Oil Companies in Kurdistan Region


10/2/2013 12:25:00
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     Oil Companies in Kurdistan Region

Oil and gas reserves are undoubtedly the most important assets for Iraq's Kurdistan. According to OPEC, Iraq's resources of 143 billion barrels of crude oil and 126.7 trillion cubic feet of gas are the fourth largest in the world after Venezuela, Saudi Arabia and Iran. However, Iraq's oil production is almost half that of Iran, meaning there is plenty of room for growth.

Kurdistan accounts for 43.7 billion barrels of proven oil reserves, 25.5 billion more barrels of unproven reserves and between 3 and 6 trillion cubic meters of gas (30% of Iraq's proven oil reserves). If Kurdistan was a country, the amount of oil and gas reserves would place it among the top 10 oil rich countries in the world.


Recently, Iraq's Kurdistan has been one of the hottest spots for the global oil and gas industry. The size of the oil market has lured many iconic oil and gas personalities including Tony Hayward, the former chairman of BP, and has attracted over US$10bn in investments from foreign oil companies, according to the Financial Times. At first the Kurdistan region attracted smaller regional oil and gas players, but recently industry heavyweights like Exxon Mobil, Chevron and Total has been making deals with the Kurdistan Regional Government.

The IOC signed on to work in Kurdistan because the KRG is willing to negotiate production-sharing contracts, which as the name implies give operators a share in oil profits. That share generally results in a government take of roughly 80%, giving operators access to as much as 20% of the profits. This may not sound great, but it's leagues better than the deal available down on the south of Iraq where the companies get 1% profit sharing.

Based on an intelligence by the FT, "in 2008, there were only three drilling rigs in Kurdistan. This year there are 24 and next year there will be 40. Production, at about 200,000 barrels a day, will reach 250,000 b/d next year. By 2015, Kurdistan hopes to be exporting 1m b/d." Exports for Iraq as a whole are roughly 2 million bpd, out of total production that has now reached 2.7 million bpd.

Furthermore, the FT reports that Kurdistan's Minister of Natural Resources Ashti Hawrami forecasts a wave of consolidation as the majors swoop in. The number of operators in the region will, he says, soon shrink from 50 to 20 or less. "We're moving from the small and the beautiful to the large and the magnificent."
The future of the oil and gas industry in Kurdistan remains in the hands of Turkey. The oil exports are going through Baghdad-contolled pipeline. Many observers say that the pipeline to Turkey is only a question of time. Mehmed Sepil, CEO of Genel Energy in a recent interview for Hurriyed Daily said: "We say we can bring gas to the Turkish frontier by the end of 2015. Our first target is four bcm [billion cubic meters]... Well, we expect Turkey to buy the gas if it is so much in need of gas. It will definitely be much cheaper. Which one is better: to get gas from places far away or from next door? You can always find oil but [Kurdish] gas has a strategic advantage for Turkey."

Even though the Iraqi government accuses the Kurdistan Regional Government (KRG) of corruption and deceit over oil contracts as well as infringement of the constitutions, this has not stalled the rapid development of the sector in the Kurdistan Region. Furthermore, Mr. Sepil believes that the oil and gas contracts are in-line with the constitutions. He argues that "there is no obstacle whatsoever in the Iraqi Constitution that can prevent this. There is nothing in the Constitution that says the state company, Somo, should be a monopoly. The Constitution says that whether it is sold from Baghdad or from the north, the revenues belong to the whole Iraqi nation. In other words, the revenue from the sales done by the north going only into the pockets of the north is against the Constitution. But this will not be done. So there could be a pragmatic solution to the revenue sharing. If sales from the north are equally distributed among all of Iraq, then there won't be anything unconstitutional."

If the pipeline is build, it will mean a major game-changer in the regional dynamics that will no doubt determine the future of the region. The Washington Post reported that "according to several officials in the Turkish foreign and energy ministries, at the beginning of this year, Turkish and Kurdish leaders began to discuss the details of a strategic energy partnership — culminating in the exploration and pipeline deal currently under consideration." One thing is certain: "Kurdistan is going to emerge as a major contributor to global oil supplies by the end of this decade – possibly sooner," says Mr. Hayward for the FT.

According to Reuters, "numerically, the United States and Canada have the strongest representation in Iraq's Kurdish region. The two biggest northern producing fields, excluding Kirkuk -- which lies outside the Kurdish region and is operated by the federal authorities -- are Tawke and Taq Taq. According to documents obtained by Reuters from Kurdish opposition officials, and the KRG Ministry of Natural Resources, Norway's DNO has a 55 percent share in Tawke and Turkey's Genel has 25 percent, with the rest held by the KRG. Genel is also active in Taq Taq, together with Sinopec unit
Addax Petroleum."

List of Top Oil Companies in Kurdistan by Country

USA
 Exxon Mobil
 Chevron
 Aspect Energy
 Marathon Oil Corporation
 Hillwood International Energy
 Hunt Oil
 Prime Oil
 Murphy Oil
 Hess Corporation
 HKN Energy
 Viking International

Canada
 Forbes and Manhattan
 Western Zagros Resources
 Talisman Energy Inc
 NIKO Resources
 Ground Star
 Shamaran

South Korea
 Korea National Oil Company

Turkey
 Genel Energy
 Petoil
 Dogan

Britain
 Gulf Keystone Petroleum LTD
 Sterling Energy
 Heritage Oil
 Anglo-French company
 Perenco

UAE
 TAQA
 Dana Petroleum

France
 Total

Austria
 OMV AG

China
China acquired a significant presence in Iraqi Kurdistan after Sinopec Group bought Addax Petroleum in 2009.

Hungary
 MOL

India
 Reliance Industries

Papua New Guinea
 Oil Search

Russia
 Norbest
 Gazprom Neft

Norway
 DNO

Iraq
 Oil Search (Iraq) Limited
 Kar Group
 Qaiwan Group

Spain
 Repsol

Independent
 AFREN

Top Oil Companies in the Kurdistan Region by Activity

The upstream oil sector is dominated by medium-size foreign oil companies. The recent entry of the big heavy-weight IOC like Exxon Mobil will lead to consolidation in the industry.

 Exxon Mobil
 Chevron
 Total
 Genel Energy
 DNO
 Gulf Keystone Petroleum LTD.
 OMV
 DNO
 HESS
 Oryx Petroleum
 Repsol
 Dana Gas
 Marathon Oil Corporation
 Gazprom Neft
 MOL Group
 Hunt Oil Middle East Limited
 Oil Search (Iraq) Limited
 Talisman Energy
 Viking International
 AFREN
 HKN Energy
 Western Zagros

Local Companies
 Qaiwan Group
A diversified conglomerate based in Sulaymaniyah with activities in construction (Qaiwan Towers, Qaiwan City, Sulaymaniyah Heights), energy (Baziyan Refinery, Petrol Stations, Oil Trading), retail and hospitality (Rotana Hotel Sulaymaniyah, Qaiwan Hotel).

 UB Holding
In 2009, the company's turnover was $1.2 billion, and this increased to approximately $1.5 billion in 2010. The company is involved in the upstream, midstream and downstream sectors. At present, UB Holding is one of the leading private sector companies in Iraq.

Unlike the upstream sector, Kurdistan's refining industry is almost the exclusive preserve of locals, among them KAR Group, one of the region's largest private companies, which operates Kalak Refinery. According to the Financial Times, "in addition to Erbil and the refineries at Baiji, central Iraq, Baghdad and Basrah, there are dozens of backyard, so-called "teapot", refineries. Together they are capable of processing a total of about 790,000b/d of crude, according to the US Special Inspector General for Iraq Reconstruction. The surge in Kurdistan's oil consumption is part of a broader trend within Iraq. The country has seen its oil demand rise to more than 700,000 b/d in 2011, up from just 450,000 b/d in 2003, as economic activity improves, according to estimates by the US Department of Energy."

Top Downstream Oil Companies and Refineries in the Kurdistan Region

 UB Holding
In 2009, the company's turnover was $1.2 billion, and this increased to approximately $1.5 billion in 2010. The company is involved in the upstream, midstream and downstream sectors. At present, UB Holding is one of the leading private sector companies in Iraq.

 Baziyan refinery (Qaiwan Group)
Situated near Kurdistan's second city of Suleimaniya, Baziyan refinery was taken over in 2009 by a local trading company, Qaiwan. It is being upgraded by Ventech to increase its capacity to 34,000 b/d.

 Kalak Refinery (Kar Group)
Kalak is the largest refinery in Kurdistan. It now has refining capacity of 100,000 barrels of oil a day, a figure that is set to rise sharply in the coming years. Kalak is expanding fast. Kalak supplies 75 per cent of local demand for products such as high-octane gasoline.

Top Oil Distribution Companies Kurdistan

 Qaiwan Group
A diversified conglomerate based in Suleimaniyah with activities in construction (Qaiwan Towers, Qaiwan City, Sulaimaniyah Heights), energy (Baziyan Refinery, Petrol Stations, Oil Trading), retail and hospitality (Rotana Hotel Suleimaniyah, Qaiwan Hotel).

 UB Holding
In 2009, the company's turnover was $1.2 billion, and this increased to approximately $1.5 billion in 2010. The company is involved in the upstream, midstream and downstream sectors. At present, UB Holding is one of the leading private sector companies in Iraq.

  Sher Oil (Hewa Group)

Top Oil & Gas Sector Service | Design | Engineering & Construction Companies Kurdistan

 Oil & Gas Management Services Group
 RPS Energy
 Kar Group
 Tenaris
 Zagros Oil & Gas
Source: marcopolis
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