Vancouver junior producing oil in Kurdistan

Lundin-backed junior oil exploration company recently began producing oil in Northern Iraq  

The Atrush play in Northern Iraq (Kurdistan) is believed to hold vast oil reserves. 

A Vancouver junior oil exploration company backed by the Lundin Group of Companies says it continues to produce oil in a “safe and secure manner” in Kurdistan (Northern Iraq).

In a January 9 press release that seems aimed at calming any jitters investors might have over the dispute between the Iraqi government and Kurdistan, ShaMaran Petroleum Corp. (TSX-V:SNM) confirmed that it and its partners continue to produce 27,000 barrels of oil per day from the Atrush play north of Erbil.

ShaMaran owns 20.1% of the Atrush block, which is said to be the most underexplored region of Northern Iraq’s highly productive oil and gas fields.

The main operator is Abu Dhabi-based TAQA Atrush BV. ShaMaran is one of the companies drilling for oil in the Atrush play. Marathon Oil Corp. (NYSE:MRO) also has a 15% stake in the Atrush block.

ShaMaran and its partners began producing oil and shipping it via the Kurdistan Export Pipeline in July 2017 and started receiving its first payments from the Kurdistan Regional Government in October and November.

On December, ShaMaran issued a press release stating that TAQA Atrush BV had received US$10.7 million from the Kurdistan Regional Government (KRG), which was US$600,000 short of what had been invoiced.

“The Atrush co-venturers have been advised by the KRG that the shortfall is related to an accounting error and that payment of the (US$600,000) will be issued in the new year,” ShaMaran stated in a news release on December 19, 2017.

ShaMaran is one of a handful of junior oil exploration and development companies owned by the Lundin Group, which is headquartered in Vancouver. ShaMaran is focused exclusively on Kurdistan.

The company appears to have continued its exploration in the Atrush fields throughout the period between 2014 and 2017 when the Islamic State (ISIS) controlled large swaths of Iraq and Syria. Kurdistan was one of the few regions where ISIS never gained a significant foothold.

Despite their alliance against ISIS, the Iraqi and Kurdish governments have an ongoing dispute over the ownership of the rich oil fields of Northern Iraq and there have been recent skirmishes between the two.

Kurdistan has functioned as an autonomous state of Iraq since the 1990s. But following a referendum on independence in September, the Iraqi government has been asserting itself. It recently expelled Kurdish forces from in Kirkurk and Iraqi forces have also secured the border between Kurdistan and Turkey.

nbennett@biv.com