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MOL says more time needed to determine profitability of jointly owned Iraq oil block

Hungarian oil and natural gas company MOL says it is too early to tell whether the Shaikan Block in the Kurdistan region of Iraq, which it owns jointly with UK-listed oil and gas exploration and production company Gulf Keystone Petroleum, contains a sufficient amount of oil to make commercial extraction at the site profitable, the business daily Napi Gazdaság reported.

Gulf Keystone Petroleum reported in August and October that the Shaikan Block contains an estimated 0.5 billion-3 billion barrels of oil.

ING oil-industry analyst Tamas Pletser told the newspaper that MOL should be able to conduct its own appraisal of the amount of oil at the Shaikan Block later this year or early in 2010, following the completion of test drilling at the site. Pletser added that if MOL's estimate of the amount of oil available at the block corresponds to that of Gulf Keystone Petroleum, it would provide the company's share value with a significant boost.

Gulf Keystone, which operates and owns 80% of the Shaikan Block, while MOL owns the remaining 20%, has posted a tenfold increase in share value since announcing its estimate of the amount of oil at the block this summer.

The companies will complete test drilling at their other jointly owned field in the Kurdistan region of Iraq, the Akri-Bijeel Block, next year.

MOL owns 80% and holds operating rights of the Akri-Bijeel Block, while Gulf Keystone owns 20%. (MTI – Econews)