A scramble for Kurdish oil licences is expected this summer after Ashti Hawrami, the oil minister for Iraq’s Kurdish region, said yesterday that he wants to achieve a production goal of one million barrels a day by 2012.

The Kurdish move signals that Iraq is poised to open its doors to foreign oil investment.

In London yesterday, Dr Hawrami said that the Kurdish region aimed to be the “hub” for Iraq’s future oil industry and would look to sign up to ten exploration contracts by the end of the year.

“I have six or seven contracts on my desk,” he said. “We will listen to any company as long as they have the technical and financial capabilities to do the job. We are not interested in names simply because they sound good.”

Kurdish oil is a first step to developing Iraq’s vast potential. Foreign investors have so far shied away, fearing that investment in the Kurdish region will threaten their chances of winning bigger contracts in the south. Iraq produces only two million barrels a day from ageing reservoirs but has reserves estimated at 110 billion barrels — about three times the oil and gas extracted from the North Sea to date.

Kurdish oil production is negligible but the approval of a countrywide petroleum law, which gives the region the right to negotiate its own contracts, is expected to set off an oil rush.

Wood Mackenzie, the oil consultancy, estimates that the Kurdish region contains between 12 billion and 45 billion barrels of oil and 100 trillion cubic feet of gas. “If this reluctance [of the oil majors] continues, it is likely to be a handful of independents who become the first international oil producers in the new Iraq,” it said.

BG Group and Statoil are among several Western and Chinese majors in talks with the Kurdish authorities. Others include smaller rivals such as UK-listed Sterling Energy.

Paul Mullarkey, BG’s chief business developer, said: “We are considering our position, as we do with any region around the world. But it’s far too early to say how the situation will progress.”

Five minnows are already operating in the Kurdish region, including Turkey’s Genel Enerji and Norway’s DNO. Shares in DNO raced ahead yesterday on reports that Statoil is eyeing its Tawke field in the region, which is poised for production.

DNO has almost completed a pipeline that will link with the northern Iraqi export route from the Kirkuk field via Turkey. Statoil denied it was poised to bid but admitted it was “evaluating opportunities”.

The Kurdish authorities’ ambition has been frustrated by political infighting with Baghdad, which has until recently resisted the Kurdish region’s wish to run its own oil industry.

Under the petroleum law, a 15-strong federal council would have the ultimate approval of all contracts across the Kurdish north and areas run by the Sunni and Shia Muslims. Dr Hawrami said that he was confident that the law would be passed by parliament by the end of May.

He reiterated that the Kurds fully supported plans to share revenue from all Iraq’s oil and gas fields across the various communities. He said that it was the only way to achieve a stable and peaceful Iraq.

Times Recommends

• Food prices rise 8.3% on soaring fish and meat
• Car sales crash as economy hits skids
• House prices fall but Bank leaves rates on hold