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KRG signs petroleum contracts with Talisman Energy
Erbil, Kurdistan – Iraq (KRG.org) - Dr Ashti Hawrami, the Kurdistan Regional Government (KRG) Minister for Natural Resources, today announced that the KRG has signed two petroleum contracts with wholly-owned subsidiaries of Talisman Energy Inc. (Talisman), an independent upstream oil and gas company headquartered in Calgary, Canada.
“The Kurdistan Region continues to attract blue-chip oil investment”, said Dr Hawrami. “Talisman is a company which brings great global experience and a world-class commitment to the communities in the countries in which they invest. We look forward to working together.”
The contracts were signed by KRG Prime Minister Nechirvan Barzani and Dr Hawrami, together with Talisman representatives, in Erbil on Thursday 19 June.
Kalar-Bawanoor block
One subsidiary of Talisman, Talisman (Block K44) B.V., will take a 40% interest, previously held by the KRG as a Third Party Interest, in the Kalar-Bawanoor Block, (also published on KRG maps as “Block K44”). It will join existing investor WesternZagros Limited, a wholly owned subsidiary of WesternZagros Resources Ltd., as a participant in the production sharing contract, with WesternZagros retaining its 40% interest. The remaining 20% participation interest will be held by the KRG, carried by WesternZagros Limited.
Block K39
A second subsidiary of Talisman, Talisman (Block K39) B.V., will conduct under a service agreement a two year exploration programme in the K39 Block (revised coordinates). The service agreement grants Talisman an option to take up a long-term production sharing contract after two years, in which they will hold a 60% participation interest, with the remaining 40% held by the KRG (20% of it being fully carried by Talisman for the benefit of a KRG owned public company, and the other 20% to become available as a Third Party Interest to be awarded to new investors by the KRG).
Capacity building and community support
As a condition of their investment, Talisman has committed, as part of its corporate social responsibility, to pay 220 million US dollars, and further conditional payments, to a segregated account under the oversight of the Kurdistan National Assembly (Parliament) for the purpose of rehabilitating the communities in areas of their petroleum activities, through infrastructure and capacity building projects. The Talisman blocks are close to the town of Halabja and some of the worst affected Anfal areas in which thousands of Iraqi Kurds were killed by poison gas in Saddam Hussain’s genocidal campaign in the 1980s. The community of Halabja and the nearby Anfalised areas remain in great need of infrastructure support, including schools and hospitals, power and drinking water, and investment in human capital.
Revenue from crude oil and gas exports
The contracts agreed with Talisman were based on the KRG’s published model production sharing contract and commercial terms. As with all Kurdistan Region petroleum operations, the contracts are governed by the Kurdistan Region Oil and Gas Law, which entered into force in August 2007.
The KRG adheres to its commitment to forward petroleum revenues from the Kurdistan Region for Iraq-wide revenue sharing when a federal revenue sharing law is in place. The KRG is bound by its own law to the principles of the Extractive Industries Transparency Initiative, and Talisman, in the two contracts, has committed to the same principles.
Industry and media inquiries: Khaled.Salih(at)krg.org
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