KRG Says To Continue EPSAs.

The KRG on Feb. 5 said it will continue to sign EPSAs with foreign oil companies despite the threats from Baghdad to cut crude oil exports to such firm and bar them from the TSA offerings. This poses a serious challenge to the central government at a time when the Kurdish coalition is losing much of its influence on the decision-making system in Baghdad.

The KRG's Minister of Natural Resources, Ashti Hawrami, said his government "has not stopped" negotiating with foreign oil companies. There are a number of small and medium-sized foreign companies now negotiating EPSAs in Erbil, Kurdistan's current capital. Hawrami said Kurdistan planned to produce 1m b/d within five years, to be shipped through a "new crude oil export pipeline" he was discussing with companies. He was talking to reporters on the sidelines of an energy conference in London.

Currently, Iraqi crude oil from Kirkuk is exported from Kurdistan via a 1.6m b/d pipeline passing through Turkey. Some 300,000 b/d is pumped from Kirkuk to the Turkish Mediterranean terminal of Ceyhan.

Hawrami said the KRG believed there were about "20 billion barrels of oil to be found" in its area", adding: "Realistically, we do need another pipeline. We're already talking with companies to actually build that". He said a contract should be announced in a few months and that the pipeline was to be built within two years. The new pipeline would have capacity of 1m b/d, Hawrami said, but he did not mention the companies to be involved in the proposed route.