Bloomberg News

Total Follows Exxon, Chevron Into Kurdistan Region of Iraq

July 31, 2012

Total SA (FP), France’s largest oil producer, followed Exxon Mobil Corp. (XOM:US) and Chevron Corp. (CVX:US) into the Kurdistan region of northern Iraq.

Total bought a 35 percent stake in the Harir and Safen blocks from Marathon Oil Corp. (MRO:US), the Paris-based company said in today. The two blocks cover an area of 705 square kilometers (270 square miles) and 424 square kilometers respectively. Total will be the operator of the Safen block, it said.

Iraq’s Baghdad-based Oil Ministry has rebuked Exxon and Chevron for signing contracts with the semi-autonomous Kurdish region. The Kurds halted crude shipments on April 1 through a pipeline controlled by the central government in a dispute over tax revenue from oil, and they have announce plans to build their own export link.

“Total confirms its commitment to contribute to the development of the oil industry in Iraq and is looking for new opportunities,” the company said in the statement.

A Marathon official declined to comment on the financial details of the transaction.

The Kurdish region plans to increase output to 2 million barrels a day by 2019, Michael Howard, an adviser to Kurdistan Natural Resources Minister Ashti Hawrami, said in a June 10 phone interview. It has signed energy agreements with about 50 companies and plans to increase output to 1 million barrels a day by 2015 from about 300,000 barrels a day now, he said.

Kurdish authorities recognize production-sharing agreements, which give investors a share of any oil they may produce, whereas Iraq’s Oil Ministry offers only fee-based service contracts.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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Companies Mentioned

  • XOM
    (Exxon Mobil Corp)
    • $101.74 USD
    • -0.83
    • -0.82%
  • CVX
    (Chevron Corp)
    • $128.47 USD
    • -1.78
    • -1.39%
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