OMV subsidiary signs PSCs with Kurdistan

OMV Petroleum Exploration has signed on as operator under two PSCs for two exploration blocks with the Kurdistan regional government of northern Iraq.

Nov 7th, 2007

By OGJ editors
HOUSTON, Nov. 7 -- OMV Petroleum Exploration GMBH, a subsidiary of OMV AG, has signed on as operator under two production-sharing contracts for two exploration blocks with the Kurdistan regional government (KRG) of northern Iraq.

The blocks, Mala Omar and Shorish, cover 800 sq km nearby KRG capital city, Erbil. Both blocks are believed to offer significant potential for major oil discoveries, company officials said.

The company's entry into the Kurdistan region "strengthens our exploration and production core region [in the] Middle East," said Helmut Langanger, OMV executive board member responsible for E&P. Work on the awarded blocks will commence in 2008 with the acquisition of 2D seismic and will be followed by the drilling of an exploration well in each block over the next 3 years.

OMV has holdings in 20 countries structured around six core regions. Its production volume is 322,000 boe/d. Its reserves at the end of 2006 were 1.3 billion boe.

In October, Heritage Oil Corp. said it signed a PSC with KRG for an exploration license covering the Miran block in the southwest section of the Kurdistan region of Iraq. Heritage will begin geological work immediately and could start a high-impact exploration drilling program in 2008 (OGJ Online, Oct. 9, 2007).

Heritage's 1,015 sq km license area contains the very large Miran structure, which as expressed at surface, comprises an area of about 500 sq km and may have three separate culminations.

KRG, Hunt Oil Co. of the Kurdistan Region, and Impulse Energy Corp. recently signed a PSC covering the Duhok, Kurdistan, area of Iraq (OGJ, Oct. 1, 2007, p. 36). Hunt Oil came under pressure from the US government as a result. A US Embassy spokesman in Baghdad warned that Hunt and a handful of small "wildcat" companies that have signed similar deals could find themselves in a legal battle between the Iraqi federal government and the northern, semi-independent Kurdistan region.

"We think that these contracts have needlessly elevated tensions between the KRG and the government of Iraq, who both share a common interest in the passage of national legislation," the official said.

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