Reliance Industries, the country's largest private oil company, is seeking oil and gas fields in Kurdistan.
The Mukesh Ambani-controlled company is considering various options of entering the oil-rich region.
While it is in talks with the Kurdistan Regional Government for tie-ups with the region's national oil companies, it is also considering buying oil fields on its own.
"Reliance is also in talks with an Indian company to jointly explore potential oil fields in Kurdistan. A deal could be finalised in six months," a source close to the development said.
The country's largest company in terms of market capitalisation is eyeing 3-4 oil fields in Kurdistan, an autonomous, federally recognised political entity located in northern Iraq. The oil sector forms a major part of the region's economy.
Separately, a Reliance source said the company was also in talks with Oil and Natural Gas Corporation for joint exploration and production in an oil block in southern Iraq.
Sources said Reliance's move to enter the oil-rich region in partnership with ONGC, is a move to tackle steel magnate Lakshmi Mittal's increased presence in India's oil and gas business.
"Reliance does feel threatened to an extent," he said. ONGC's joint venture with Mittal Steel, ONGC-Mittal Energy, has acquired oil blocks in Nigeria. Mittal on his own also acquired 50 per cent stake in an arm of Russian oil major Lukoil earlier this week.
A sector analyst says that while Iraq is sitting on huge oil reserves, tackling the geopolitical risks will be the primary concern of oil companies investing in Iraq. "Under the ground risks are low, over the ground risks are very high," he said.
Iraq's proven oil reserves of 112 billion barrels are second only to Saudia Arabia, which has the world's largest oil reserves. In January 2005, Iraq opened its oil reserves to the world with the interim council of ministers inviting foreign oil companies to develop potential fields.
Some analysts, however, feel that risk-taking has paid off in the past, and are optimistic about Reliance's chances in Kurdistan and Iraq.
When India's largest upstream company, ONGC, had entered Sudan in 2003, that country was under US sanctions. "The Indian government still took the risk and it has paid off. There is no reason why this can't be repeated," the analyst said.
