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Russia's Gazprom Neft beefs up security at its Iraqi Kurdistan branches

The company's management is prepared for any situation, Gazprom Neft Middle East CEO says

© Gazprom Neft

MOSCOW, September 28. /TASS/. Gazprom Neft Middle East, a division of Gazprom Neft in Iraqi Kurdistan, operates in a regime of increased security due to the situation with the referendum on the independence of the region, Gazprom Neft Middle East CEO Sergey Petrov said in an interview with Nefte Compass.

He also recalled that in 2014, given the increased terrorist threat at the time, the company conducted full evacuation of employees.

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Petrov added that Gazprom Neft Middle East is discussing with the authorities of the region the possibility of changing the terms of production sharing agreements (PSA) for the company's projects.

According to Petrov, the company and the regional government discuss how to improve working conditions. He added that PSAs were signed at a time of high oil prices, and when prices fell, new investments in the region were on the verge of economic expediency.

Petrov also explained that today the sale of oil is based on a formula that relies on the price of the Brent indicator and takes into account the discounting amendments. The size of the discount is affected "by several factors: transportation, oil quality, road taxes," he added.

Russian Energy Minister Alexander Novak told reporters earlier that the Ministry expects the independence referendum in the Iraqi Kurdistan will not affect operations of Russian oil producer Gazprom Neft in the region.

"Gazprom Neft is working in Kurdistan. These are longstanding relations agreed with all stakeholders. Therefore, I believe implementation of this project should continue," the minister said.

The situation should be reviewed, Novak said responding to a question regarding potential risks for Russian oil companies during operations in Kurdistan. "We will consider this issue separately and comment," the minister added.

The independence referendum was held in Iraqi Kurdistan on September 25, with results to be summarized in several days. Iraqi Kurdistan is an informal name of the Kurdistan autonomous district in Iraq.

Russia’s Gazprom Neft is currently engaged in oil development in the region. The company planned to increase its oil production by 17% to 220,000 tonnes in Iraqi Kurdistan.

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