Kurdistan Oil & Gas Development

[Anthea]

Kurdistan Is Looking To Export Its Oil Through Pipelines To Turkey By Bypassing Baghdad's Hold On Oil Exports


Kurdistan Regional Government Natural Resources Minister Hawrami speaks with Turkish Energy Minister Yildiz during a joint news conference in Arbil. Kurdistan, a relatively untapped oil and gas province, is currently locked in an ongoing battle with Baghdad over the right to export its natural resources. Reuters

Genel Energy PLC (Otcmkts:Gegyf), an Anglo-Turkish exploration and production company, said that Kurdistan will complete its own oil export pipeline that would be independent from Baghdad’s central control over oil exports, provoking tensions with the central government, UPI reported Wednesday.

Genel’s CEO Tony Hayward said that there was a lot to look forward to in terms of the oil and natural gas production in the Kurdish region of Iraq, adding that the infrastructure for an independent export pipeline from the Kurdish region should be finished by the end of 2013.

Disputes have been ongoing between Baghdad and the Kurdistan Regional Government, or KRG, which is the official ruling body of a federated region in northern Iraq, over sovereignty and exports of energy resources.

The current plan would be to export oil from two oil fields, Taq Taq and Tawke, through a pipeline to the Turkish border.

Production in the region fluctuates because of disputes with the central government. But an assessment by FACTS Global Energy and the Middle East Economic Survey suggests that crude oil production capacity in the KRG could reach about 400,000 barrels of oil a day by the end of 2013, according to the EIA.

KRG Prime Minister Nechirvan Barzani suggested that crude oil exports could rise to 1 million barrels of oil a day by 2015 and to 2 million barrels of oil a day by 2019, in a report by EIA.

http://www.ibtimes.com/kurdistan-lookin ... il-exports

[Anthea]

ARBIL/ Aswat al-Iraq: French oil company Total announced its expansion efforts to increase oil production in the Kurdish region.

The Kurdish governmental site quoted the company that is "endeavoring to excavate Sifin and Hareer oilfields with promising production levels".

A number of world oil companies are working the Kurdish region, particularly after the news of semi-completion of the transporting line to Turkey.

French Total, following Chevron and Exxon Mobil, has more than 60 oilfields all over the world.

Expected reports said that the Kurdish production will reach 2 million b/d in 2015.

http://en.aswataliraq.info/%28S%28xmthc ... &id=153951

[Anthea]

Hess, which on Tuesday reported bigger-than-expected second-quarter profit, said it was seeking partners to explore two fields in Kurdistan and a block offshore Ghana, sending its shares up 3.5 percent to a two-year high.



Hess executives made the comments in a conference call with analysts, according to a Reuters report.

Hess operates and has an 80% stake along with 20% partner Petroceltic of Ireland in the Dinarta and Shakrok blocks in the semi-autonomous region of northern Iraq.

Hess plans to spend $550 million this year for exploration work, including shoot seismic and drill exploration wells there.

It has also signed onto a production-sharing contract.

Kurdistan began exporting crude oil last July, despite the Iraq government's claim to sole authority over crude exports.

Hess is among the companies who have defied the principal Iraqi government to carry out oil business there.

The company also owns a 90% stake in the Deepwater Tano/Cape Three Points block in Ghana, one of the top 10 oil producers in sub-Saharan Africa. Ghana National Petroleum owns the remaining stake.

http://www.upstreamonline.com/live/article1333465.ece

[Aslan]

ERBIL, Kurdistan Region – Turkey’s privately-owned Genel Energy says it stands behind its oil contract with the autonomous Kurdistan Regional Government (KRG), despite political tensions between Baghdad and Erbil over the issue.
“We are very confident in the legality of our contracts. Exxon, Total, Chevron and Gazprom share our confidence in their contracts and the prospects of the KRI (Kurdistan Region of Iraq),” a Genel spokesperson told Rudaw.

The statement comes at a time when the KRG is getting ready to complete the Taq Taq-Khurmala-Fish Khabur pipeline by the end of this year, over which Baghdad has threatened military intervention.

The pipeline will allow the KRG and oil companies who have contracts with the northern region to ship crude oil to the world without having to rely on Baghdad’s centrally-controlled pipelines. The new conduit has the potential to alter the balance of power in the region.

Baghdad and Erbil are at loggerheads over the oil issue, with Baghdad claiming that oil contracts in the north are illegal and go against the framework of the Iraqi constitution, and Erbil insisting it has sovereignty over its own natural resources.

“Instability in Iraq would not benefit either the Iraqi people of the companies who operate in the region, and hence is always a key consideration for Genel. However, Kurdistan, where Genel operates has been very stable for many years,” the spokesperson said.

Genel is a small player in the oil game compared to the multinationals operating in Kurdistan. Nevertheless, it has played a role in the KRG’s active defiance of Baghdad in the oil dispute.

In January, after the KRG approved Genel to ship fuel in trucks via the Taq Taq field, the Turkish company sold 240,000 barrels of oil valued at $22 million with German firm Select Energy.

The deputy prime minister of energy affairs for the Iraqi central government, Hussain Shahristani, warned against this and said any exports from the Kurdish Region would be tantamount to “smuggling operations”.

Despite this, Genel encourages the completion of the pipeline and hopes to use it to ship an estimated 45,000 to 55,000 barrels of oil a day, generating revenues of $300 million to $400 million, according to Genel CEO Tony Hayward.

“We believe the pipeline will be a positive political benefit, allowing increased exports of oil from the Kurdistan Region of Iraq with regular stable payments that will benefit Iraq as a whole,” the Genel spokesperson said. “Revenues will be shared between Baghdad and Erbil in accordance with the Iraq Oil Law of 2007,” the spokesperson added.

[Anthea]

“Revenues will be shared between Baghdad and Erbil in accordance with the Iraq Oil Law of 2007,”

I thought that Iraq owes Kurdistan several BILLION dollars

Kurdistan would be ill advised to give Iraq any money with the current levels of unrest in the country - any money Iraq receives at this moment in time is likely to be used for the purchase of weapons - which could well be used against Kurdistan as the conflict escalates into a full-scale war

[Aslan]

Energy recruiter Earthstaff has opened an office in Erbil, the capital of Iraq’s self-governing Kurdistan region, where the number of oil rigs in operation is due to double over the next 12 months.

The company says the Kurdistan Ministry of Natural Resources has accepted its application to become a supplier to the region, which has proven oil reserves of 45bn barrels.

Contracts director John Kittle, who will be managing the firm’s Kurdistan operations, says: “We already work with a large number of the operators in the region and understand the talent required to be successful, so it was a natural progression for us to open an office and cement our position.”

Speaking to recruiter.co.uk last year, Earthstaff’s managing director Paul Flynn said that by 2015, the country was aiming to be producing millions of barrels of oil every day. He added that the market’s attractiveness was enhanced by being “on the doorstep” of other big markets such as Turkey.

Rival technical recruiter NES also sees “a great deal of growth” in Kurdistan and Northern Iraq, which it hopes to become part of, having obtained a trade licence in Abu Dhabi last month.

[Anthea]

I love reading this thread aboutKurdistan Oil & Gas Development

It is always so encouraging so positive

I love watching Kurdistan GROW

[Anthea]

Oryx Petroleum Corp., Calgary, has laid out its plans to explore and develop the Demir Dagh license in the Kurdistan Region of Iraq, where it targets 7,000-9,000 b/d of oil production to start in the second quarter of 2014.



Oryx, license operator with 65% participating and working interest, said its appraisal plan awaiting approval by the Kurdistan Regional Government calls for recompleting the Demir Dagh-2 discovery well and drilling three appraisal wells.

The three appraisal wells are expected to produce from the Cretaceous, and at least one of them will retest the Jurassic and Triassic. The drilling should further establish the field structure and the extent of hydrocarbon fill and potentially result in larger reserves and resources to be booked.

Preliminary lab results conducted by a third party have confirmed field analysis conducted during the testing of DD-2 that the crude oil in the Cretaceous has a low gas-oil ratio, low sulfur content, and low viscosity. Oil gravity is 23.1°, lighter than the 20-22° measured in field tests.

Should the 23.1° gravity be confirmed by the final results of the lab analysis, the oil in the Cretaceous, where the corporation has currently booked all of its reserves and 80% of its contingent resources, would qualify for classification as a medium crude.

The company would run extended well tests at DD-2 and the three appraisal wells to establish reservoir performance and pressure behavior.

Oryx plans to shoot 3D seismic on the Demir Dagh structure in the first half of 2014 to gain data to further refine the development plan and is in advanced stages of a tender process for the lease and installation of a 25,000-30,000 b/d early production facility.

The second and third appraisal wells would raise production to design capacity of the EPF, and Oryx is discussing options to monetize production from the EPF with the KRG. The company will ship production by truck or pipeline. The Khurmala-Faysh Khabur pipeline scheduled to be completed before the end of 2013 would pass 800 m from the DD-2 wellsite.

Following a successful appraisal program, Oryx would declare the discovery commercial, run two rigs to drill development wells, and construct a 100,000 b/d permanent production facility to start up in 2016. That facility could be expanded in modules.

Oryx plans to test two or more potential hydrocarbon-bearing zones at its Zey Gawra exploratory well on Hawler. ZEG-1 went to a total depth of 4,407 m on Aug. 5. It targets light oil potential in Lower Jurassic and Triassic and heavier oil potential in Tertiary and Cretaceous.

Oryx spudded the Ain Al Safra exploratory well on Hawler in early June. AAS-1 targets Lower Jurassic and Triassic light oil and Cretaceous heavy oil. The well is at 2,565 m enroute to 4,150 m.

The company expects to spud the Banan exploratory well in this year’s third quarter. BAN-1 targets Lower Jurassic and Triassic light oil and Cretaceous and Upper Jurassic heavy oil.

BAN-1 is 8 km from DD-2, and the two structures share a common spill point based on current interpretation of existing 2D seismic and observations of the DD-2 well. Results of the BAN-1 well could greatly affect Demir Dagh field development plans.

Oryx plans to shoot 210 line-km of 2D seismic to cover a December 2012 boundary extension to cover the extended part of the Banan structure.

Meanwhile, Oryx took a $31.1 million impairment charge in the quarter ended June 30 for the Mateen exploratory well on the Sindi Amedi license in Iraq.

A 145 line-km 2D seismic survey that began in April on the license is to be complete by mid-August. The shoot will cover the Gara East and Tawke East prospects. The data and results of wells adjacent to Sindi Amedi should facilitate informed selection of one or more targets to be drilled in 2014.

http://www.ogj.com/articles/2013/08/ory ... istan.html

[Aslan]

Iraq’s Kurdistan region is exporting crude oil by truck to an Iranian port for shipping to Asia, industry sources say, using a trade route that is likely to anger both Baghdad and Washington.

In a dispute largely over revenue sharing, Kurdistan’s crude exports through a pipeline controlled by the Iraqi central government dried up last year. However, it is transporting about 50,000 bpd of crude and condensates by road from the landlocked region through Turkey.

Now the Kurdistan Regional Government (KRG) has approved a second route for crude through Iran used previously only for petroleum products, the sources said.

For the past two months, crude has been trucked from Kurdish fields over the border to Iran’s Bandar Imam Khomeini (BIK) terminal, 900km (560 miles) to the south on the Gulf. Amounts are unclear but could be as much as 30,000 bpd, they said.

One industry source in Kurdistan said the regional government in Arbil was anxious not to put out either of the region’s powerful neighbours, Turkey and Iran, in transporting the crude. “It’s a political compromise,” said the source, who declined to be identified. “They cannot ignore the Iranians and go all the way ... with the Turks. They have to balance.”

However, it is not clear what Iran, which faces huge problems in selling its own oil products because of international sanctions, gets out of the arrangement.

Asked about the route, the Kurdish government did not comment on the record, although a KRG official source denied any crude was going through Iran yet.

Oil lies at the heart of the dispute between the Iraqi central government and the Kurdish-run northern enclave. At issue are control of oilfields, territory and crude revenues shared between the two administrations. “We have made it very clear that the only acceptable option for oil exports is through the federal pipeline network,” a senior Iraqi oil official said. “We consider any other trade, whether it be through Iran or Turkey, as smuggling. It’s illegal.”

Baghdad claims sole authority over oil exploration and export. It has already accused the Kurds in the past of smuggling crude via Iran and keeping the revenue for itself.

The KRG says its right to exploit and export the reserves under its soil is enshrined in Iraq’s federal constitution, which was drawn up following the US-led invasion of 2003, and has passed its own hydrocarbons legislation.

Arbil has already antagonised Baghdad by signing exploration and production deals on its own terms with firms including ExxonMobil, Chevron and Total, and is currently laying the final stretch of an independent export pipeline to Turkey.

Fuel oil and naphtha have moved by truck from Kurdistan through Iran for years, because Kurdish domestic sales contracts allow the sale of these products outside Iraq.

Washington, a long-standing ally of the KRG, has previously pressured Arbil to stop this trade as it tightens the sanctions imposed over Iran’s disputed nuclear programme.

“We have advised Arbil in the past not to engage in business with Iran and will continue to do so,” a US diplomat said when asked how Washington would view the KRG’s official approval for crude exports through Iran.

Amounts of Kurdistan crude being trucked through Iran are likely to be modest compared with its production capacity. This is three times its refining capacity of around 125,000 bpd, although some more oil is being refined locally in rudimentary topping plants.

Industry sources said the oil is mainly from the region’s three biggest producing fields - Taq Taq, Tawke and Khurmala.

Bjoern Dale, acting managing director of DNO which operates Tawke, said he did not know whether any crude from the field was going over the border into Iran. “We have no knowledge of any such transactions,” he said “We sell oil on the market, and once we sell, the buyer takes control and responsibility.”

Genel Energy, which is involved in both Tawke and Taq Taq, also said it sold crude at the well-head.

At Iran’s BIK terminal, the truckloads of crude are pooled in storage tanks and then pumped onto ships for export.

The tankers sail directly to Asia or to storage facilities at Fujairah in the UAE and elsewhere in the Gulf, where the crude is kept in tank farms part-owned by European companies, AIS Live ship tracking data shows and industry sources say.

At least a dozen tankers have loaded crude or fuels at BIK over the past few months and unloaded them at the Vopak Horizon terminal in Fujairah - part-owned by Dutch Royal Vopak and at VTTI Fujairah, a nearby terminal which is 50%-owned by Swiss trader Vitol, according to ship tracking data and terminal operators.

EU sanctions prohibit European companies from dealing in Iranian oil and any crude and oil products, regardless of origin, that have been exported from Iranian ports. But the joint ventures running the terminals are not incorporated in the European Union.

“If the JV company itself is not domiciled in the EU and is not a branch of an EU company, then it is unlikely to be subject to EU sanctions,” said Patrick Murphy, a legal director at Clyde & Co in Dubai who specialises in Iran sanctions.

Many ships mask their entry into Iranian ports by switching off their AIS transmitters - vanishing from the global ship positioning system as they approach BIK and reappearing days later laden and heading to Fujairah.

Shippers from BIK arrive at storage terminals waving Iraqi certificates of origin for their cargoes of crude, fuel oil or naphtha.

“We take due care to establish that no Iranian petroleum products with certificate of origin Iran are currently being stored at any facilities owned, leased or operated by the company, Vopak Horizon Fujairah Limited (VHFL) or any controlled entity,” a spokesman for the Dutch company said.

He said that four examples of ships identified by Reuters as having loaded oil at BIK and unloaded at VHFL over the last few months had presented Iraqi certificates of origin on arrival from Iran.

As for VTTI Fujairah, “the Vitol group of companies has ceased all business dealings with Iran; including the sales of refined product to Iran and all purchases of crude oil from Iran,” a spokeswoman said.

[Anthea]

Todd Kozel’s adventure in Kurdistan may soon pay off. The American chief executive officer of Gulf Keystone Petroleum Ltd. (GKP) has dealt with angry shareholders, an ex-business partner’s lawsuit and byzantine politics for six years pursuing billions of barrels of crude in the northern Iraqi region. Now, his $2.5 billion exploration venture is being called a takeover target as the world’s biggest oil companies look for untapped fields.



Kurdistan is on the verge of an oil boom. The semi-autonomous region of 5.2 million people is completing a pipeline for direct crude exports to Turkey by the end of the year, bypassing central government authorities in Baghdad. The region’s reserves are as much as 45 billion barrels, the local administration estimates, enough to meet U.S. demand for almost seven years.

“Exports are what we’ve been waiting for since 2007, so the pipeline is very big and instrumental for a company like Gulf Keystone,” Kozel, 46, said in a telephone interview. “We are a public company, and consolidation is the next phase in Kurdistan. But that’s not in our plans now.”

Gulf Keystone rose as much as 1.5 percent and traded at 181.5 pence as of 9:03 a.m. in London. The benchmark FTSE 100 index slipped 0.4 percent.

Offers could come soon because the new pipeline may boost the value of the Hamilton, Bermuda-based company by 40 percent, according to HSBC Holdings Plc. Moreover, a ruling is expected within weeks in a London lawsuit brought by a former associate claiming 30 percent of the company’s main asset, Kozel said.

Peer Comparison

Gulf Keystone’s legal dispute has held back its performance against peers this year. The shares have gained 1.6 percent, compared with advances of more than 25 percent for Genel Energy Plc (GENL), WesternZagros Resources Ltd. (WZR) and DNO International ASA. (DNO)
“Gulf Keystone screens quite well as a takeover target once the risk around the court case is removed,” said James Gardiner, an analyst at Peel Hunt in London who gives the stock a buy rating. “They’re sitting on a giant oil field that wouldn’t look out of place in a major’s portfolio.”

Pittsburgh-born Kozel formed his first oil company in 1988 when he was 21 years old. He co-founded Gulf Keystone in 2001 with help from private equity funds from the Middle East. Gulf Keystone started with licenses in North Africa, though it’s now focused on four blocks in Kurdistan and plans to exit its remaining field in Algeria.

Kozel said the company, which has spent $780 million in Kurdistan so far, will be able to fund the development of its fields with cash flow generated once production starts at an initial rate of 40,000 barrels a day this year.

Shaikan Discovery

“The Kurdistan Regional Government is very happy with our plans,” Kozel said. “We can develop Shaikan and our other fields better and possibly faster than others might.”

Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) or an Asian national oil company are candidates to snap up the company, said Dougie Youngson, an analyst at VSA Capital Ltd. in London. Gulf Keystone’s main asset, the Shaikan discovery, one of Kurdistan’s biggest ever, will produce 250,000 barrels a day by 2018, according to the company. That would increase Iraq’s total production by about 8 percent.

Other explorers in Kurdistan such as Afren Plc (AFR), DNO, Petroceltic International Plc (PCI) and WesternZagros may also become takeover targets, according to HSBC.

“There will be a wave of consolidation,” said Peter Hitchens, an analyst at HSBC in London. “All of the small players are potentially targets.”

Tax Dispute

Afren and Petroceltic declined to comment on takeover speculation. Officials at DNO and WesternZagros weren’t available for comment.

Direct exports should strengthen Kurdistan in a dispute over revenue-sharing in which it has struggled to get royalties owed from exports sent through pipelines controlled by the central government in Baghdad.

Kozel must overcome his legal difficulties before a deal is on the cards. Rex Wempen, who served in the U.S. Special Forces in the 1990s, claimed in a trial that began in October that his work led to the Shaikan find.

Last month, Kozel quelled a challenge from investors who said the company wasn’t moving fast enough to upgrade its London listing to the main market and attract more institutional investors. The board appointed four independent directors recommended by the M&G Recovery Fund, a disgruntled shareholder.

Gulf Keystone last year said it would issue 10 million new shares to give to executives if the company or its assets are bought, forcing it to say days later it wasn’t planning a sale after shares rose.

For now, Gulf Keystone says it’s focused on developing Shaikan. Achieving its targets may prove too expensive, said Peel Hunt’s Gardiner.

“Bringing a discovery of this size to meaningful levels of production will require hundreds of millions of dollars of investment,” Gardiner said. “There are a number of options available, but uncertainty remains over access to this level of capital for a company of this size.”

http://fuelfix.com/blog/2013/08/15/oil- ... ne-target/

[Aslan]

* State-backed Turkish firm operating in Iraqi Kurdistan

* Teams up with U.S. oil major Exxon Mobil to tap fields

* Large Iraq gas prospects biggest appeal to Turkey

By Humeyra Pamuk

ANKARA, Aug 15 (Reuters) - Turkey has quietly built up a large presence in Kurdistan's oil and gas industry, teaming up with U.S. major Exxon Mobil, as Ankara bets on Iraq's semi-autonomous republic to help wean it off costly Russian and Iranian energy imports.

A state-backed Turkish firm was also set up in the second quarter of 2013 to explore for oil and gas in Kurdistan, according to three sources familiar with the company.

The strategy will anger Baghdad, which claims sole authority to manage Iraqi oil, and runs counter to calls from Washington for Ankara to avoid backing projects that will help the Kurds gain further autonomy.

With a ballooning energy deficit that leaves the Turkish economy vulnerable to external shocks and a booming demand for power that is set to keep growing over the next decade, Turkey has been working to cut the costs of its oil and gas imports.

Kurdistan's huge energy potential has been hard to ignore, and Turkey's courtship of Iraq's Kurds, a strategy driven by Prime Minister Tayyip Erdogan, is beginning to pay off.

"When you have such an energy deficit and you have such a big potential on your border, you can't let Baghdad or anything else get in the way," said one of the sources familiar with the new state-backed company, a Turkish industry figure close to the deals in Kurdistan. "You have to find a formula and make sure this oil flows through your country."

The Arab-led central government in Baghdad, at odds with the Kurdish-run enclave over control of oilfields and revenue sharing, has repeatedly expressed its discontent.

It has warned that independent Kurdish efforts to export its oil could ultimately lead to the break-up of Iraq.

But neither calls from Baghdad nor Washington have been enough to deter the Turks, the Kurds or the oil companies. Exxon, Chevron and Total have already signed exploration deals with Kurdistan.

Semi state oil firm TPIC and state pipeline operator Botas have stakes in the new state-backed company, which has entered a dozen exploration blocks in Kurdistan, including several fields where Exxon is already present.

It is also negotiating a gas purchasing deal with Kurdistan, said the sources familiar with the company. Exxon Mobil declined to comment for this story.

Turkey's ambition to play a bigger role in Iraqi Kurdistan's energy prospects comes at a time when it is also negotiating a fragile peace process with Kurdish militants on its own soil to end a three-decade long bloody dispute.

Divided mostly between Iran, Turkey, Iraq and Syria, the Kurdish people are often described as the largest ethnic group without a state of their own.

LINK-UP IN TURKEY

Turkey's involvement also stretches to a new KRG pipeline that is almost complete and will allow the Kurds to export their crude from the Taq Taq oilfields straight over the border to Turkey without having to wrangle with Baghdad over payments.

The pipeline will link with the existing Kirkuk-Ceyhan pipeline on Turkish soil, rather than in Iraq, thus bypassing Baghdad, according to the latest plans.

Last year, Kurdistan stopped exporting 200,000 barrels per day (bpd) of crude through Iraq's federal pipelines due to a revenue-sharing dispute and instead started trucking smaller amounts of oil to Turkey.

The semi-autonomous region has ambitious plans to raise exports to more than 1 million bpd by the end of 2015 or over 1 percent of global supplies.

The sources say the pipeline is almost complete and will start pumping around 200,000 bpd at the end of the year. Turkey consumes around 700,000 barrels of oil daily.

GAS GAME

OPEC member Iraq's oil may have long been the focus of attention, but for Turkey, gas could have an even greater appeal.

Turkey is set to overtake Britain as Europe's third biggest power consumer in a decade. It buys natural gas from Russia, Iran and Azerbaijan and liquefied gas from Nigeria and Algeria for use mainly in power generation.

"For Turkey, securing natural gas from fields in northern Iraq, where Turkey will also be a partner, is of utmost importance. There has been big progress on this issue," said one of the three sources, a Turkish official close to the talks.

Two of them said the state-backed Turkish company was looking to finalise gas purchasing deals with KRG in the coming months.

KRG Energy Minister Ashti Hawrami said this year Kurdistan was planning to export the first gas to Turkey by 2016.

About a dozen Turkish private companies have applied to Turkey's energy watchdog EPDK to obtain a licence to import gas from Iraq. Turkey's daily gas demand stood at 125 million cubic metres in late 2012 and is likely to rise to nearly 220 million during the harsh winter months, energy ministry officials say.

"It is actually a gas game. The main reason why Turkey is taking this political risk in Iraq is because of the appealing gas resources," said the industry source.

[Anthea]

WesternZagros Resources Ltd. (TSX VENTURE:WZR) has completed the first two drill stem tests (DST #1 and DST #2) on the Kurdamir-3 well in the Kurdistan Region of Iraq. Because these tests had unexpected results, WesternZagros is providing this interim update before the testing program is complete.

The first Kurdamir-3 test, DST #1, was conducted in a non-porous zone at a depth below the deepest oil test conducted in the Oligocene at the Kurdamir-2 well. After acidizing, this test flowed oil and spent acid at non-commercial rates. The deepest oil now encountered in the Oligocene is 2,788 metres. DST #2 was then conducted over four low-permeability intervals further up-hole, also at depths below the deepest oil test in Kurdamir-2 and flowed a mix of light crude oil and water at low rates after acidizing. DST #2 gave the first evidence of formation water the Company has seen in the Oligocene reservoir at Kurdamir. While it appears that the well has reached a transition zone or an oil-water contact at approximately the same depth as the previous lowest known oil from the Kurdamir-2 well, the results are difficult to interpret. Two more tests are planned for the upper porous zone of the reservoir - at depths that were oil-bearing in the Kurdamir-2 well. Testing will now extend to late September or October.

Simon Hatfield, Chief Executive Officer, of WesternZagros commented:

"Large oilfields like Kurdamir will often present some anomalies in the early stages of delineation, and this one is proving no exception. We were surprised by the water cut in DST #2 because we had seen evidence during drilling of oil throughout the interval. There are also unusual aspects to the position of the water across the four tested intervals in DST #2, so we are not yet certain whether we have found an oil-water contact that will be consistent across the reservoir, or a restricted compartment, sometimes known as perched water, within the oil reservoir. The next two tests of the shallower porous interval should provide a more indicative view on the oil deliverability of the reservoir. While these first two test results are not the best case scenario, we still have a large oil discovery with more work yet to be done to assess it fully."

KURDAMIR-3 INTERIM TEST RESULTS

As operator of the Kurdamir-3 well, Talisman (Block K44) B.V. has conducted two DSTs in the deepest zones of the Oligocene reservoir at Kurdamir-3 and now plans to move up-hole to conduct two additional drill stem tests.

DST #1 and #2 were conducted in the lower part of the Oligocene reservoir which exhibited poorer reservoir characteristics (including fewer fractures) than the main porous zone tested in Kurdamir-2. Both tests were conducted at depths below the base of DST #6 in the Kurdamir-2 well which produced light oil at 3,450 barrels per day and 8.8 mmcf/d of natural gas. DST #3 and #4 will now be conducted in the upper part of the porous zone of the Oligocene which was oil-bearing in Kurdamir-2 and which is more than 87 meters below the depths of the gas-oil contact as seen in Kurdamir-2.

DST #1 was conducted over a perforated interval of 12 metres, between 2,776 and 2,788 metres, across a fracture zone below the base of the reservoir with the objective of proving new lowest known oil. After acidizing the interval, the zone produced a limited amount of oil and spent acid.

DST #2 was conducted over four perforated intervals within a gross interval of 105 metres from 2,614 to 2,719 metres. After acidizing the zones, the well produced 38-degree API oil at low rates with an average water cut of 65 per cent.

The Company is evaluating the test results. Preliminary interpretation indicates that DST #2 may have spanned an oil-water contact or encountered a transition zone. However, due to the oil produced in DST #1, the Company is also evaluating whether this water zone may be restricted in extent due to compartmentalization of the reservoir. The alternative interpretations of an oil-water contact or restricted water zone ("perched water") are shown. Additional test data and the interpretation of the 3D seismic recently acquired over Kurdamir will assist in this evaluation. Regardless of the foregoing, the interim test results from Kurdamir-3 have increased the risk associated with the undiscovered Prospective Resource assessment that the Company carries for the Kurdamir Oligocene reservoir.

BARAM-1 WELL

The Baram-1 well, on the north portion of the Garmian Block, was spudded on August 13, 2013 and has drilled ahead to the first casing depth at 816 metres. The Company expects to reach planned total depth of 3,800 metres by the end of 2013. This well is exploring whether the Baram structure is a separate structure from Kurdamir or a potential extension of the oil leg discovered in the Oligocene reservoir of the Kurdamir structure onto the northern portion of the Garmian Block. If the extension is confirmed, the Company believes that this could be the highest impact well of the 2013 drilling program, with the potential to add substantial contingent resources in both the Garmian Block and in the Kurdamir Block. In this case, the interim results of Kurdamir-3 testing increase the risk associated with the undiscovered Prospective Resource assessment for the Baram-1 well. Alternatively, the Baram structure may be separated from the Kurdamir structure by a fault, in which case the Kurdamir-3 well results have no material impact on the chance of success of Baram-1.

http://www.oilvoice.com/n/WesternZagros ... 4a80a.aspx

[Anthea]

ShaMaran Petroleum Corp. (TSX VENTURESNM)(OMX:SNM) report the results of the Atrush-3 appraisal well ("AT-3") drilled in the Kurdistan Region of Iraq.

The AT-3 well was spudded on 23rd March 2013 using the DQE31 drilling rig and was drilled to a total depth of 1,806m. The well is situated approximately 6.5km east of the AT-2 well and approximately 9.6km east of the AT-1 discovery well.

AT-3 was specifically designed as a stepout to the east of the existing wells and to reduce the uncertainty on the depth and nature of the Oil Water Contact ("OWC") / Free Water Level ("FWL") in the "BSAM" reservoir (the Jurassic Barsarin-Sargelu-Alan-Mus formations). The well matched the pre-drill expectations by finding the main target "BSAM" reservoir entirely oil-bearing and the Jurassic Butmah reservoir in the water leg. The Atrush field is undergoing an appraisal drilling program providing valuable information such as oil/water contact definition, oil gravity/viscosity variations, extent of quality reservoir, permeability and porosity data, etc. All this data is important information for development planning purposes and for future resource updates.

A successful coring campaign was completed on AT-3 recovering seven cores totalling more than 72 metres from the "BSAM" section. Three drill stem tests ("DST") were conducted with the results confirming the extension of the field area 6.5 km to the east.

DST1 was conducted as a short test over an 18m interval in the uppermost porosity section of the Butmah formation. Using an ESP the well was produced at approximately 1500 barrels of water per day with reported viscous oil cut of 1%-6%. The test indicates that the tested interval is in close proximity to the deepest calculated FWL from the AT-1 and AT-2 wells.
DST2 commenced on 29th July and was conducted over a 30m interval across the Lower Alan & Mus formations within the "BSAM" reservoir. The test produced up to 1500 barrels of oil per day (surface oil measurements ranged between 10° & 17° API) with no water.
DST3 was performed over an 18m interval of the Sargelu formation. The well was produced at rates up to 600 bopd (surface oil measurements ranged between 12° & 14° API).

All rates are rough estimates only due to an inability (for technical reasons) to route fluids through the test separator. Bottomhole samples from the DSTs will undergo PVT analysis over the coming weeks. AT-3 has been suspended as a potential future producer.

Other activity includes work on the Atrush Block Field Development Plan ("FDP") which culminated with its submission for approval to the KRG on May 6, 2013, in accordance with the terms of the PSC. The FDP was presented in detail to the Ministry of Natural Resources ("MNR") in June 2013 and discussions are progressing with the MNR towards obtaining necessary approval for the plan.

In June 2013, a successful interference test was successfully completed between AT-1 and AT-2 which has provided valuable reservoir information. The wells, which are 3.1km apart, confirmed pressure communication and multi Darcy horizontal permeability through the fracture system in the BSAM reservoir.

ShaMaran President and CEO Pradeep Kabra commented, "The results of the AT-3 well are important for the future development of the Atrush Field. Our objective is to put the field into production as early as possible to take advantage of the improving political and economic conditions in the region. We look forward to the results of the Atrush-4 well (targeting the undrilled updip area of the field) which is due to spud in the next few weeks"

The Atrush Block is operated by TAQA Atrush B.V., a subsidiary of Abu Dhabi National Energy Company PJSC which holds a 39.9% working interest in the Block. ShaMaran Petroleum Corp. holds a 20.1% working interest through its wholly owned subsidiary, ShaMaran Ventures BV (100% owner of General Exploration Partners, Inc.). Marathon Oil KDV B.V., a wholly owned subsidiary of Marathon Oil Corporation (NYSE: MRO), holds a 15% interest in the block. Subsequent to their back-in the Government of the Kurdistan Region of Iraq holds a 25% working interest.

http://www.oilvoice.com/n/Atrush3_well_ ... 2dcde.aspx

[Anthea]

With China already sucking up more than half of the oil production coming from Iraq, the Kurds may be next in the Chinese energy cross hairs. The Chinese begun to sink their teeth into the Kurdish Region’s vast oil potential in 2009 when Sinopec acquired Addax Petroleum, which holds a joint agreement with Genel Energy to develop the Taq Taq oil field.



To date, a total of 16 development and appraisal wells have been drilled in the Kurdistan Region of Iraq, according to a report from The Oil & Gas Year Review for Kurdistan in 2013.

“Sinopec is China’s largest oil company and has immense capacity to support the development of the downstream sector, both in Kurdistan and the rest of Iraq,” Yi Zhang, the chief executive officer of Addax Petroleum, said in the report.

Recently, a Chinese delegation visited Rasheed Tahir, the Kurdistan Regional Government’s (KRG) minister of finance and economy, to discuss the investment potential for numerous sectors, including oil.

Michael Howard, the adviser for the minister of natural resources, said currently he is unaware of any further Chinese involvement in Kurdish oil outside Sinopec.

“The region has a lot of economic potential and we have a lot of investors from a lot of different countries. Having said that, they may well be talking to individual oil companies we wouldn’t necessarily be aware of,” he said.

The Chinese Embassy in Baghdad did not respond to inquiries about increased vested interest in Kurdistan’s oil market.

But it is clear that China is looking to Kurdistan to diversify its oil resources through Addax Petroleum, a subsidiary of Chinese state-owned Sinopec.

“We hope there will be opportunities for Addax Petroleum and our shareholders, Sinopec, to consolidate with other operators in the Kurdistan Region of Iraq, to farm into blocks or to obtain equity positions through mergers and acquisitions activities,” Zhang said in the report.

“China is now making aggressive moves to expand its role, as Iraq is increasingly at odds with oil companies that have cut separate deals with Iraq’s semiautonomous Kurdish region,” The New York Times wrote recently.

The Kurds offer more generous terms than the central government, but Iraq and the United States consider such deals illegal, it noted.

It explained that the Chinese were able to undercut a majority of Western oil companies in the south of Iraq following the US.-led invasion in 2003, because the goal of their state-owned oil companies is simply to procure more fuel for China’s growing economy, not profit.

http://rudaw.net/english/kurdistan/2907 ... dish%20oil

[Anthea]

Genel Energy plc announce that a Declaration of Commerciality ("DoC") for the Miran field has been approved by the Ministry of Natural Resources of the Kurdistan Regional Government ("KRG"). Genel currently holds a 100% working interest and is operator of the Miran licence. The KRG has the right to back in for a 25% working interest following DoC.

The Miran field was discovered in 2009 and an assessment by RPS Energy has assigned gross mean contingent resources of 3.5Tcf of gas/95mmbbls of oil and condensate to the Miran West structure. Further upside remains in the Miran East and Miran Deep prospects, with an exploration well planned on the latter in 2014. In total, Genel estimates that the Miran block contains c.8Tcf of gross recoverable contingent and unrisked prospective resources.

Following Declaration of Commerciality, the Development Period will commence on 5 September 2013, after which the Contractor will receive its share of revenues according to the PSC. An Early Production Facility for Miran oil was commissioned in August 2013 with the first well brought on-stream at c.2,000bopd. Work continues with the KRG to establish a Gas Commercialisation Plan, while Genel continues to expect the signing of a final Gas Export Agreement to Turkey by end-2013.

Commenting today, Charles Proctor, Head of Business Development for Genel, said:

"The Miran Declaration of Commerciality represents an important milestone in the development of this major resource. We now look forward to continuing our work with the KRG to implement the Gas Commercialisation Plan and progress Miran towards project sanction. Our KRI gas business has the potential to supply a significant portion of Turkish demand growth, as well as having a transformational impact on Genel as our material resource base transitions closer to reserves."

http://www.oilvoice.com/n/Genel_Energy_ ... 30342.aspx