Gazprom Operations in Iraq

= History =

The beginning of Gazprom's work in Iraq was marked by the contracts signed in 2009.

= Activities and Contracts =

Badra
In 2009 during iraq's second post-war licensing round, Gazprom participated in a consortium also involving Kogas, Petronas, and TPAO which won a contract to develop the Badra oilfield in south-east Iraq. Gazprom holds a 40% stake in the consortium, with Kogas holding another 30%, Petronas 20% and TPAO a further 10%. In December 2009 Gazprom Neft's Deputy Chief Executive for Exploration and Production Boris Zilbermints said that the company would invest $2 billion in developing Badra and that they expected to pump the first crude from the field within three years.

In May 2011 Gazprom Neft, the oil arm of Gazprom announced that a 3D seismic survey had been completed at the Badra deposit, carried out by the Iraqi Oil Exploration Company. The survey was intended to give a better understanding of the structure of the deposit and to aid with the assessment of reserves. In November 2011, the company announced they had commenced drilling at the first appraisal well at Badra and that they expected to start commercial production of 15,000 barrels per day (bpd) at the field in August 2013.

Garmian and Shakal (Kurdistan)
In August 2012 Gazprom Neft became the third oil major (following moves by ExxonMobil and Total) to conclude deals with the semi-autonomous Kurdistan Regional Government (KRG) when it signed two contracts for two of the southernmost exploration blocks in the region, the Garmian and Shakal blocks. Iraq OIl Report considers that majors such as Gazprom were emboldened by Exxon's move, when it signed for contracts directly with the KRG, considered illegal by the central government, putting at risk substantial producing assets in the South. Furthermore the Shakal block extends into areas that are internationally recognised as disputed territories between the central and regional authorities.

At the Garmian block, Gazprom took a 40% stake, while Canadian company WesternZagros and the KRG retained stakes of 40% and 20% respectively. Once the exploration phase is completed Gazprom will become the operator. At Shakal Gazprom became the operator with an 80% stake and the KRG retained its 20% stake.

In November 2012 the BBC reported that the Iraqi government was pressuring Gazprom to give up their oil deals in Kurdistan or face losing their contract for the southern Basra field. In an interview with Iraq Oil Report Deputy Prime Minister for Energy Hussain al-Shahristani commented that the company will be forced to decide between their contracts in the north and the south, just as ExxonMobil had.

= References =