Chevron has confirmed that it will acquire the interest in two exploration blocks in the Kurdish region of Iraq from India’s Reliance Industries.
Chevron will acquire Reliance Exploration & Production’s 80%Â interest and operatorship of the production sharing contracts (PSCs) covering the Rovi and Sarta blocks.
The blocks are located north of Erbil and cover a combined area of approximately 490 square miles (1,124 square kilometers).
“Chevron believes the Kurdistan Region of Iraq holds considerable promise and this investment aligns well with our strategy,” a Chevron spokesman told Reuters.
Austrian oil firm OMV, which is part backed by Abu Dhabi’s IPIC, retains its 20% non-operating interests in the fields.
The news follows fervent industry speculation and news reports by the Sunday Times of London and Reuters. Unnamed sources cited by Reuters put the deal value at $200 million.
The Kurdish regional government has pulled further away from Baghdad after withdrawing the region’s oil from national exports. The government has commissioned a pipeline to take up to 1 million barrels of oil directly to Turkey, and has begun trucking modest quantities of crude across its border to Turkey for processing, incensing Baghdad, despite the latter’s ban on refined shipments to the region being blamed for the move.Â
Chevron is the second US supermajor to enter the Kurdish region’s oil industry, after ExxonMobil signed up for six unallocated blocks late last year, three of which are in disputed territory. Unlike Exxon, Chevron has no interests in the rest of Iraq.
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