Russia keeps eye on Kurdish oil contracts, referendum
Russia has been boosting its presence in Middle East oil via the Kurdish Regional Government, but is also waiting to see what the potential impacts might be of the KRG’s independence referendum.
As major regional powers Turkey, Iraq, Syria and Iran mull the Iraqi Kurds’ independence referendum, Russia finds itself in the position of having become the major investor in Iraqi Kurdistan. Russian spending in the area’s oil and gas industry has reached at least $4 billion.
Stronger energy ties between Moscow and Erbil (the capital of the Kurdistan Regional Government, or KRG) became apparent long before the Sept. 25 referendum. In February, Russia’s state-owned oil giant Rosneft announced it would finance in advance a two-year deal, beginning this year, to buy Kurdish crude for the company’s growing global refining system.
In early June, Rosneft signed a 20-year deal to buy Kurdistan oil and refine it in Germany. The parties also inked a contract to explore and develop five oil fields “with substantial geological potential” in Iraqi Kurdistan.
On Sept. 18, Rosneft made public a project to finance construction of Iraqi Kurdistan’s gas pipeline infrastructure, with expected export capacity by 2020 of 30 billion cubic meters (more than a trillion cubic feet) a year. Domestic clients would be served as well. “The investment in the project will be under a BOOT (Build-Own-Operate-Transfer) arrangement,” the statement read. Other details were not disclosed.
