TPAO Operations in Iraq

=History=

TPAO began work in Iraq in 1994. and has signed several contracts with the Iraqi government since then to operate in southern Iraq.

However following a souring of relations between Baghdad and Ankara, TPAO was expelled in late 2012 from Block 9, acquired during the country's third licensing round earlier that year. "Iraq Oil Report" reports an increasingly close relationship between the Turks and the Kurdistan Regional Government (KRG) as being a cause of the collapse in relations, however as of 2012 TPAO itself had no investments in the Kurdistan region.

=Activities and Contracts=

Badra
Following Iraq's second licensing round in 2009, TPAO was part of the consortium which won a contract to develop the Badra oilfield. The consortium, in which TPAO holds a 10% stake, (Gazprom 40%, KOGAS 30% and Petronas 20%) originally requested US$6 per barrel of oil extracted from the field but later accepted the Oil Ministry's offer of US$5.50.

Iraqi Oil Minister Husayn al-Shahristani said in 2009 that he was pleased that TPAO won the tender for Badra oilfield, adding that Iraqi authorities have been exerting efforts to boost political, economic and social relations with Turkey. The head of TPAO's International Projects Department Mehmet Ali Kaya also added in 2009 that the company regarded the tender as a first step for Iraq and that TPAO were eager to participate in other projects in Iraq.

Maysan
In 2010 TPAO joined forces with CNOOC in a second deal to develop the Maysan oilfield complex. .TPAO stepped in to take the place of Sinochem, which withdrew from the consortium during negotiations. . CNOOC holds a 63.75% majority stake in the group, while TPAO holds 11.25% and the Iraqi government the remaining 25%.

President of the Executive Board and Director General of TPAO Mehmet Uysal said that "by winning two tenders, the TPAO plans to produce 100,000 barrels of oil per day in the next three years in Iraq".

Mansuriya and Siba
When Iraq launched its third licensing round in 2010, three gas fields were tendered for development: Akkas, Mansuriya, and Siba.

A consortium of TPAO (50%), Kuwait Energy Company (30%) and Kogas (20%) finalised deals in June 2011 to jointly develop the Mansuriya field in eastern Iraq, which pays $7 per barrel of oil equivalent (boe) extracted

Kuwait Energy (60% operating stake) and TPAO (40%) won the bid to jointly develop the Siba field in the south and signed a deal that will pay them $7.50 per boe extracted.

TPAO and its partners expected to invest approximately $2.5 billion in the Mansuriya field and $1 billion in Siba. The regional and geographical proximity of TPAO and Kuwait Energy to Iraq played a role in their winning of the contracts, according to the Cyprus-based energy newsletter Middle East Economic Survey (MEES). With its stake in the Siba and Mansuriya fields.

Block 9
Following Iraq's fourth licensing round in May 2012, TPAO was part of the consortium that was awarded the contract for the 900-square-kilometre Block 9. The relative stakes held were the following: Dragon Oil (30%), TPAO (30%) and Kuwait Energy (40% and operator). The accepted remuneration fee was $6.24 per barrel.

However in November 2012 the Iraq cabinet expelled TPAO from the consortium. Abdul Mahdi Al Ameedi, director of the oil ministry’s Petroleum Contracts and Licensing Directorate (PCLD) explained that "For reasons to do with non-technical issues and outside the responsibility of my office and me personally … the Turkish company TPAO was excluded from the consortium … This decision is final, there is no approval to sign the contract for Block 9 … The decision (to expel TPAO) is from the cabinet.“ The change would mean that Kuwait Energy's holding would rise to 70 percent. According to Iraq Oil Report, "it appears that regional politics are to blame" for the decision.

=References=