Rosneft and Kurdistan establish Production Sharing Agreements
Rosneft and the Government of the Kurdish Autonomous Region of Iraq have signed documents to establish Production Sharing Agreements (PSA) at five Kurdish productions blocks.
This October, Rosneft and Kurdistan actioned five blocks for exploration and production that have substantial geological potential, with conservative estimates stating that the total recoverable oil reserves at the five blocks may be close to 670 million barrels.
Rosneft has an 80 per cent share in the PSA, which is the amount of the payments for the farm-in and geological information ranging from US$40 million to US$110 million per block, for a potential total of US$400 million.
Geological exploration and a pilot production program are anticipated to start as early as 2018; if these are successful, full field development of the blocks is planned to take place in 2021.
Further to these agreements, Rosneft and Kurdistan have announced the start of a joint infrastructure project for the operation of an oil pipeline in the same region.
The current pipeline operator, KAR Group, will retain a 40 per cent share in the project, while Rosneft has said it will take a share of 60 per cent.
“The entry into the infrastructure project will contribute to achievement of Rosneft’s strategic objectives and will enable Rosneft to enhance the efficiency of oil transportation to the end customers including supplies to the company’s refineries in Germany,” Rosneft Chief Executive Officer Igor Sechin said.
For more information visit the Rosneft website.
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