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Video: Natural Resources Minister says more major firms likely to sign exploration contracts

TUE, 22 NOV 2011 22:01 | The Financial Times

The Financial Times interviewed the Kurdistan Regional Government's Minister for Natural Resources, Dr Ashti Hawrami.

Click here for the the video of the interview: Oil majors could follow Exxon into Kurdistan

See also the transcript of the interview:

FT: Welcome to the Financial Times, joining me is Dr. Ashti Hawrami, the Natural Resources Minister of the Kurdistan Regional Government in Iraq. Thank you for joining us Dr. Hawrami.

Dr Hawrami: Thank you, thank you very much.

FT: Exxon Mobile has just signed a landmark agreement to explore in Kurdistan. What exactly do super majors bring to your region?

Dr Hawrami: Well, they bring more expertise and finance to expedite the development and the production. That’s the way we see it.

FT: Do you expect other super majors to follow EXXON into Kurdistan?

Dr Hawrami: Yes. I think the region is becoming very dynamic, in fact, it has been dynamic over the last 12 months. There is a lot of activities going on, and you are aware of the acquisition of Genel Energy by Vallares. That’s just an example; I think there will be others to follow.

FT: Minister you stated that you have a target of producing one million barrels a day by 2015. Can you tell us how you intend to get there?

Dr Hawrami: The small and the beautiful [oil companies] found the oil, and they are normally more aggressive, very quick movers [who] put their investment very rapidly in the ground. They discover, and then you need a new way of managing these finds. So they require more, for example, more drilling, more facilities, more investments—where the medium size and the large companies have better skills to do that. So, it is a natural progression of the EMP cycle, it is exactly like that in any other province, where the North Sea started, it is exactly the same thing.

FT: You signed more than forty production sharing contracts with companies in recent years. What is your ideal number, how many people do you want to have working in Kurdistan?

Dr Hawrami: We don’t have particularly a government desire or aim. I think the market forces will determine that. But if I hazard a guess, I will say, in a year or so, we may have about half of that in terms of numbers; it will be consolidation of some kind.

FT: Are you confident that the contracts that you have signed with the companies here in Kurdistan are legal?

Dr Hawrami: I don’t want to prejudge, but we are confident that what we have done is fully constitutional. I don’t have to say; forty companies working here, everybody has legal counsel, everybody looks at the constitution of Iraq, everyone looked at our model contract, everyone looked at our oil and gas law of the Region. If these independent countries [companies] and expertise have come to the conclusion we are sound constitutionally and legally, that is good enough for me and good enough for investors. I hope it is good enough for the parliament in Bagdad as well.

FT: Kurdistan has been hopeful of signing an oil law with the federal government In Baghdad for several years. How hopeful are you having this signed in the future?

Dr Hawrami: Well I have to be optimistic because I am in the middle of it. I believe we have an agreement with the federal government, and I believe that Dr. Maliki was sincere that he wants the problem to be sorted out. From our part, as a region, I am director, I am in the position to do what I have to do to contribute to that, and we will submit our contribution before the year ends, and it’s up to Baghdad, up to the Ministry of Oil, to do the same. And when it goes to Parliament, I hope the Parliament will not sit on it for too long. So it will take maybe two, three months debate and hopefully we will have, if we are serious, I think by end of March we should have a law.

FT: Dr. Hawrami, thank you for joining us. (To audience) and for more information please go to ft.com

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