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Total signed Farm-in Agreement with Marathon in Kurdistan

Total to join other Majors ExxonMobil and Chevron in the northeast Iraqi province

The French major Total and US Marathon Oil Company (Marathon) signed a Farm-in Agreement to develop two blocks in the Kurdistan region, northeast Iraq, see map below (Source: Dr. M. Izady at The Gulf/2000 Project – SIPA – COLUMBIA UNIVERSITY)

Kurdistan is one of the last onshore regions with significant resource potential per prospect, offering the potential to establish oil production in the short- to mid-term.

In addition to be oil rich the small region of Kurdistan has plentiful water, including the Tigris River and several lakes supporting a stable economical growth through agriculture and tourism.

This favorable environment attracts an immigration of a wide variety of Arab and non-Arab populations who contribute to the development of the region.

Under this Farm-in Agreement, Total acquired 35% of the working interests in the Harir and Safen Blocks so far held by the Marathon Oil KDV B.V., a wholly owned Marathon company.

The Blocks cover areas of respectively 705 and 424 square km, they are located northeast of Erbil, the Kurdistan Regional capital.

In respect with the Farm-in Agreement, the working interest will be shared between

Marathon 45%

 – Total 35%

 – Kurdistan Regional Government (KRG) 20%

Regarding the operations, Total and Marathon will also share operator role for the two Blocks:

– In Safen, Marathon will keep the exploration operator role while Total will become the operator of any future field development

– In Harir, Marathon will remain the operator.

The 2D seismic program is on going and should be completed in September 2012.

First exploration well were drilled in July for the Harir field and are expected to begin in first half 2013 for the Safen field.

Kurdistan production sharing contracts and Iraq technical services contracts in competition

Through this Farm-in Agreement with Marathon, Total is joining the other majors ExxonMobil, Chevron, Repsol having decided to take position in Kurdistan region without approval from the Iraqi Government, see map below (Source: Dr. M. Izady at The Gulf/2000 Project – SIPA – COLUMBIA UNIVERSITY)

In return Baghdad is threatening these companies to ban them from oil and gas exploration and production in other region in Iraq.

ExxonMobil has interest in the giant West Qurna 1 field

Total has a minority stake in the Halfiya field in the South of Iraq.

These International Oil Companies (IOCs) compare the conditions of the production sharing contracts (PSC) proposed in Kurdistan with the technical services contracts tendered by Baghdad.

The last calls for tender of the technical services contracts in Iraq did not attract to many candidates because of their drastic conditions, while Kurdistan PSC are offering more rewarding conditions in a safe environment.

Marathon in Kurdistan in brief

Marathon Oil Corporation (Marathon) is an International Oil Companies (IOCs).

Based in Houston, Texas, USA, Marathon Oil had net proved reserves at the end of 2011 of 1.8 billion barrels of oil equivalent (BOE) in North America, Europe and Africa.

Marathon signed production sharing contracts (PSC) for operatorship in two blocks northeast of Erbil – Harir and Safen now shared with Total.

In addition, Marathon has been assigned a 20% working interest in the Atrush Block and 25% working interest in the Sarsang Block north-northwest of Erbil.

Few month after starting exploration in Kurdistan in 2010, Marathon made two discoveries with the Atrush-1 well and the Swara Tika-1 well in the Atrush and Sarsang Blocks in the north-northwest of Erbil, confirming to the other IOCsExxonMobil, Chevron and Total how much the unexplored Kurdistan oil and gas fields may be  developed successfully on fast track.

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