Russian Rosneft, Iraqi Kurdistan Announce Joint Exploitation of Kurdish Pipeline

Russia’s oil giant Rosneft's stake in the joint oil project with the Iraqi Kurdistan may amount to 60 percent.

MOSCOW (Sputnik) — Russia’s oil giant Rosneft and the Iraqi Kurdistan government announced Friday the launch of a project to jointly use an oil pipeline in the Kurdish autonomy.

"Rosneft and the Government of the Kurdish Autonomous Region of Iraq have been gradually implementing existing agreements. The sides announced on the sidelines of the 10th Eurasian Economic Forum the launch of an infrastructure project to exploit an oil pipeline in the Kurdish autonomous region," the company said in a statement.

Rosneft’s stake in the project may amount to 60 percent, the company said. The rest will be owned by the Kurdish operator of the pipeline, the KAR Group.

The Russian firm said it had inked a package of binding deals with Iraqi Kurdish authorities in St. Petersburg to cooperate on five "production blocks" in the Kurdish region. Rosneft will pay up to $400 million "for the projects farm-in and geological information," although half of that may be compensated by oil production.

The parties have agreed to start pilot production at the blocks as early as in 2018. In case of success, full-field development of the blocks will follow in 2021.

Earlier, a political adviser of the Iraqi Kurdistan Vice President Office said that Iraqi Kurdistan would ask Russia on the sidelines of the St. Petersburg International Economic Forum to invest in its oil and gas facilities, as well as to deepen the bilateral economic ties.