Iraq has approved an oil exploration deal with Kuwait Energy, replacing a previous agreement with the Turkish Petroleum Corporation (TPAO), which was reportedly cancelled due to Iraq’s deteriorating relationship with Turkey
The oil exploration deal covers a 900 sq km block in south Iraq, near the country's border with Iran.
According to Middle East Online, a statement from the Iraqi government said, "The cabinet decided... to approve the adoption of the recommendations of the energy committee regarding... signing exploration block number nine's contract with a coalition of Kuwaiti and Emirati companies."
The original consortium of Kuwait Energy, TPAO and the UAE’s Dragon Oil won the exploration contract in May 2012 following a public auction. Kuwait Energy held a 40 per cent stake while TPAO and Dragon Oil each held 30 per cent, with each company agreeing to be paid a service fee of US$6.24 per barrel of oil equivalent (boepd) extracted.
Kuwait Energy will now up its stake in the project to 70 per cent, with the UAE’s Dragon Oil holding the remainder.
The deal forms part of Iraq’s plans to collaborate with foreign energy firms to boost oil output and discover new deposits of energy in order to cement its role as a key global oil supplier.
Officials involved with the project announced in November 2012 that TPAO would be expelled from the contract due to "non-technical issues".
