Western oil major’s bid: breakthrough for troubled Iraqi industry

The prospects for Kurdish oil were given a boost yesterday when DNO, a Norwegian explorer, said that a big oil company had offered $700 million (
DNO declined to name the interested purchaser, describing it as “a large international oil company”. Speculation yesterday centred on Statoil, the Norwegian oil multinational, which recently revealed plans to open an office in Erbil, the capital of the Kurdish region, to study exploration opportunities in the region.

A bid by a big Western oil group for a Kurdish oil licence would be the first significant foreign investment in Iraq’s oil industry. The threat of kidnappings and violence has kept foreign investors from the vast oil reserves in southern Iraq, while political risk has deterred oil majors from setting foot in the Kurdish region.

Oil industry experts also pointed to Indian or Chinese companies, which have been aggressive in their pursuit of oil assets, and they highlighted the significant risk for a Western oil major in making a Kurdish investment. “No oil major would invest in the Kurdish region because they know it will wreck their chances in southern Iraq,” the chief executive of one oil company with interests in the region said.

The Times