William MacNamara Kurdistan oil lures yet more investment

There is still risk of falling in to political quicksand but Iraqi Kurdistan continues to draw oil explorers eager to own a piece of the next big thing. For Gulf Keystone, that means exiting Algeria in favour of Kurdistan, if it can find a buyer for its Algerian joint venture interest before the joint venture falls apart.

The company, which was awarded two Kurdistan oil licenses this weekend at Sheihk Adi and Ber Bahr, noted today that it would fight its joint venture partner and operator of the Algerian permit, BG, which is attempting to exit the joint venture and claim a $7m forfeiture payment.

Several months ago Kurdish oil licenses would have inspired the kind of insecurity of Algeria’s Ba Hamou permit. But Kurdish oil minister Ashti Hawrami’s move in June to turn on the taps of Iraqi Kurdistan’s few producing fields, despite lingering objections from the central government, seems to have worked. Tawke, one of the few producing fields, is producing 40,000 bpd which will rise to 50,000 bpd soon, Hawrami said last week.

One of Gulf Keystone’s joint venture partners will be Genel Energy, the Turkish company leading the incipient consolidation of the Iraqi Kurdish concessions through its proposed merger with Heritage Oil. Could Gulf become a takeover target?