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RISKS IRAQ WRATH

Shell eyes key oil deals in Kurdistan

London, September 22, 2012

Royal Dutch Shell is exploring possibilities in Iraqi Kurdistan, sources said, having seen rivals Exxon Mobil and Total risk Baghdad's wrath by moving into autonomous northern region while developing major oilfields in the south.

Shell has come close to securing contracts with the region twice before but pulled back so as not to antagonise the central government in Baghdad, which regards all deals signed by the Kurdistan Regional Government (KRG) as illegal.

Any decision by Shell to follow Exxon, Gazprom and Total into the fast-growing oil province would be bound to irritate Baghdad. Even so, while the moves have displeased the central government, it has yet to kick them out of their projects.

"Shell is in conversation with the KRG," a source said. "It could eventually lead to something material in Kurdistan."

The Anglo-Dutch major is already at work in Iraq's supergiant southern oilfields of Majnoon, where it is the operator, and West Qurna-1, where it's Exxon's junior partner. The company is also in a $17 billion gas joint venture with Iraq.

"Over time, we want to work in all of Iraq, but for the time being we've got three mega-projects on the go ... we're already one of the biggest oil and gas investors in the country, so that's a big vote of confidence for where Iraq's going," spokesman Jonathan French said.

"We will, however, always be looking for new opportunities and projects where we can add value to Iraq."

Shell has always wanted a presence throughout Iraq and has long had its eye on Kurdistan, first considering involvement in 2007. A second attempt was made just a year ago with Exxon.

Kurdistan's proven reserves of 45 billion barrels amount to more than a third of the national total of 143 billion recorded in BP's annual statistical review.




Tags: Shell | Iraq | Kurdistan | oil deal |

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