Iraq has signed a final service contract with a consortium of two gulf companies, one of which is Kuwaiti, to develop the ninth of 12 exploration blocks included in the fourth round of licenses. The signing has completely ruled out a Turkish company that was part of the initial agreement in this investment.

While this contract reflects the improved economic relations between Iraq and Kuwait following years of animosity, it also shows the depth of the dispute between Baghdad and Ankara.

Iraq gave the Kuwait Oil Company and Emirati Dragon Oil the final rights to explore and develop an area estimated at about 900 square kilometers in the oil-rich southern city of Basra with a profit of $6.24 per barrel of oil equivalent. The move has ruled out a Turkish company that was part of the initial award of this contract.

The Iraqi Oil Ministry had signed a preliminary agreement last July with a consortium of companies consisting of the Kuwait Energy Company, Emirati Dragon and the Turkish TPAO to explore the ninth area, but the Turkish company was excluded under mysterious circumstances. The Iraqi Oil Ministry has refused to comment on the reasons behind the exclusion of the Turkish company from the deal, saying only that the decision was issued by the government, and that the ministry had nothing to do with it.