Rosneft confident of major investments in Kurdistan

ERBIL, Kurdistan Region (Kurdistan 24) – Rosneft will proceed with its projects in the Kurdistan Region and expressed excitement about the economic prospects of the beleaguered region despite Baghdad’s attempts to cut the Kurdish economy from the world.

“In terms of Iraqi Kurdistan, we are obviously moving forward on the projects, and we are actually quite excited about that opportunity,” Pavel Fyodorov, the company’s first vice-president, told the Financial Times. “It is a manifold opportunity that has infrastructure and production components to it.” 

The Russian state-owned company signed the major contracts with the Kurdistan Regional Government (KRG) to develop five oil blocks in October, not long after the Sep. 25 independence referendum for the Kurdistan Region was held.

Despite escalating tensions in the region, both Rosneft and Russian President Vladimir Putin affirmed their commitment to investing in the Kurdistan Region, claiming they saw “no roadblocks” to strengthening ties.

“Our companies, especially Rosneft, are working in the [Kurdistan Region],” the Russian President said during his annual end-of-year press conference. “We believe this will benefit Iraq, Kurdistan, and, in particular, it benefits the Russian economy.”

Earlier this month, Russian Energy Minister Alexander Novak announced on Twitter that the Government of Iraq had “no objections regarding operations by Russian oil companies” in the Kurdistan Region.

The Russian giant had previously mentioned that its investments in the Region amounted to some $400 million for the development of five production blocks, a new gas pipeline, and other infrastructure projects. Rosneft reiterated the projects were proceeding as planned.

“Kurdistan has, in our view, a fairly exciting economic proposition in place. It has a very high-quality geological reserve, and there are fairly low costs associated with the production,” said Mr. Fyodorov. “The terms that have been offered to us are remarkably value-accretive to Rosneft shareholders.”

The deal was signed in the aftermath of the Kurdistan Region’s independence referendum, which resulted in increased tensions between the KRG and the central government in Baghdad.

Kirkuk, an oil-rich city long disputed between Erbil and Baghdad, was included in the independence vote but then fell to the Iraqi Forces and Iranian-backed Hashd al-Shaabi militias, who attacked the multi-ethnic city and took over the high-production oil fields.

Putin has been firm that his country would not “interfere” in the disputes between Erbil and Baghdad but stressed that all the issues have to be resolved “within the framework of the Iraqi Constitution, away from violence, and with respect to the sovereignty and unity of Iraq.”