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Russia want More Projects with Iraq

By John Lee.

Russian Foreign Minister Sergey Lavrov has said that Moscow is very interested in increasing trade, economic and investment ties with Iraq.

Following a meeting on Wednesday with Iraqi Foreign Minister Mohamed Ali Alhakim, he said:

“In the field of investment, especially in the hydrocarbon sector, there is a very good result. Lukoil, Gazprom Neft, SoyuzNefteGaz are already working, Rosneft is interested in projects in Iraq. The total investment in this industry has already exceeded $ 10 billion.

“We want to promote projects in other areas. Today we talked about electricity, agriculture, industry, transport – all this will be considered in the context of preparations for the next meeting of the Russian-Iraqi Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation.“

He added that about 4 thousand Iraqi citizens are currently studying in universities of the Russian Federation, while dozens of diplomats from Iraq take part in special training courses at the Diplomatic Academy at the Russian Foreign Ministry.

(Source: Russian Ministry of Foreign Affairs)

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Rosneft to start work in Duhok

By John Lee.

Rosneft has reportedly sent a delegation to Duhok to discuss starting work on three oilfields next month.

According to the report from Rudaw, the state-controlled Russian company will work at three locations: Batle, Zawita, and in Sarsang and Chamanke in Amedi.

It is expected to extract 180,000 barrels of oil per day.

In October, Rosneft signed Production Sharing Agreements (PSA) with respect to five production blocks in Iraqi Kurdistan.

More here.

(Source: Rudaw)

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Rosneft, KRG sign Gas Development Agreement

As part of the XXII St. Petersburg International Economic Forum, Rosneft and the Kurdistan Regional Government of Iraq signed an agreement securing the intention of the Parties to make a detailed analysis of potential gas cooperation options.

The Parties ensure stepwise implementation of the arrangements following the Investment Agreement signed at the XXI St. Petersburg International Economic Forum.

Rosneft will focus its analysis on how to participate in the integrated gas business value chain in the region in order to extract maximum efficiency from investments and operations in such areas as exploration and production, transportation and trading with especial attention given to partnership and project (third party) financing options.

Under the Agreement the Parties will elaborate an integral plan to progress the gas business within the Kurdish Region of Iraq. One step in this plan is the conduct of a pre-FEED of Iraqi Kurdistan’s gas pipeline construction and operation.

This is a key project to the monetization of the exploration and production opportunities Rosneft has been evaluating since signing a Gas Cooperation Agreement with the Kurdistan Regional Government of Iraq at the 10th Eurasian Economic Forum in Verona on 19 October 2017.

Following the outcomes of the integral development plan in terms of the attractiveness and efficiency of the options, Rosneft will decide on how to participate in the regional gas business.

(Source: Rosneft)

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Rosneft Discovers Oil at Block 12

By John Lee.

Bashneft, a subsidiary of Russia’s Rosneft, has found oil at its Salman-1 exploratory well at Block 12 in Iraq.

In a statement, the company said that an exploration well was successfully drilled to depth 4,277 metres; oil was found, “which gives grounds for expecting the discovery of industrial reserves“.

Rosneft said it views this discovery as an important milestone in the development of exploration and production projects abroad.

China-based company Zhongman Petroleum and Natural Gas Group (ZPEC) was previously announced as the general drilling contractor.

(Source: Rosneft)

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Oil Ministry, Rosneft discuss increasing Cooperation

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has met with Deder Kasemero, the vice president and the regional manager of Rosneft, to discuss the expansion of cooperation in the Iraqi oil and gas sector.

The Minister said he is open for international companies such as Rosneft to participate in investment projects to rehabilitate oil pipelines, develop oil fields, build refineries and invest in flare gas.

(Source: Ministry of Oil)

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Rosneft in the Kurdish Region: Moscow’s Balancing Act

By Ahmed Tabaqchali. Originally published by Iraq in Context; re-published by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Between February 2017 and mid-October, Rosneft signed a number of deals with the Kurdish Regional Government (KRG) that established for it, and by extension for Russia, a major position as both an investor and stakeholder in the Kurdish Region of Iraq (KRI)’s hydrocarbon resources and infrastructure.

The move was interpreted, especially by the KRG, as implicit support for the KRG in its bid for independence, especially in light of the latest deal signed following the reassertion of Iraq’s federal control over Kirkuk and other disputed territories. While there is an element of truth to this thinking, the deals are part of a wider geopolitical positioning for Russia as a major gas supplier to Europe and as an emerging power in the Middle East.

The deals provide Rosneft, and by extension Russia, effective control of the KRG’s Oil & Gas infrastructure, and a controlling stake in the region’s finances in more ways than one.

Within the oil space it has established this in three ways. The first was by providing USD 1.5bn in financing via forward oil sales payable over 3-5 years. This would be payable in kind from the KRG’s exports, until recently at about 550,000-600,000 barrels per day (bbl/d). However, the loss of the Kirkuk fields takes away about 430,000 bbl/d of production or eventually about half of the KRG’s exports.

This leaves the KRG with a tiny revenue stream after payments to International Oil Companies (IOC)’s, from which to make payments on forward oil sales of up USD 3.5 bn including Rosneft’s USD 1.5bn. A complicating factor is the repayment of other KRG debt, estimated at over USD 21bn by end of 2017, which will have to be factored into debt payment sustainability.

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Baghdad hits back at Rosneft/KRG Deal

By John Lee.

Iraq’s Ministry of Oil has hit back at Rosneft‘s recent decision to enter a production-sharing deal with the Kurdistan Regional Government (KRG) without its approval.

In a statement, the Ministry warned:

“The ministry of oil warns seriously all the countries and oil companies from contracting or dealing with any authority inside Iraq without taking the approval from the federal government and the ministry of oil”.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] (pictured) added:

“… irresponsible statements from some of the officials inside & outside Iraq or the foreign companies about their intention to sign oil contracts with any authority inside the geographic borders of Iraq without telling the federal government or the ministry of oil, is considered as a Blatant interference in the internal affairs and a derogation from national sovereignty, and an outright violation of international norms.”

Rosneft boss Igor Sechin insisted that the company strictly followed the law. AFP quotes him as saying:

“If there are problems between the government of Iraq and Kurdistan they need to solve the problems themselves … I am not a politician, my job is to produce oil.”

In addition to the production-sharing deal, Rosneft has just agreed to start work on a new oil pipeline project in Iraqi Kurdistan.

(Sources: Iraqi Ministry of Oil, AFP)

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Rosneft to Build New Kurdistan Oil Pipeline

Russia’s Rosneft and Kurdistan Regional Government (KRG) have announced the start of joint implementation of an infrastructure project for the operation of the oil pipeline in the Kurdish Autonomous Region.

According to a statement from Rosneft, its share in the project “may amount to 60%“.

“The other project participant with 40% share will be KAR Group, who is the current pipeline operator,” it added.

Rosneft Chief Executive Officer Igor Sechin (pictured) said:

“The entry into the infrastructure project will contribute to achievement of Rosneft’s strategic objectives and will enable Rosneft to enhance the efficiency of oil transportation to the end customers including supplies to the Company’s refineries in Germany”.

(Source: Rosneft)

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Rosneft, KRG Agree on Oil Cooperation

Russian state-controlled oil company Rosneft and the Government of the Kurdish Autonomous Region of Iraq signed the documents required to put into force Production Sharing Agreements (PSA) with respect to five production blocks located in the Kurdish Autonomous Region.

The share of Rosneft Group Subsidiaries in PSA will be 80%, the amount of payments for the projects farm-in and geological information for each of  five blocks ranges from 40 mln. USD  to 110 mln. USD and may total to 400 mln.USD (incl. 200 mln.USD that can be compensated by oil produced from block), the heads of terms of the agreements and the basic principles of product distribution are similar to the PSA in Iraqi Kurdistan that were signed by other international oil and gas companies.

The parties agreed to implement the geological exploration program and to start pilot production as early as in 2018. In case of success, in 2021 it is planned to start full-field development of the blocks. According to conservative estimates, the total recoverable oil reserves at five blocks may be about 670 million barrels.

The documents were signed in pursuance of the Investment Agreement which was concluded at the St. Petersburg International Economic Forum in 2017.

(Source: Rosneft)