Monday, 7 February 2011
GKP: He said, (s)he said
Firstly we had Iraqi President Al-Maliki saying in public that he was going to agree to the Kurdish terms and accept their contracts that they have signed with foreign oil companies. This is huge news, as this has been the political stumbling block for the past few years. In southern Iraq the terms offered by the Iraqi government are not very profitable for foreign firms, on the other hand the oil is there and it is an operational matter of pumping the oil and delivering it to market.
In Kurdistan it is an exploration play, and indeed, some of the hardest onshore drilling in the world to find the oil. Many companies, like Sterling Energy have invested a lot of money for no success. So the Kurds feel right to have offered these companies better terms.
However, later in the day today former Iraqi minister al-Shahristrani said that al-Maliki had been misquoted and the Government position of demanding re-negotiation or cancellation of the Kurdish contracts was still the position.
Given the complex nature of the political situation, with the Kurds holding the balance of power in the Iraqi parliament, one would expect that they will get their way sooner or later; but the progress makes for interesting trading opportunities!