By John Lee.
The Iraqi cabinet has expelled Turkey's state-owned Turkiye Petrolleri AO (TPAO) from the consortium that was granted the rights to explore energy block 9, and has asked Kuwait Energy to take over the shareholding.
Abdul Mahdi Al Ameedi, director of the oil ministry’s Petroleum Contracts and Licensing Directorate (PCLD), said:
"For reasons to do with non-technical issues and outside the responsibility of my office and me personally ... the Turkish company TPAO was excluded from the consortium ... This decision is final, there is no approval to sign the contract for Block 9 ... The decision (to expel TPAO) is from the cabinet."
A consortium of companies, comprising Dragon Oil (30%), TPAO (30%) and Kuwait Energy (40% and operator), was awarded the exploration, development and production service contract for the 900-square-kilometer (350-square-mile) Block 9 in Iraq’s fourth bidding round in May. The bid for Block 9 was awarded on the basis of a remuneration fee of US$6.24 per barrel of oil equivalent.
The change would mean Kuwait Energy's holding would increase to 70 percent.
TPAO also has a 7.5 percent holding in the Badra oil field development, and along with Kuwait Energy, was awarded the contract for the Siba gas field in October 2010.
The explusion comes at a time of political tensions between Baghdad and Ankara, with Turkey refusing to extradite Deputy Prime Minister Hashemi to Iraq where he has received four death sentences, and with the two sides taking opposing views on the crisis in Syria.
Earlier this week it was reported that Turkey had signed a major contract to drill oil wells in Iraq.
(Sources: AFP, Reuters)