Total Closes Oil Exploration Deal with Kurdistan

Total, the energy giant of France, recently said that it had closed a deal on oil exploration in the region of Kurdistan in the northern area of Iraq. The move is expected to possibly put Total in disagreement with Baghdad’s central government as Iraq’s capital.

According to a statement from Total, the company has finalized an oil investment in a 35% interest stake in Harir and Safen, two major oil blocks in the northern region. The acquisition was previously held by US company Marathon Oil.

The move happened one week after Chevron, an energy giant in the United States, was banned by Iraq from working in the country’s non-Kurdish areas after it purchased two oil exploration blocks in the independent region of Kurdistan. The purchase was also against the wishes of Baghdad.

The capital of Iraq considers any Kurdistan-signed contract that does not have the approval of the oil ministry of the central government to be invalid.

Last April, Hussein al-Shahristani, the Deputy Prime Minister for energy affairs of Iraq cautioned Total that whatever deal they sign with the autonomous Kurdish region of Iraq will be considered illegal.

Total is included in a group together with CNPC of China and the Petronas group of Malaysia that seeks to increase output at the Halfaya field located in the Southern Maysan province of Iraq. The field has been proven to consist of reserves amounting to 4.1 billion barrels.

Baghdad approved the contract in the month of December 2009.

The fight over oil contracts is only one of the many that occur between Baghdad’s central government and Arbil’s Kurdish authorities.