UPDATE 3-Drone attack halts oil output at Sarsang field in Iraqi Kurdistan

A drone attack halted production at the Sarsang oilfield in Iraq's Kurdistan region on Tuesday only hours before its U.S. operator signed a deal to develop another field. The Sarsang field is operated by HKN Energy, a privately held U.S. oil and gas company active in Iraq's Kurdistan region and owned by Hillwood Energy, part of the Hillwood group founded by Ross Perot Jr.

Two hours after the morning attack, HKN Vice President Matthew Zais was in Baghdad with Oil Minister Hayan Abdel-Ghani to sign a preliminary agreement to develop the Himreen oilfield in northern Iraq, the oil ministry said. The signing ceremony was also attended by U.S. Ambassador Steven Fagin, whose embassy condemned the drone attacks on oil infrastructure in the Kurdistan region and urged the Iraqi government to investigate and hold those responsible accountable.

Washington said such attacks undermine Iraq's sovereignty and efforts to attract foreign investment. Production at the Sarsang field was halted as a precautionary measure after an explosion, two engineers told Reuters.

Kurdistan regional authorities confirmed that the blast was from a drone attack. No group has claimed responsibility for the attack, but Iraqi Kurdistan security sources said that initial investigations suggested that the drone came from areas under the control of Iran-backed militias.

Heavy plumes of smoke were seen rising from the Sarsang field in the Dohuk region of northern Iraq, said one oil engineer at the field. Field operator HKN said that the halt to production was to allow firefighters to extinguish the fire, later adding that emergency response teams contained the damage.

There were no casualties, Iraqi Kurdistan's ministry of natural resources and HKN said. The incident is under investigation and a full assessment of the damage has been initiated, the company said without providing further detail on the cause of the explosion.

On Monday two drones fell on the Khurmala oilfield near Erbil in Iraqi Kurdistan, damaging the water pipes at the field.

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