Several international oil companies (IOCs) not previously working in the Middle East have signed up for the contracts including Austria’s OMV, India’s Reliance and Hungary’s MOL, according to the Kurdistan Regional Government.

If commercial discoveries are made, the new production- sharing contracts will provide an aggregate return of 85 per cent to Iraq, with the balance going to contractors.

“The exploration risk varies on each contract but we think these are attractive prospects,” says an executive close to the government.

Four exploration blocks in the Suleimaniyah-Irbil area were awarded to the newly created and state-owned Kurdistan Exploration & Production Company.

The exploration and production company is required to link up with a large IOC partner in the blocks to provide technical and financial support.

Kurdistan has also awarded a service contract to the Kurdistan National Oil Company to develop the Khurmala field and construct a new 50,000 b/d refinery.

Production from the Khurmala field will start gradually from existing appraisal wells, with a peak production target of 250,000 b/d.

Kurdish Minister for Natural Resources Ashti Hawrami says five further blocks are expected to be awarded soon.