A Norwegian independent energy company – DNO– plans to produce oil in Iraqi Kurdistan early next year after successful initial drilling. If further tests are also positive, it could lead to the first barrels produced by a foreign oil operator in Iraq and raise the question over who controls Iraq’s vast petroleum resources.
The Norwegian firm signed a deal in June 2004 with the Kurdistan regional government, a production-sharing agreement covering an area 250 miles north of Baghdad close to the Turkish border. Preliminary studies from a well called Tawke, showed five reservoir levels of oil. Iraqi officials have suggested that the Tawke field could have reserves of about 100 million barrels, although the Kurdistan region is said to contain about 45 billion barrels.
Other oil companies are now also active in Kurdistan, including the Canadian companies Heritage Oil, and Western Oil Sands. But who utlimately owns the oil – the regional government of Kurdistan or the powerful Oil Ministry in Baghdad.