Business

Thursday October 1, 2009

Official: S.Korea to begin oil drilling in Iraq


SEOUL: South Korea's state-owned oil company will begin drilling for oil Thursday in northern Iraq amid a dispute between the Kurdish regional government and Baghdad over the legality of such resource deals.

Korea National Oil Corp. and other South Korean companies in a consortium it leads will drill for about three months in the Bazian field in the northern Kurdish region, said a senior KNOC executive, who spoke on condition of anonymity, citing the sensitivity of the issue.

The Kurdish regional government and Iraq's central government have been at odds over management of the Middle Eastern country's oil and gas exploration.

The central government in Baghdad says that deals signed by the Kurds with foreign companies are illegal.

South Korea's Yonhap news agency reported Thursday that the Bazian field could hold up to 1.2 billion barrels, or enough to cover about 18 months of South Korea's crude imports, citing sources in Seoul's Ministry of Knowledge Economy.

Resource-poor South Korea imports virtually all of its oil, most of it from the Middle East.

The KNOC official declined to provide an estimate of the size of the Bazian field, saying it would not be known until after the drilling was completed.

Iraq has at least 115 billion barrels of proven oil reserves. It also has at least 112 trillion cubic feet of natural gas reserves.

KNOC has signed a package of exploration deals with Kurdish authorities. - AP


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