|
Warzone where oil prospects outweigh risks
27.10.2008
By Robin Pagnamenta in Erbil, Kurdistan region
|
|
|
|
October
27, 2008
Erbil-Hewler, Kurdistan region "Iraq", —
Half way up a barren mountain in northern Iraq the
earth begins to shake. Starting slowly, a deep
rumble is heard, stopping suddenly with a thin
hydraulic hiss. But this is no earthquake. It is
part of a seismic test to search for oil in a region
where crude is so prolific that it oozes from the
rocks.
Andy Grosse, exploration director of Sterling
Energy, the British company funding the programme,
says: “There is nowhere else left like this on earth
— where there is so much potential but so little
exploration has been done. For an oil company, it's
like being a kid in a sweet shop.”
In Baghdad,www.ekurd.net
officials continue to
hammer out details of a new oil law while Western
oil giants bang on the door for access to vast,
established fields further south. But here in
Kurdistan, the scramble for Iraq's immense reserves
is well under way.
Since the regional government, acting independently,
awarded exploration licences to 24 smaller foreign
companies last year, the remote Zagros mountains
have swarmed with an international army of seismic
crews, drillers, their support staff and security
teams.
On Sterling's concession near the village of Sangaw,
four huge vibrating trucks with 6ft wheels, each
weighing 27 tons, are shooting shockwaves deep into
the earth. Behind them, strung in a line for miles
along the surface, thousands of small microphones
pick up the response, identifying reservoirs of oil
that could lie 3 or 4km underground.
Garmyan Arif, a Kurdish employee of Sterling, is one
of 250 workers on the seismic programme, of which
150 are armed guards. He says with a smile: “It's
amazing - we have never seen this kind of thing in
Kurdistan before.”
Nobody knows how much oil is here but the potential
for big discoveries is obvious, judging by an arid
riverbed a few kilometres away where viscous black
crude trickles from a gash in the earth.
“This is fairly high quality crude,” says Mr Grosse,
a geophysicist, sniffing at it. “It's very
encouraging. We know there is oil here, it's just a
question of finding the trap in the subsurface where
the oil is seeping out.”
Iraq has 115 billion barrels of proven reserves,
behind only Saudi Arabia and Iran. Far more might
lie undiscovered, much of it in Kurdistan.
“In the early days,www.ekurd.net
they found so much oil
further south around Basra where it could easily be
exported by tanker that they didn't really bother
looking up here,” said Mr Grosse. “It was remote,
mountainous. There was no way to export it. Then
politics came into play in the 1970s and this became
a no-go zone.”
Kurdistan, a region half the size of Ireland, could
easily contain 30 billion barrels — putting it on a
par with the United States with 29 billion.
Back in Erbil, the Iraqi Kurdistan's capital, where
hotel lobbies buzz with oil executives from Paris,
London, Houston and Seoul, the sense of excitement
is palpable.
There have already been big discoveries. Last year,
DNO of Norway found 1.3 billion barrels near the
Turkish border. Another find has been made by a
Turkish company with Addax of Canada. With so much
exploration going on in such a prospective area,
more discoveries seem certain. In some blocks “it's
a bit like shooting fish in a barrel”, Mr Grosse
quips.
As with everything in Iraq, prospecting for oil is
not without complications. It is not just the need
for new pipelines and infrastructure, the risk that
seismic testing using dynamite can detonate
unexploded mines, or the need to take tortuous
detours along mountain roads to avoid troublespots.
More importantly, political questions continue to
hang over the legality of Erbil's decision to
allocate oil blocks independently of Baghdad. Oil
export licences can be granted only by the central
Government, which is still horsetrading with the
Kurds over a framework for distributing oil
revenues. As no such licences have been granted, it
would be illegal for any company to start exporting.
It is the political risks that have put off bigger
oil companies such as BP and Shell,www.ekurd.net
which are chasing
contracts with Baghdad for access to the vast fields
of southern Iraq.
The small fry believe this leaves them free to find
and develop new fields on their own. “This is virgin
land,” said Awat al-Barzenji, project director of
Kar Group, an engineering company involved in
several oil projects. “Some people may be hesitant
to jump in but for those that do, the rewards will
be great.”
Copyright, respective author or news agency, timesonline
co.uk
Top |
Kurd Net
does not take credit for and is not responsible for the content of news
information on this page
|
® 