(Bloomberg) -- Chevron Corp. plans to resume drilling in Iraq's Kurdistan as tensions between the semi-autonomous region and the federal government abate.
The U.S. oil major plans to drill the Sarta 3 well north of Erbil, Chevron said in a statement Tuesday. It temporarily halted exploration work in October amid the stand-off between the the Kurdistan Regional Government and Baghdad.
Oil operations were disrupted in northern Iraq after the Kurds voted in favor of independence in September. The move infuriated the federal government in Baghdad, which dispatched forces to retake the Kirkuk oilfield, which lies outside the KRG-run enclave, from Kurdish control. Though the future of the region remains uncertain and only some of the disrupted crude shipments have been restored, the situation hasn't escalated further, opening the way for Chevron's return.
The challenges for oil companies to operate in the region haven't gone away completely as “logistics are now more difficult” because of the disruption to flights, Robin Mills, Chief Executive Officer of consultant Qamar Energy said. Some producers like DNO ASA and Genel Energy Plc never left Kurdistan even at the height of tensions. Chevron doesn't produce any oil in Kurdistan.
“We are taking all necessary steps to re-mobilize people and equipment to ensure we are well prepared to resume operations,” according to the Chevron statement.
The world's third-biggest oil company has a 80 percent stake each in the Sarta and Qara Dagh blocks.
MEED first reported Chevron's resumption of operations in Iraq's Kurdistan.
--With assistance from Julian Lee
To contact the reporter on this story: Angelina Rascouet in London at arascouet1@bloomberg.net.
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Rakteem Katakey
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