US-based Sterling Global Operations has won a series of contracts to find and remove land mines and other explosive remnants of war from the Kurdistan region to make the area safe for oil exploration and other commercial development.
The contracts are with the Kurdistan Regional Government (KRG) and several international oil companies and are worth about $10 million combined.
They represent an expansion of the munitions-response specialist’s operations into the oil and gas sector, as more areas in strife-addled regions become attractive targets for hydrocarbon exploration.
“This is an area of Iraq that has excellent potential for energy and agricultural development,” said Andy Gleeson, Sterling’s Iraq mine action project manager. “It’s territory that has obviously seen extensive fighting over a long period of time. That means it’s dangerous to drill without knowing there aren’t explosives in the way.”
Sterling, headquartered in Tennessee, is currently carrying out surveys and risk assessments and removing explosive remnants of war (ERW) like land mines, cluster bombs, rockets, among other things. The work is taking place across “several million square metres” all throughout the Kurdistan region.
“You can’t just hope these dangerous materials aren’t there,” Gleeson said. “You have to be sure.”
Gleeson said the removal of unexploded devices would also enable new homes, roads and schools to be built. Most of the survey and explosive-removal work will be done by Iraqi and Kurdish workers trained and supervised by Sterling.
This is Sterling’s second foray into oil and gas work. At the end of 2011, Sterling performed risk assessments and surveys for independent Kuwait Energy at that company’s Siba concessions in Basra in southern Iraq.
“There was a little bit of a gap, but activities in Kurdistan have picked up and we now have multiple contracts,” said Steve Priestley, Sterling’s director of business development for munitions response.
Under the latest contracts, Sterling is working with companies active in Kurdistan such as Gazprom Neft, Gulf Keystone and an “international supermajor” that Priestley declined to name.
It could not be confirmed if that supermajor was ExxonMobil, but the US giant is well known to be working in Kurdistan after defying orders from Baghdad and signing six production sharing contracts (PSCs) with the Kurdistan Regional Government in 2011.
“As companies are stepping up their exploration, we’re getting involved in the survey phase,” Priestley said. “When they start field development, that calls for more clearance support as well.”
Priestley expects more work from oil companies in the coming years, as attention turns to current and former war zones like northern Afghanistan, Libya, Somalia, Yemen and Egypt, where he said munitions are still left over from World War II.
“What we’re finding is that a lot of place oil companies are now looking at were not at the top of the tree a few years ago, but now they are emerging areas where people want to explore,” he said.
Sterling is currently helping Gazprom clean up its Shakal oilfield. Next on the list is the Russian giant’s Halabja concession, near the town where Saddam Hussein infamously killed thousands of Kurds with chemical weapons.
Scrubbing such “heavily contaminated” sites is important to safely explore for resources, Priestley said.
“There are a great many areas of our world that have potential to supply the increasing demand for energy; however, a concern about explosives in an area brings exploration there to a halt,” said Sterling chief executive Matt Kaye. “We can help them get things moving.”