South Korea's state-run petroleum company said on Tuesday that it has discovered crude oil reserves in two blocks in northern Iraq.
AFP reports that the Maeil Business Newspaper said the reserves in the Bazian and Sangaw North blocks in the Kurdistan autonomous region are estimated to total two billion barrels.
But the Korea National Oil Corp (KNOC) said in a statement it was too early to estimate the size of the reserves. It said a formal announcement of the discovery would be made only after consultation with local authorities.
The Bazian block, in which a KNOC-led South Korean consortium has a 100 percent stake, holds an estimated 1.27 billion barrels, the newspaper said, quoting sources at KNOC and the Ministry of Knowledge Economy.
Sangaw North, in which KNOC has a 20 percent stake, is believed to have 790 million barrels, it said.
Under a production-sharing contract with Kurdistan, South Korea would have some 410 million barrels, it added.
KNOC secured five exploration blocks in northern Iraq (Kurdistan autonomous region) in November, 2008.
The five blocks, located in the Zagros basin of northern Iraq, are estimated to have 7.2 billion barrels of petroleum resources. KNOC operates three of these blocks - Qush Tappa, Sangaw South, Bazian - and is a partner in the Sangaw North and Hawler blocks.
Canada's Heritage Oil has already discovered a large crude reserve just three kilometres from Bazian, Yonhap news agency said.
The Iraqi central government has lodged a protest over KNOC's development of oilfields in Kurdistan and excluded it from its own oil development projects.
(Sources: AFP, KNOC)