Russian Rosneft signs 'offtake contract' with Kurdistan in oil sector

ERBIL, Kurdistan Region (Kurdistan24) – Rosneft oil company on Tuesday reported they had signed a cooperation agreement with the Kurdistan Region during the International Petroleum (IP) week conference in London, England.

The agreement relates to the fields of upstream, infrastructure, logistics, and trading, according to the Rosneft announcement.

“Pursuant to the Cooperation Agreement, the parties signed a pre-financed Crude Oil Purchase and Sale Contract of Kurdistan Region Crude oil over the period 2017-2019. The purchaser of crude will be Rosneft’s trading arm – Rosneft Trading SA,” the oil company stated.

The Chief Executive Officer of Rosneft Igor Sechin added they looked forward in developing a new international market for the Kurdistan Region’s crude oil.

“We are delighted to be embarking on new activity together in the Kurdistan Region and look forward to developing new markets worldwide for Kurdish crude oil,” Sechin continued.

“The off-take and supply of Kurdish crude oil into Rosneft’s expanding worldwide refining system will further contribute to the increase in its effectiveness,” he explained.

The Kurdistan Region has billions of proven oil reserves that exports 600,000 oil barrels per day to Turkey’s Ceyhan port which is then transferred to the international oil markets.

“This deal represents a new beginning in our relationship with Rosneft and opens up the possibility of a broader relationship in all fields of energy cooperation…within Kurdistan,” Rosneft quoted the KRG Minister of Natural Resources Ashti Hawrami.

The federal government of Iraq has softened its tone on the KRG in the past several months as both parties cooperate militarily in the battle of eliminating the Islamic State in Mosul.

However, the Iraqi state oil firm SOMO still frequently threatens to sue buyers and sellers of the Kurdish crude oil.

Editing by Karzan Sulaivany