Russia Investing in Oil and Gas in Kurdistan and Israel

Gazprom Neft, the oil arm of Russian energy giant Gazprom, has announced that it has obtained an 80 percent stake in the Halabja block of Kurdistan Regional Government (KRG). The Halabja agreement is Gazprom Neft’s third production-sharing agreement in Kurdistan. (Hurriyet Daily News, 28 February)

Gazprom also announced today that it is in exclusive talks to buy liquefied natural gas from Israel. The LNG will come from Tamar, the offshore South Mediterranean facility. Gazprom’s purchase of LNG from Israel will strengthen Russia’s presence in the booming Asian LNG market. Tamar, as well as Leviathan, are two major gas fields recently located off the coast of Israel.

The deal with Israel will enable Gazprom, the world’s biggest conventional gas producer, to export directly to high-priced markets in Japan, South Korea, China and India. The project would aim to start LNG deliveries in 2017. Last week, Gazprom said it had decided to build an LNG plant near Vladivostok in Russia’s Far East to also supply the Asia-Pacific region.

File photo: A Kurdish peshmerga guarding Tawk oil fields. Kurdistan Regional Government. (slate.com)

Kurdistan Regional Government Defends Trade Agreement with Turkey

Iraq’s Kurdistan Regional Government (KRG) defended its barter trade agreement with Turkey signed on Friday. Ankara-based Genel Energy will be the first Turkish company to ship oil directly from Kurdistan to Turkey through a pipeline under the agreement between the Turkish government and the KRG.

Baghdad fiercely objected to the Turk-Kurd trade agreement, with Iraqi Oil Minister Abdul Kareem Luaibi threatening to sue Genel Energy and slash central government’s allocation of 17 percent of oil and gas revenues to the region unless the KRG halts direct oil export to Turkey. (Reuters, 18 January)

The development has far-reaching geopolitical implications. Turkey with its vibrant economy lacks energy and is increasingly dependent on foreign oil imports. The autonomous Kurdish region is oil rich but landlocked. With the agreement with Turkey, it can now ship its oil directly to its neighbor through pipelines. Turkey can be guaranteed that its energy needs are met for the foreseeable future, and Kurdish autonomous government can ensure its economic independence. A Kurdish-Turkish alliance could be a potential geopolitical game changer.

File photo: Oil from Kurdistan could be shipped directly to Ceyhan marine terminal in Turkey. (Iraq Business News)

Afghanistan Maps Its Minerals – Explorations Begin

Afghanistan has become the first country whose surface minerals have been mapped from the air. The "hyperspectral imaging" produces reflections of light shone from an aircraft resulting in specific colors for different minerals.

The survey sponsored by U.S. Defense Department’s Task Force for Business and Stability Operations (TFBSO) and conducted by the US Geological Survey (USGS) has so far produced a mineral map which comprises more than 800 million data points corresponding to an area of 440,000 sq km, some 70 percent of the country.

In 2010, the TFBSO team had identified vast reserves of copper, cobalt, gold, lithium, oil, and gas in the country, estimating the value of the country’s reserves at a trillion dollars. In 2012, the first two of more than 30 world-class mines were put up for international tenders by Afghanistan’s Ministry of Mines. The exploration rights for a major iron mine was awarded to a consortium of Indian companies and a Chinese state-owned oil company won the right to explore an oil field.

Currently four large copper and gold mines are being tendered, with more than 20 companies from across the world participating in the bidding process. The early phase of the tender process for the Afghan-Tajik oil field has also begun. ExxonMobil is one of the companies that has filed an Expression of Interest to explore the vast oil field.

The recent USGS's hyperspectral imaging will now help to pin down which economically viable minerals are where.

"This is a tremendous tool for the Afghan government for locating and identifying its myriad rich mineral deposits," said TFBSO Director Jim Bullion.

"These maps clearly show the enormous size and variety of Afghanistan's mineral wealth and position the country to become a world leader in the minerals sector," Bullion added.

Photo Credit: The data distinguish a range of different minerals / USGS