central government and ethnic Kurds, who have run their own administration in northern Iraq since 1991.

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