The Kurdistan region in Northern Iraq has garnered the attention of various oil and gas operators and has seen a surge in exploration activity from the industry over the last few years.
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Kurdistan Regional Government
Kurdistan is an autonomous region in Iraq and is governed by the Kurdistan Regional Government. The government has signed dozens of production-sharing contracts with oil and gas companies to explore and develop for resources. The Kurdistan Regional Government estimates that current productive capacity in the region is 300,000 barrels of oil per day. Kurdistan is also notable for having all of its prospective acreage located onshore, as the region is landlocked and does not border any offshore areas.
SEE: Oil And Gas Industry Primer
Marathon Oil (NYSE:MRO) has interests in four exploration blocks in Kurdistan with a total of 368,000 net acres. The company participates on a non-operated basis in the Atrush and Sarsang Blocks in Kurdistan.
In 2011, operator ShaMaran Petroleum (CVE:C.SNM) reported the success of the Atrush-1 well, which encountered net oil pay in a number of Jurassic and Cretaceous formations. Marathon Oil owns a 20% working interest in the Atrush Block.
Another successful well was reported by operator Hillwood International Energy on the Sarsang Block, where Marathon Oil owns a 25% working interest. The Swara Tika-1well produced approximately 7,000 barrels per day of light oil during a test period.
Marathon Oil is planning its own operated exploration program as well, and plans to drill four exploration wells in 2012 and 2013 on the Harir and Safen blocks.
Talisman Energy (NYSE:TLM) operates three blocks in Kurdistan and has drilled two successful exploration wells here since 2010. The company discovered natural gas and condensate at the Kurdamir-1 well in 2010, and found indications of liquid hydrocarbons here. The Topkhana-1 well drilled by Talisman Energy in 2011 discovered similar resources.
Talisman Energy is working on the Kurdamir-2 well and reported production of 950 barrels of crude oil and condensate and 7.3 million cubic feet of natural gas per day from this well. The company plans to start drilling its first exploration well on the Baranan block in 2012.
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Murphy Oil (NYSE:MUR) operates and owns a 50% interest in the Central Dohuk Block in Kurdistan, and is currently drilling the Linnava-1 well here. The company is optimistic that this well will be productive, as it is close to several large discoveries made by other operators.
Hess Corporation (NYSE:HES) operates the Dinarta and Shakrok Blocks in Kurdistan and plans to drill a minimum of two exploration wells here in 2013 and 2014.
Exxon Mobil (NYSE:XOM) is also involved in Kurdistan and has interests in six blocks, with 848,000 net acres of prospective acreage. The company has not disclosed any exploration activity to date on these blocks.
The Bottom Line
The Kurdistan region of Iraq is a popular place for oil and gas exploration and many operators have moved forward with plans to drill wells in this area.
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.