August 20, 2012 / 2:06 PM / 7 years ago

Total signs new Kurdish deal, shrugs off Baghdad threats

The logo of French oil company Total is seen during the company's 2011 annual result presentation in Paris February 10, 2012. REUTERS/Jacky Naegelen

PARIS (Reuters) - French oil major Total (TOTF.PA) has bought a minority share in an exploration block in Iraq’s semi-autonomous Kurdistan region, ignoring threats from the central government in Baghdad made after a similar deal last month.

Total followed U.S. oil majors Exxon (XOM.N) and Chevron (CVX.N) last month in disregarding Baghdad’s warnings about possible punitive action and signing contracts with the country’s Kurdistan region directly.

Canada’s ShaMaran Petroleum Corp (SNM.V) said on Monday a unit of the French company had paid $48 million for a 20 percent stake in the Taza exploration block in the Kurdish province of Suleimaniya in northern Iraq.

The exploration well is operated by Papua New Guinea’s Oil Search (OSH.AX), which has 60 percent of the contract. The Kurdish Regional Government (KRG), based in Erbil, owns the remaining 20 percent, ShaMaran said in a statement.

In July, the French major bought a 35 percent stake in the Harir and Safen exploration blocks in Kurdistan, where crude reserves are plentiful and contract terms more attractive than in the southern part of the country.

The move drew an angry response from Iraqi authorities, who warned Total, which has an 18.75 percent stake in the Halfaya oilfield in the southern Missan province, that it would be forced to sell it if it did not cancel or freeze deals with Kurdistan.

The petroleum deals are worsening already tense ties between Baghdad and Iraqi Kurdistan, autonomous since 1991, in their long-running dispute over land and oil rights.

Total could not immediately respond to a request for comment.

Reporting by Michel Rose; editing by James Jukwey

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