Kurdistan Oil & Gas Development

[Anthea]

KRG Responds Maliki's Statements on NRT TV

ERBIL, Kurdistan Region: Following yesterday's Statements of Nouri Al-Maliki, Iraqi Prime Minister in an interview with NRT TV, KRG's spokesman, Safin Dzayee, announces that Maliki's statements and information on KRG are inaccurate and his attention is for misleading the public opinion.

The announcement reveals that Maliki mentioned an oil question in the interview which is still a subject of the Erbil-Baghdad negotiations, and Maliki's statements are not what the committees and Hussain al-Shahristani is agreed on.

"Shahristani, in the meetings, was with idea of putting KRG's oil revenue in a sub-account in a special bank of DFI in the name of KRG," mentions in the announcement.

On the KRG's stance on the oil export issue in Baghdad, Safin Dzayee mentions that in all the negotiations the KRG insisted on that the region should export its oil on a constitutional base and if the revenue was the same with region's share then it should be put in the same bank which saves the Iraqi oil revenue. Then, the bank will directly transfer the money to the central bank of Kurdistan Region.

On Maliki's intention in his statements, Dzayee says that the statements are part of the wrong way of his dealing with politics and the situations to mislead the people and stating wrong numbers and data if not the KRG does not need to have hidden oil pipeline as Maliki says, while KRG can have it officially.

"Maliki in the interview compared Kurdistan region with a province, Basra," Dzayee talking on that Maliki's is not going back to the constitution he vowed for.

Dzayee concluded the announcement by saying that Maliki has named his political list for the election " State of Law" but his actions are all against the laws and constitutional bases as well as neglecting other political entities and destroying the principles of democracy, federalism, and sharing that the new Iraq were build on.

http://www.pukmedia.com/EN/EN_Direje.aspx?Jimare=19178

[Anthea]

Kurdish oil compromise would make everyone a winner



A resolution to the current legal impasse over Kurdistan’s crude exports via Turkey would be a win-win-win, according to City broker UBS.

In a note entitled “A future so close you can almost touch it” the blue-chip broker says that Kurdistan, Iraq and Turkey all stand to gain from a comprise export agreement, which press reports claim is now “close”.

UBS highlights the reports that there is now almost a compromise in place over key issues such as joint marketing, revenue sharing and national budgets.

This progress has been helped by the completion of the crude pipeline infrastructure and American support, ahead of April elections, as these events have “brought Erbil and Baghdad” back to the table.

The pipeline is operable, and it is believed that around 700,000 barrels of crude produced in Kurdistan is already stockpiled in storage in Turkey awaiting sale and shipment.

“We estimate the pipeline will generate $8-9bn per annum of state revenues and so expect economic and political pragmatism will bring the parties to an agreement,” said UBS analyst Daniel Ekstein.

“Importing oil and gas from Kurdistan is also an economic no-brainer for Turkey, reducing its energy import bill by about $3bn per annum.”

According to Ekstein, Genel is well placed once exports formally begin as it has 1.68bn oil equivalent barrels of resources, which will have a low cost to develop.

“Initial horizontal well rates (Tawke) have been stellar (about 30,000bbl/d) and technology provides upside to existing reserve estimates.

“It is already debt free and should become materially cash flow positive from 2015.”

“We believe Genel could be a natural candidate for industry consolidation. There are also two high impact exploration wells drilling in 1H14 – Morocco (Cap Juby) and Malta (Haqar Qim) – in our view either could add a material new leg to the investment case.”

Ekstein’s research note followed Genel’s somewhat low-key, though positive, financial results last week.

UBS was not the only City broker running the rule over the London listed E&P.

Deutsche Bank’s Lucas Hermann said the results statement revealed solid financials and outlook, and that Genel’s resource base was now materially ahead of some of its larger peers.

Elsewhere, Goldman Sachs’ Henry Morris maintained a positive view on Genel’s assets in Kurdistan, and said an export deal would “not only drive a significant near-term ramp-up in production and cash flow, but also remove a key hurdle for future accretive asset disposals, which we see as the next key driver of Genel’s valuation.”

That said, Morris claimed there was still a risk that an export deal may not be done soon enough for Genel’s forecasts and that, due to good recent performance, this wasn’t sufficiently discounted into the current share price. For that reason, the Goldman analyst said he could not justify a ‘buy’ rating and instead sees the stock as ‘neutral’.

http://www.proactiveinvestors.co.uk/com ... 66529.html

[Anthea]

Oryx Petroleum announces successful results of BAN-1 exploration well in Kurdistan

The KS Discoverer 1 rig spudded the BAN-1 well, the Corporation's fourth exploration well in the Hawler license area, targeting the Banan prospect, in mid-September 2013 and reached total depth of 4,000 metres in the Kurra Chine formation. Oryx Petroleum successfully flowed oil in two of six cased-hole drill stem tests ("DSTs") in BAN-1.

Oryx Petroleum Corporation Limited announces that the successful testing of the BAN-1 exploration well has confirmed the Corporation's fourth consecutive oil discovery in the Hawler license area in the Kurdistan Region of Iraq. Oryx Petroleum is the operator and has a 65% participating and working interest in the Hawler license area.

Commenting today, Henry Legarre, Oryx Petroleum's Chief Operating Officer, stated:

"We are very pleased with the drilling and test results of the BAN-1 exploration well. We successfully flowed oil from the well's primary targets in the Cretaceous and Lower Jurassic reservoirs. In addition, we encountered and flowed hydrocarbons to the surface in the Triassic Kurra Chine formation and established the presence of hydrocarbons in the Tertiary Pila Spi formation. Given the down-dip location of the well, these results underline the significant potential that exists up-dip of the BAN-1 well. We are now accelerating plans to drill an appraisal well targeting the crest of the Banan structure in order to better understand the full potential of this discovery."

Banan Exploration Well

The KS Discoverer 1 rig spudded the BAN-1 well, the Corporation's fourth exploration well in the Hawler license area, targeting the Banan prospect, in mid-September 2013 and reached total depth of 4,000 metres in the Kurra Chine formation. The BAN-1 well targeted oil potential in the Cretaceous, Upper and Lower Jurassic and the Triassic. Due to challenging control conditions experienced in the Triassic, where the well encountered and flowed hydrocarbons to surface, BAN-1 was plugged back to 3,400 metres in preparation for testing operations in the shallower Cretaceous and Jurassic formations.

The BAN-1 well was located down-dip of the crest of the Banan structure because the crest was outside the Hawler license area boundaries at the time of BAN-1 planning. The Corporation agreed to a boundary extension with the Kurdistan Regional Government in late 2012. 2D seismic data acquired in late 2013 covering the boundary extension area identified more clearly the likely crest of the Banan structure indicating that such crest is up-dip of the BAN-1 well.

Logging data, core analysis and observations during drilling in the Upper Cretaceous (Shiranish, Kometan and Upper Qamchuqa formations) confirmed the presence of hydrocarbons and similar matrix porosity as observed at Demir Dagh. Logging data and observations during drilling, including free oil on the shakers and cuttings, also confirmed the presence of hydrocarbons in the Tertiary (Pila Spi formation), Upper Jurassic (Najmah formation) and Lower Jurassic (Mus and Base Alan, Adaiyah, and Butmah formations).

Testing Program Results

Oryx Petroleum successfully flowed oil in two of six cased-hole drill stem tests ("DSTs") in BAN-1.

DST#1 conducted over a 106 metre interval in the Butmah formation in the Lower Jurassic successfully flowed naturally over a period of three days using a series of different choke sizes. The sustained flow rate achieved was 3,500 bbl/d of light oil for a 23 hour period using a 128/64" choke. No pressure decline was observed during the test. The crude oil from the Butmah formation was measured on site between 27° and 30° API gravity. Small quantities of natural gas and hydrogen sulfide were encountered.

The DST#6 conducted over a 123 metre interval in the Shiranish and Top Kometan formations in the Upper Cretaceous successfully flowed over a period of 42 hours using a series of different choke sizes. The sustained flow rate achieved was 820 bbl/d of oil for a 12 hour period using a 128/64" choke under natural flow. No pressure decline was observed during the test. The crude oil from the Shiranish and Top Kometan formations was measured on site between 15° and 21° API gravity. Small quantities of natural gas and hydrogen sulfide were encountered. The Corporation believes higher flow rates could be achieved using appropriate artificial lift.

The four other DSTs were conducted separately in the Middle Cretaceous (Kometan formation), Upper Jurassic (Najmah formation) and Lower Jurassic (Mus and Base Alan, and Adayiah formations). Logging results of each formation indicated the presence of hydrocarbons and a fracture network. During the tests small quantities of oil were produced from the Lower Alan and Mus formations, as well as 1,000 and 2,000 bbl/d of water. The Corporation believes the presence of water was due to the down-dip location of BAN-1. Importantly, the test results show the development of reservoirs that will be further appraised and tested by the planned BAN-2 well which will be located in a more crestal position.

All field fluid measurements will require laboratory analysis to confirm results and should be considered preliminary until such analysis has been done. The above test results are not necessarily indicative of long-term performance or of ultimate recovery.

NSAI Resources Estimates as of December 31, 2013

Prior to the start of the testing campaign, Netherland, Sewell & Associates, Inc. ("NSAI") estimated as of December 31, 2013 that the Banan discovery contains low, best and high estimates unrisked gross (100%) contingent oil resources of 5, 40 and 440 MMbbl, respectively, all in the Cretaceous formations, and best estimate unrisked gross (100%) prospective oil resources of 235 MMbbl (risked: 46 MMbbl) in the Tertiary Pila Spi formation, the Jurassic Alan, Mus, Adaiyah and Butmah formations, and the Triassic Kurra Chine formation. See "Reserves and Resources Advisory" below for additional information regarding these estimates.

Accelerated Appraisal Plan

Given the successful drilling and testing results of the BAN-1 well, the Corporation is accelerating its plans to drill an appraisal well targeting a more crestal location of the Banan structure. The Corporation believes significant up-dip potential exists in all formations. The up-dip potential in the Cretaceous formation is underscored by NSAI's high estimate of contingent resources for Banan. The Corporation expects to spud BAN-2 in mid-2014.

http://www.oilvoice.com/n/Oryx_Petroleu ... 360bb.aspx

[Anthea]

Gulf Keystone Falls Most in Two Years on Kurdish Downgrade

Gulf Keystone Petroleum Ltd. (GKP) fell the most in two years in London trading after the oil producer said its Kurdistan field is smaller than previously estimated.

Total oil in place at the Shaikan field is estimated at 9.2 billion barrels, the company said, after commissioning a so-called competent persons report from ERC Equipoise Ltd. That compares with an earlier estimate of 13.7 billion barrels.

The stock plummeted 16 percent to 120.25 pence, the biggest drop since March 2012, valuing the company at 1.1 billion pounds ($1.8 billion). Volumes traded were nine times the three-month daily average.

“The market is disappointed at the revised oil-in-place figure for Shaikan, which is 30 percent lower than the previous estimate,” said Charlie Sharp, an analyst at Canaccord Genuity Securities Ltd. in London. “The reserves and resources numbers are also substantially lower.”

Gulf Keystone is targeting production from the Shaikan field, its main asset, of 100,000 barrels of oil a day, the Bermuda-based company said. That’s lower than its previous forecast of 150,000 barrels within three years.

Kurdistan, a semi-autonomous region in northern Iraq where the economy has boomed with oil exploration since the fall of Saddam Hussein in 2003, estimates its reserves at 45 billion barrels, enough to meet U.S. needs for almost seven years.

A new pipeline to Turkey provides unhindered access to international markets for the first time after years of disputes with the government in Baghdad over export revenue.

Gulf Keystone, planning to move to London’s main stock exchange this month, is “making progress” in talks on funding the next stage of Shaikan, which will see an additional 60,000 barrels of oil pumped, taking it to its medium-term target of 100,000 barrels, it said today in a separate statement.

The company had to face angry shareholders and a lawsuit by an ex-soldier claiming 30 percent of its main asset, as well as being a possible takeover target last year.

http://www.bloomberg.com/news/2014-03-1 ... grade.html

[Anthea]

WesternZagros converting successful Kurdistan Region discoveries into light oil production

The Sarqala-1 well, which produced up to 5,000 bbls/d during a nine-month extended well test in 2011-12, already has production facilities in place.

As part of transitioning to development, WesternZagros, its co-venturer, Gazprom Neft, and the KRG have agreed to end exploration activities on the Garmian Block following the completion of the Hasira-1 well.

Following approval of its declaration of commerciality by the Kurdistan Regional Government (KRG), WesternZagros Resources Ltd. (TSX VENTURE:WZR) (WesternZagros or the Company) is moving to develop the first of its two significant light oil discoveries. Once its development plan for the Sarqala field is approved, the Company expects to produce up to 10,000 barrels per day (bbls/d) of light, sweet oil in the second half of 2014.

"After 10 years of rewarding exploration in the Kurdistan Region, WesternZagros is turning its discoveries into production that is destined for the domestic market and potentially the Kurdistan Region's export markets via the new pipeline," said Simon Hatfield, Chief Executive Officer of WesternZagros. "This monumental step marks a new era in our Company history that was recently defined by the KRG's approval of our declaration of commerciality on the Sarqala Discovery."

"We are focused on promptly generating productive value from the Sarqala field for our shareholders and the people of the Kurdistan Region, and undertaking development planning for our giant Kurdamir Discovery, which contains mean contingent resources of almost a billion barrels of oil equivalent," Hatfield said.

Moving to production and cash flow

The Sarqala-1 well, which produced up to 5,000 bbls/d during a nine-month extended well test in 2011-12, already has production facilities in place. WesternZagros is completing a workover on this well that is expected to take production capacity up to 10,000 bbls/d. Additional development wells at Sarqala, including the Hasira-1 well currently being tested, are expected to deliver additional volumes through planned expansions to initial production facilities that have a design capacity of up to 35,000 bbls/d. WesternZagros will submit a Garmian Block development plan, outlining future development wells, production facilities and support infrastructure, to the KRG by June 21, 2014. Independent reserves evaluators have audited estimates that, as at February 8, 2013, the Sarqala Discovery contained gross unrisked mean estimates of 463 million barrels of oil equivalent in prospective resources and 24 million barrels of oil in contingent resources. Future expansion phases will be determined by the success of a forthcoming development drilling campaign to delineate the prospective resources.

On the neighbouring giant Kurdamir Discovery, development planning to bring this find into production is a longer-term initiative that requires extensive geological and operational evaluation, as well as engineering and financial planning. Three Kurdamir exploration wells have defined an oil and natural gas-charged structure that contains gross unrisked mean estimates of 541 million barrels of oil in contingent resources, and a further 1.3 billion barrels of oil in prospective resources. WesternZagros expects to file a declaration of commerciality for the Kurdamir Discovery within the next 12 months.

"As we move to this development phase, WesternZagros is focused on optimizing and monetizing the value of its discoveries through a variety of means, which includes working with our partners and the KRG to generate near-term production from Sarqala, as well as exploring the greatest value creation opportunities available from our suite of resources," Hatfield said.

Transition to development

As part of transitioning to development, WesternZagros, its co-venturer, Gazprom Neft, and the KRG have agreed to end exploration activities on the Garmian Block following the completion of the Hasira-1 well. As such, the Company has no further exploration expenditure obligations and will now be able to apply its focus and financial resources on development. Under the agreement with the KRG, the partners have relinquished the areas of the Garmian Block that are not covered by the development plan. The development plan area includes the Sarqala and Hasira discoveries. The relinquished area includes Chwar, Qula, Quilijan and Baram, which are considered non-core to WesternZagros's development plans.

Optimizing drilling rig contracts

During the preparation of the development plan and its approval by the KRG, and in order to minimise short-term expenses, WesternZagros is in advanced discussions with the KRG and Gazprom Neft to temporarily assign two of its contracted drilling rigs elsewhere for the remainder of 2014. Under this arrangement, the rigs would return to the Company's Garmian Block for development drilling on Sarqala in early 2015 once the development plan is approved and additional development locations are prepared.

Financing Alternatives

WesternZagros as at December 31, 2013, had net working capital of approximately $97million, which is sufficient to fund planned operations in 2014. As development plans advance, the Company will evaluate funding options with a mind to maximizing value creation for shareholders. Options may include accessing the debt and/or equity markets, additional partnerships, farmouts or other strategic arrangements.

http://www.oilvoice.com/n/WesternZagros ... de5b5.aspx

[Anthea]

Anadolu Agency



Turkey's energy minister: no agreement on northern Iraqi oil

More than 400,000 barrels of northern Iraqi oil currently stored on Turkish shores.

ANKARA

There will be no agreement on northern Iraqi oil following the Turkish PM's meeting with the Kurdish Regional Government (KRG) PM, said Turkey’s Energy Minister Taner Yildiz in Ankara on Friday, as disputes still linger between Baghdad and Irbil over the mechanism of Kurdish oil exports to Turkey.

Turkish PM Recep Tayyip Erdogan will be meeting with the Kurdish Regional Government (KRG) PM Nechirvan Barzani on Saturday.

"An agreement on northern Iraqi oil is not in this meeting's agenda," Yildiz said speaking at a meeting with the board members of the Energy Market Regulatory Agency of Turkey (EMRA). "This is a regular meeting regarding the current agreements with the central government in Baghdad.”

Tensions mounted over Irbil's right to export oil independently of the Iraqi central government after Turkey signed a series of deals in November of 2013 with Iraqi Kurdistan to build a multi-billion dollar oil and gas pipelines to ship the autonomous region's reserves to world markets.

This infuriated Baghdad, which claims sole authority on Iraq's oil.

On January 2, Taner Yildiz announced that crude oil from northern Iraq had started flowing to Turkey's Mediterranean export hub in Ceyhan.

The 400,000 to 420,000 barrels of oil stored, however, remain in containers.

They have yet to leave Turkish shores as the central government in Iraq and the KRG have not reached an agreement on the export medium of the northern Iraqi oil.

englishnews@aa.com.tr

[Anthea]

BASELINE VALUATION

888m shares in issuance.

163m bls, NPV $6.17 / bl. $1005 bn valuation = £605m = 68.2p share NAV


Currently, 2C sits at 576m bls, 2P+2C is 739m bls

BEST CURRENT POTENTIAL VALUATION
Assuming all contingents could be proven into booked reserves, at $6.17 per barrel that still comes to a maximum of £3.09 per share.

NEXT VALUATION
It is possible, and given the number of factors, likely, that the STOIP will increase. I have yet to calculate adjustments for potential upside based on assumptions of what/why the COO & chief geologist believed (porosity, depth/OWC, AB differences). These estimates would be guesses and I cannot say what potential (not guaranteed) upside can be added.

Based on the CPR numbers & unquantifiable scenarios. If someone offered £3 today, a decent proportion of investors would be only too happy to leave behind that additional upside, screw the uncertainty, and just turn their back on Todd Kozel forever.

And in terms of how life still transforms for the Kozels... Here's an example..

Say GKP goes at £3.

Let's not forget Gokana Trust still has a significant chunk of shares.
A) Gokana "forgot" the sale of shares which banked £12m at the height of the Exxon rumour
B) Gokana subsequently dipped below the 3% mark, making it impossible to trace further. But argument-sake assume Gokana still held 20m shares, the Trust stands to make £60m on a £3 deal. (If it hasn't made more buying/selling with great "luck").

In 2009, 2010, 2011, 2012 Todd Kozel's package was $2m, $10m, $22m, $13m. An aggregate of circa £30m. There is however, some double-counting. The packages include share awards, some of which were moved to Gokana. Say £10m worth, so adjusted aggregate £20m

Then we have Todd's options, he argued $22m salary in 2011 for not having taken options. But he has a total of 16.8m share options, (9.7m 2009, 4.1m 2010, 3m 2012). Exercise price 75p. At £3, that is a profit of £85m.

Overall, the guestimate is Todd will have at least squeezed for himself close to £175 million if he gets to vest all options and Gulf is bid for at £3.

Out of this, £32m is fixed salary or Gokana profit.
20m is Gokana shares and 16.8m option shares... (all of which is like 40m shares - £12.6m exercise cost).

So the basic formula depending on share price is about : £20m + 40m shares

ie If GKP gets bought for £2, Todd still will have made £100 million. And 20m Gokana/family shares is at a guess, a conservative estimate of what the Kozel family own.

These figures aren't precise, but it gives you a figure of one specific individual who's absolutely milking it, yet whose leadership cannot even defend numbers let alone actually execute, regarding the CPR.

The CEO's darkened tan tells you here's a man already living somewhere off in the sunset.

"In Todd we Trust" sing the PIs, and the city's nothing but "bashers" apparently.

So takeover tomorrow? £8.00?

How about remove the CEO tomorrow, and maybe the price will recover to £1.80 first.

[Anthea]

Saturday 15 March 2014

Gulf Keystone Petroleum GKP LN 120.25p Mkt Cap. £1.07bn

Gulf Keystone issued an independent CPR of its assets across Kurdistan.

ERC Equipoise has assigned reserves to Shaikan for the first time, reflecting the current production and approved field development plan (phase 1), which should take production capacity to 100mb/d.

The gross 2P reserves have been estimated at 299mmbbl, while a more expanded development of 2P+2C resources stands at around 1bnbbl.

The report also estimates a reduced OIP for Shaikan, following inconclusive test results seen at Shaikan-6.

The CPR highlights that much is still uncertain, but does confirm that Shaikan is a very large field, with a revised best OIP of 9.2bnbbl.

Following the report, we have remodelled the assets and reduce our core NAV to include just the 2P+2C resources.

While we continue to believe the field has the potential to grow over time, our full NAV falls to 141p/share (with core NAV of 97p/share).

[Anthea]

The reason behind the lack of major surges in the oil production is because foreign oil companies have been prohibited from signing contracts with oil fields in Kirkuk, oil expert Dr. Ahmed Musa Jiyad revealed.

Kirkuk Now interviewed Dr. Jiyad on the oil production in the Kirkuk province during a workshop on oil held in Erbil. Dr. Jiyad had previously worked as an executive administrator for the Iraqi Oil Ministry until 1988. He is now a consultant to the Center for Global Energy Studies in Norway. .

Dr. Jiyad said that the fields of Kirkuk where the first barrel of Iraqi oil was produced are considered the major oil output in Iraq.

He added that the amount of oil production in those fields began to be adversely and significantly affected in recent years. To avoid this, the Federal Ministry of Oil (MOO) offered these fields in the first licensing round in 2009, looking forward to signing contracts with international oil companies for the development of the oil wells in Kirkuk and in order to increase production levels.

He made it clear that no agreement has been reached in this round with any global company to develop the Kirkuk oilfields, because of the very high financial charges requested by those companies which were not accepted by the MOO. This prevented quality mutations of oil production in the Kirkuk fields in comparison with those in the Southern Iraq.

He continued that the fields of southern Iraq, such as Rumaila, Zubair, West Qurna 1, and Mesan have experienced an increase in oil production because of the signing of long-term contracts with international companies to develop competent oil fields and increase production levels.

Oil was first discovered in Kirkuk in 1927 in the area of ​​Papa Gorgor near the city of Kirkuk, but it was extracted in an organized way in 1934.

Dr. Jiyad mentioned that BP, the third largest private oil company in the world, is preparing a technical study of the Kirkuk oilfields according to a memorandum of understanding signed with the Iraqi MOO. The study will last for eighteen months. It will prepare a report on how to develop the necessary plans to develop oil wells.

The expert went on saying that in the beginning, the study faced some political problems between the Kirkuk Provincial Council and the MOO, but those issues were resolved. “I think that the two sides are now in the right direction despite objections from the Kurdistan Regional Government,” Dr. Jiyad stated.

He added that this study is purely technical and may not result in contracts being signed. It is necessary to accomplish it since the oil wells in Kirkuk have problems due to the fact that the geological structure of the fields is classified as complicated.

“These geological structures have been badly dealt with especially in the eighties and nineties. But as a legal economist and not a technician I cannot offer more information on the subject,” Dr. Jiyad continued.

Iraq relied on the Kirkuk fields to export most of its oil in the eighties via Turkey through the Kirkuk – Ceyhan pipeline especially in the times when it could not export oil from the fields in Basra because of the Iran-Iraq war from 1980-1988.

This was a burden on the Kirkuk fields which also experienced neglect in the nineties because of the economic embargo imposed on Iraq by the UN after invading Kuwait.

In response to the question of whether or not the discovery of oil in Iraqi Kurdistan affects the status of Kirkuk on the Iraqi oil map, the oil expert replied that the oil production from the region according to all the contracts signed by the KRG is not equivalent to the oil produced from Kirkuk, nor does it affect the status of Kirkuk.

The expert concluded with a reference to the issue of the gas burning associated with the process of oil extracting in the Iraqi fields, including those of Kirkuk. He deemed it a waste of resources and pollution to the environment. He attributed it to the lack of proper mechanism to make benefit of the gas.

He pointed out that 83% of the total gas had burnt away in the whole fields of Iraq in 2013. And the estimated amount of the oil stockpile in the fields of Kirkuk is more than 12 billion barrels while the rate of the export of raw oil produced from Kirkuk is about 400,000 barrels per day.

Ahmed Mohammed – Kirkuk Now

http://kirkuknow.com/english/index.php/ ... companies/

[Anthea]

Al Arabiya

Kurds offer to export 100,000bpd of oil in Iraq row


A general view of the Khurmala oilfield in Erbil, north of Baghdad. Iraq’s Kurdish region pledged to export 100,000 barrels of oil per day through pipelines controlled by the central government. (File photo: Reuters)

Iraq's autonomous Kurdish region pledged on Thursday to export 100,000 barrels of oil per day through central government-controlled pipelines in a bid to resolve an impasse with Baghdad.

The move comes with Kurdish authorities in Erbil and the central government locked in a row over energy exports in which Baghdad has choked off funds to the northern region, draining its reserves.

"As a goodwill gesture, the Kurdistan regional government (KRG) has offered to make a contribution to Iraq oil pipeline exports to give the negotiations [between Baghdad and Erbil] the maximum chance of success," it said in a statement posted on its website.

"The KRG contribution to oil export [sic] will be one hundred thousand [100,000] barrels per day" from next month onwards, the statement said, adding that exports will continue "while the negotiations are proceeding in a positive direction".

"The KRG has not set any preconditions for this initiative."

Earlier this year, Erbil shipped oil directly to Turkey without Baghdad's consent, although the crude has not yet been sold on international markets.

The decision by Kurdish authorities was the latest in a years-long row between Baghdad and Erbil over energy, and spurred the central government to partly cut off funding to the three-province region.

The decline in funding has forced Erbil to delay paying some government salaries.

Thursday's announcement was welcomed by the U.S. embassy in Baghdad, which said it was buoyed by "the commitment from the KRG to ensure that these exports continue in parallel to ongoing talks towards a framework agreement on the management of the hydrocarbon sector".

Baghdad argues that all oil sales must be overseen by the central government, and regards any independent exports as tantamount to smuggling.

Kurdistan, which enjoys a high level of autonomy from Baghdad and has its own security forces, government and flag, has also drawn Baghdad's ire for signing contracts with foreign energy firms without its approval.

In addition to disputes over natural resources, the long-standing ambition of Kurdish leaders to incorporate a swathe of territory stretching from Iran to Syria into their autonomous region, against Baghdad's strong opposition, is another major point of contention.

Diplomats and officials say the disputes are one of the biggest long-term threats to Iraq's stability.

http://english.alarabiya.net/en/busines ... q-row.html

[Piling]

2nd Monthly report from the Kurdish Minister or Natural Resources :

http://mnr.krg.org/index.php/en/press-r ... hly-report

[Anthea]

Al Arabiya

Turkey says ready to help export Iraqi Kurdistan’s oil


A worker walks down the stairs of an oil tank at Turkey’s Mediterranean port of Ceyhan

Turkey is ready to help Iraqi Kurdistan export its oil to world markets once oil storage tanks in the Mediterranean port of Ceyhan are full, Turkey’s Energy Minister Taner Yildiz said on Wednesday.

Once the tanks are full and there is an excess amount, "we would like this to be offered to world markets ... on behalf of Iraq," Yildiz said in an interview with Turkey's NTV Television.

"Regardless of the volumes, Iraqis will auction and sell this oil at world market prices. This could be done via Tupras or brokers in other countries," Yildiz added.

Oil flow from the Kurdistan Regional Government's (KRG) pipeline via Turkey started in December and so far around 1.35 million barrels of oil have been stored in tanks at Turkey's southern port of Ceyhan.

The capacity of the three tanks at Ceyhan allocated for Kurdish oil is around 2.5 million barrels.

But exports of Kurdish oil have been held up due to slow progress in talks between the KRG in Arbil and the central government in Baghdad, who are at loggerheads over the payment method and sharing of Iraq's oil revenues.

Baghdad's withholding of funds to punish the Kurds for trying to export oil via the new pipeline has only added to the deadlock.

Looking to break the impasse, the semi-autonomous region last week announced that it will export 100,000 barrels of oil per day through a Baghdad-controlled federal pipeline from April 1.

"As a goodwill gesture the Kurdistan Regional Government (KRG) has offered to make a contribution to Iraqi oil pipeline exports to give the negotiations the maximum chance of success," Prime Minister Nechirvan Barzani said in a statement.

The oil is to be exported via Iraq's State Oil Marketing Organisation (SOMO) and the revenues deposited in the Development Fund for Iraq (DFI) account in New York.

http://english.alarabiya.net/en/busines ... s-oil.html

[Anthea]

Kurds to export some oil through Iraq pipeline as 'goodwill gesture'
Anthea: I personally have NO goodwill towards Irag

Kurdistan will export 100,000 barrels of oil per day through the Iraqi pipeline network from April 1 as a "gesture of goodwill" while negotiations with Baghdad continue, a statement from the region's prime minister said on Thursday.

The initiative marks a breakthrough in months of tortuous negotiations to resolve a dispute between Kurdistan and the Iraqi central government over exports of oil from the autonomous region.

Crude from Kurdistan used to flow through a Baghdad-controlled pipeline to the Turkish port of Ceyhan, but exports via that channel dried up in late 2012 due to a dispute over payments for oil companies operating in the region.

Since then, the Kurds have trucked smaller quantities of oil across the border while building a separate pipeline to Turkey in defiance of Baghdad, which retaliated this year by cutting the region's monthly budget allocation.

"The negotiations with Baghdad on oil export and budgetary matters are ongoing. These negotiations have not yet resulted in any acceptable agreements," read the statement by Prime Minister Nechirvan Barzani.

"As a goodwill gesture the Kurdistan Regional Government (KRG) has offered to make a contribution to Iraqi oil pipeline exports to give the negotiations the maximum chance of success".

A Western official said the Kurds would resume feeding crude into the Baghdad-controlled pipeline, which has repeatedly been sabotaged over the past year and is currently since the beginning of this month.

Meanwhile, more than one million barrels have already been pumped through the new Kurdish pipeline into storage tanks at Ceyhan, but the official said that oil would not be sold until further progress was made in negotiations.

The discussions include proposals for oil revenue to be disbursed to the Kurds automatically, as well as the formation of a new committee to oversee exports, the official said.

For now, the oil will be exported via Iraq's State Oil Marketing Organisation and the revenues deposited in the Development Fund for Iraq account in New York, as before.

The official described the talks as "extremely difficult" and said elections next month had further complicated the picture, but that the new initiative "should help improve the atmosphere overall". (Reporting by Isabel Coles; Editing by Mark Trevelyan and Tom Brown)

http://uk.reuters.com/article/2014/03/2 ... E220140320

[Anthea]

Bloomberg

Rosneft Said to Discuss Taking Stake in Exxon Kurdish Blocks

Exxon Mobil Corp. is negotiating to bring OAO Rosneft into oil and gas licenses in Iraq’s Kurdistan region, people familiar with the talks said.

The talks show the largest U.S. and Russian oil companies forging ahead with a global alliance even as relations between the two governments stand at their lowest ebb since the end of the Cold War. Rosneft is considering the proposal and a deal isn’t guaranteed, according to the people, who asked not to be identified because the discussions are confidential.

Exxon and Rosneft are working on ventures to explore the Arctic Ocean, test the potential of shale oil in Russia and pump crude in Texas. So far, sanctions imposed by the U.S. and European Union in response to President Vladimir Putin’s decision to annex Crimea haven’t had an impact on the work of international oil companies in Russia.

Kurdistan, an autonomous region in northern Iraq, is ramping up oil production and trying to resolve a dispute with the government in Baghdad over pipeline exports. Exxon reduced its stake in one of the biggest oilfields in southern Iraq after moving into Kurdistan, where the power to award exploration licenses has been the subject of dispute between the central and regional administrations.

Rosneft shares rose as much as 2.4 percent to 237 rubles in Moscow and traded at 236 rubles at 3:07 p.m. local time.

Exxon signed six production-sharing contracts covering more than 848,000 acres in Kurdistan in October 2011, according to the Irving, Texas-based company’s 2013 annual report on its website. Exxon began a seismic survey on four of six blocks in 2013 and has begun drilling one well, according to the report.
Sakhalin Island

“Exxon is an important and large partner of Rosneft’s in a wide range of projects,” Alexander Kornilov, an oil an gas analyst at Alfa Bank said by e-mail today.

An Exxon-operated venture with Rosneft at Sakhalin Island plans to begin pumping oil from the Arkutun-Dagi project off Russia’s Pacific coast this year, Senior Vice President Mark Albers said on Mar. 5. The companies additionally plan a well in the remote and prospective Russia’s Kara Sea this August.

Rosneft’s press service and an Exxon representative in Moscow declined to comment as did an official at the Kurdistan Regional Government.

http://www.bloomberg.com/news/2014-03-2 ... locks.html

[Anthea]

Erbil and Baghdad: An Interim Arrangement for Oil Exports
Opinion By DAVID ROMANO



The Kurdistan Regional Government recently announced that as of April 1st, it would begin pumping 100,000 barrels of oil per day into the Iraqi national export regime, controlled by Baghdad’s State Oil Marketing Organization (SOMO). This is despite the fact that no agreement between Baghdad and Erbil regarding oil exports has been reached yet. Kurdistan still insists that it enjoys the constitutional right to export its own oil and gas, collect the proceeds of their sale, and forward money owing to Baghdad after deducting its share. The Maliki government in Baghdad, in contrast, still insists that it has sole authority over oil and gas exports.

As I discussed in previous columns, Baghdad has no real constitutional basis to claim monopolistic authority over Iraq’s, much less Iraqi Kurdistan’s, oil industry. The Constitution only gives the central government in Baghdad joint authority with the producing regions and governorates over “present fields,” meaning those fields producing in 2006. Baghdad also enjoys the sole authority to sign international treaties, however, which means governorates or the Kurdistan Region wishing to export their own newly discovered oil and gas without Baghdad’s consent would need to do so with something short of a new treaty with the receiving state – perhaps an “agreement,” an “understanding” or simply a sales contract.

Without real legal authority to claim complete control over the entire Iraqi oil industry, officials in Baghdad often try to claim a sort of ethical or utilitarian authority: they argue that they insist on deals with the oil companies that are more beneficial to Iraq, and they remain the government body with the authority and responsibility to spend the oil revenues on all of Iraq. They also reason that if the Kurds get too much control of their oil, they will use it as an economic base with which to secede from Iraq.

Let us look at what has actually happened so far, however. Kurdistan’s authorities attracted over 50 international oil companies to invest in what was, at the time, unproven oil and gas reserves, while Baghdad mostly just relied on the very big existing fields in the south. With the revenues and the production deals it got from oil companies, Kurdistan went on to provide electricity seven days a week and 24 hours a day to its people, as well as services from roads and healthcare to good security. Baghdad “spent” some 30 billion dollars on the electricity grid, yet much of Iraq remains in the dark more often than not. Services and security in general remain abysmal. And just two years ago, Kurdistan was pumping its oil into SOMO’s network, but Baghdad refused to remit the money needed to pay oil companies operating in Kurdistan, which is what led the Kurds to pursue a more independent hydrocarbons sector in the first place. By now cutting off the Kurds from the budget they are entitled to, Baghdad thus encourages secession rather than preventing it.

For a little while longer, however, Kurdistan’s government appears willing to try and work things out. Kurdistan’s civil servants need their paychecks, and responding to Baghdad’s blackmail with similar tactics – such as withholding water from Dukan dam – would just punish average Arab Iraqis just as Baghdad now toys with average Kurdish Iraqis. Authorities in Erbil thus described the move to begin pumping some oil into into SOMO’s network as “a goodwill gesture” while negotiations with Baghdad continue. The Kurdistan Region is supposed to have a sub-account established at the New York bank where SOMO deposits its oil revenues, and the Region’s share of oil sales will supposedly be deposited there. This "sub-account" would of course still be vulnerable to Baghdad not making the deposits as automatically as it promises, if at all. It also remains unclear whether or not the operating expenses and revenue shares of the international oil companies producing in Kurdistan will be included in what is deposited in the sub-account.

Maliki will claim this as a victory to his constituents, which is important to him ahead of the upcoming elections. The Kurds, on the other hand, need the revenue now and may have calculated that this will allow them to bide their time until after the elections -- when Maliki will not need to look so tough to his voters, but will likely need Kurdish support to form a new government. That's when the Kurds are probably calculating that they can wrest recognition of their own full control of their hydrocarbons from Baghdad -- and they undoubtedly intend to drive a hard bargain aimed at securing immediate gains, rather than the vague (and mostly broken) promises Maliki gave them in 2010.

The Kurds can also claim a sort of victory: if one thinks back to just a few years ago, even the contracts they signed with IOCs were contested by Baghdad. Today if Baghdad continues to accept the oil they produce, it implicitly accepts the legitimacy of those contracts. The issue today is about control of exports and bank accounts rather than the contracts, which is a major change really.

If they prove wise enough, Kurdistan’s leaders might also draw a lesson from this latest crisis and make some real efforts to reduce the size of government in the Kurdistan Region. A leaner, more efficient government, a more diversified economy and a portion of future oil revenues invested into a sovereign wealth fund for all of the Region’s people would promote true independence and prosperity.

Anthea: I enjoy reading David Romano's opinions - he is an excellent and well informed writer - uses simple terms that even the general public is able to understand - my English professor pointed out that as writing is a form of communication - in order to communicate with the general public one has to use terminology that they understand

K.I.S.S. (a term used greatly in marketing to get ones point across) offers an ideal guideline for speech and correspondence writing:

"keep it short and simple" and "keep it simple and straightforward"

David Romano has been a Rudaw columnist since August 2010. He is the Thomas G. Strong Professor of Middle East Politics at Missouri State University and author of The Kurdish Nationalist Movement (2006, Cambridge University Press).

http://rudaw.net/english/opinion/270320 ... 4C2yV.dpuf