Oil Search takes stake in Kurdistan prospect
Oil Search Ltd., Sydney, has consolidated its position in Iraq by taking a stake in an oil exploration project in the country's Kurdistan region.
MELBOURNE, May 13 -- Oil Search Ltd., Sydney, has consolidated its position in Iraq by taking a stake in an oil exploration project in the country's Kurdistan region.
The company has taken an 18.75% interest in the Shakal license area operated by Prime Natural Resources in the Zagros fold belt fairway in northeastern Iraq.
Oil Search says the block could contain as much as 250 million bbl of oil and that the move is part of its strategy of focusing on areas in the Middle East that offer potential for large discoveries.
The Shakal Block is on trend with Pulkhana oil field, which has proved reserves of 300 million bbl. In addition, Iraqi oil was originally discovered in the nearby Kirkuk region that contains one of the world's supergiant accumulations.
The 632-sq-km Shakal license has been awarded for a 7-year exploration period followed by a 20-year production period with options to extend. The drilling commitment is for two wells before yearend.
Oil Search says the area is lightly explored and contains some of the most prospective geology in the world. Managing Director Peter Botten admits that Iraq clearly is a high-risk area, but Kurdistan is regarded as relatively stable from a business and security risk perspective, and there consequently is increasing foreign investment in the region.
Prime holds a 45% working interest in the Shakal PSC, and Petoil holds 11.25%. Government-owned KRG has a 20% revenue interest, while the remaining 25% working interest and 20% revenue interest will be held by a yet-to-be-announced third party.
Oil Search also has a 20% share in a company that holds 50% in the Bina Bawi production-sharing contract in Iraq.