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Business

UAE-Europe venture to develop gas fields in northern Iraq

Latest update : 2009-05-18

Two private firms based in the United Arab Emirates have partnered with Hungarian and Austrian oil and gas companies to develop gas fields in the autonomous Kurdish provinces of north Iraq in a venture worth an estimated eight billion dollars.

AFP - Two UAE firms said on Sunday they had partnered with European firms to develop gas fields in the Kurdish autonomous region of north Iraq in a venture worth an estimated eight billion dollars.

In a statement issued in Sharjah two private UAE firms, Dana Gas and Crescent Petroleum, said the operation will be in partnership with MOL Hungarian Oil and Gas Company and Austrian oil and gas giant OMV.

It said MOL will become a 10 percent shareholder in Pearl Petroleum and Crescent Petroleum and Dana Gas will each become three percent shareholders in MOL.

Pearl Petroleum holds Crescent Petroleum and Dana Gas upstream interests in Iraq's Kurdish region.

The four European and UAE partners will invest some eight billion dollars in the autonomous Kurdish region of Iraq in the coming years, the statement said.

This will meet local Iraqi gas and electricity needs and also "facilitate subsequent exports of surplus natural gas into neighbouring countries, including Turkey and beyond into Europe."

The deal to help develop gas fields in northern Iraq could later supply the European Union's flagship Nabucco pipeline, OMV said.

OMV, the largest oil and gas group in Central Europe, said it had acquired 10 percent of the Pearl Petroleum Company, which is developing two large gas fields in the Kurdish region of Iraq: Khor Mor and Chemchemal.

"OMV now has the rare opportunity to participate in the appraisal, development and production of very large gas reserves close to the European market which has significant potential to serve as feedstock for the Nabucco pipeline," Helmut Langanger, the group's vice-president in charge of exploration and production, said in the statement.

"This transaction will significantly enhance OMV's position within the Middle East especially as OMV sees the Kurdistan Region of Iraq as an important area for growth," he added.

The Austrian company has so far invested 350 million dollars (259 million euros) but "contingent payments may be made depending on further reserves determinations," it said.

OMV is one of the shareholders in the Nabucco gas pipeline, which is aimed at bringing gas from the Caspian Sea to Europe while bypassing Russia, in a bid to reduce the EU's energy dependence on Moscow.

But Nabucco has had difficulties finding suppliers to provide gas for the pipeline, with three key nations, Kazakhstan, Turkmenistan and Uzbekistan refusing to sign an agreement on the scheme at a meeting in Prague earlier this month.
 

Date created : 2009-05-18

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