Iraq to Sign Akkas field Deal

Iraq, seeking to rebuild its energy industry after years of conflict and scarce investment, will soon sign a delayed deal for the Akkas natural-gas field and review production-sharing contracts signed separately by the semi-autonomous Kurdish region, the country’s oil minister said.

Iraq originally planned to sign the Akkas agreement on Nov. 14 with Korea Gas Corp., known as Kogas, and KazMunaiGaz National Co., Kazakhstan’s state fuel producer. The deal stalled on concerns by local authorities, which feared the gas from Akkas would be exported without benefiting nearby communities.

“We will sign the initial agreement with the group of companies within the coming days,” Abdul Kareem al-Luaibi told reporters in Damascus today. The contract will then be sent to the Council of Ministers for approval, he said.

Iraq, holder of the world’s fifth-biggest crude reserves, needs foreign investment and expertise to help ramp up its energy exports and finance the rebuilding of the economy and infrastructure. The government has signed 15 licenses for oil and gas exploration since the 2003 U.S.-led invasion that ousted former President Saddam Hussein.

One of the most contentious issues has been oil production in the Kurdish region, where local authorities angered the central government by signing their own production agreements with foreign companies such as DNO International ASA of Norway and Turkey’s Genel Enerji AS. The Oil Ministry refused to recognize these contracts, and exports of Kurdish oil that began in June 2009 ended a few months later amid a payments dispute.