Russian behemoth goes step further in investing in Kurdistan Region

Major Russian oil company Rosneft reasserted its commitments to the Kurdistan Region on Monday and announced ahead of the referendum on independence that it will invest in natural gas pipelines in the Region.

ERBIL, Kurdistan Region (Kurdistan 24) – Major Russian oil company Rosneft reasserted its commitments to the Kurdistan Region on Monday and announced ahead of the referendum on independence that it will invest in natural gas pipelines in the Region.

The announcement by Rosneft, which is owned by the Russian government, is seen as a boon to the Kurdistan Region which would be on track to become a major exporter of gas to neighboring Turkey and Europe.

The Russian-state sponsored oil company had engaged in talks with the Kurdistan Regional Government (KRG) earlier in June to discuss the possibility of oil exploration and extraction in fields currently under the Kurds’ administration.

Rosneft is once again expanding its investments in the Region by agreeing to fund a natural gas pipeline in Kurdistan, which was confirmed by both the KRG and the oil giant on Monday.

Two sources close to the deal said the investments would amount to more than $1 billion, according to Reuters.

This summer, Rosneft gave the Kurdistan Region a major loan, worth hundreds of millions of dollars and guaranteed by future oil sales, which helped the KRG settle outstanding debts with oil companies currently operating in the Region.

Rosneft is the world’s largest publicly listed oil company by production and is looking to boost its international gas ambitions.

The pipeline’s capacity is expected to handle up to 30 billion cubic meters (bcf) of gas exports a year, in addition to supplying domestic users. The Kurdistan Region allegedly sits on large untapped gas deposits, which Rosneft is hoping to export to the European market.

The pipeline will be constructed in 2019 for Kurdish domestic use, with exports due to begin in 2020.

The Kurdistan Region has been exporting oil independently from Baghdad since 2014 after its cut of the budget share was drastically reduced by the central government. The Region is set to hold a referendum on independence on Sep. 25, in which the people of the Kurdistan Region will decide whether to remain a part of Iraq or secede as a newly-formed country.