| 2007: Heritage agrees Kurdish oil contract |
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October, 3 2007 Heritage Oil became the latest small company to strike an oil deal in Iraq when it won an oil producing license and a refinery contract with the regional government in Kurdistan yesterday. The Toronto-listed company is run by Tony Buckingham, one of Britain's richest men. A growing list of mid-tier companies are looking to get into Iraq early and take advantage of a new oil law passed by the autonomous regional government. Companies operating in Kurdistan include Addax, Dana Gas and DNO, which produced the first oil from a new source in Iraq since the US-led invasion in 2003. Fewer companies have shown interest in deals in the Arab part of Iraq, where 97 per cent of the country's reserves lie. The security situation has deterred oil majors, which are also acutely aware that Baghdad does not recognize the legality of agreements signed with Kurdistan. Heritage expects to start drilling its Kurdish concession next year. It has also formed a joint venture with the authorities to build and operate a refinery near the license, which will have a capacity of 20,000 barrels of oil per day. Paul Atherton, chief financial officer, said the deal would not compromise the company's ambitions to work with the government in Baghdad, where some politicians have voiced displeasure at the Kurdish law. "We like to think we have good relationships with both sides and that we will not be blacklisted," he said. Heritage had provided technical training for both Kurdish and Baghdad-based oil officials. Mr Atherton expected the deal to be validated by the Baghdad government in due course. Mr Buckingham was once instrumental in the hiring of Executive Outcomes and Sandline, two private security companies, by the governments of Sierra Leone and Angola, which defeated rebels in their civil wars. The Heritage founder has proved adept at making deals in hostile environments. Heritage not only has interests in Russia and Oman, but is also involved in exploration and development in the Great Lakes region bordering Congo and Uganda. Industry sources said the status of Heritage in Iraq could be boosted because of Mr Buckingham's connection to Tim Spicer, who ran Sandline and whose company Aegis provides security services to the US government in Iraq. |