Oil companies are flocking to tap into the wealth in the Kurdish north of Iraq as upstream potential in other parts of the world declines, investors say.
The Kurdistan Regional Government in Iraq reached a February revenue-sharing deal with Baghdad and expects a political breakthrough on a long-awaited hydrocarbon law by the end of the year.Paul Atherton, chief financial officer with Heritage Oil, which holds assets in northern Iraq, told the Financial Times the resource potential there was significant.
"There are very few places left in the world with onshore prospects like it," he said.
Kurdish exports through the Iraqi federal oil ministry are expected to increase from around 175,000 barrels of oil equivalent per day to 200,000 barrels by the end of the year.
Market analysts at IHS Global Insight told the Financial Times that some supermajors are staying on the sidelines because they don't want to upset the political balance in Iraq. But Phil Corbett, an oil and gas analyst at Royal Bank of Scotland, told the newspaper upstream opportunities in Kurdistan are expanding."If you want to go, you've got to buy companies or farm in to existing concessions, so I think we'll see a lot of corporate activity going forward," he said.