Genel Energy has announced that RPS Energy Consultants, as part of its work on the updated competent person’s reports (‘CPRs’) for the Bina Bawi and Miran West fields (Genel 100% and operator), has finalised its evaluation of the contingent gas resources at both assets:

  • The RPS evaluation confirms a significant upgrade to the combined 2C gross (100% working interest (‘WI’)) raw gas resource estimate for the Bina Bawi and Miran West fields:
    • The RPS assessment of the combined gross 2C raw gas resource for both fields now stands at 14,792 Bscf, a figure which excludes associated condensate volumes attributable to the upstream partners
    • The RPS assessment of the combined gross 2C condensate volumes potentially recovered from raw gas production at both fields totals 137 MMstb
    • As at end-2016 Genel’s reported 2C resources included net raw gas resources from Miran and Bina Bawi totalling 1,421 MMboe1, which related to Genel’s respective 80% and 75% interests in the Bina Bawi and Miran PSCs at that time
    • In February 2017 the Company increased its interest in both PSCs to 100%, resulting in a combined pro-forma end-2016 Genel 2C resource of 1,815 MMboe (10,530 Bscf2)
    • The 2018 RPS estimates of combined 2C resources from both fields have increased c.40% compared to the pro-forma end-2016 2C resource
  • The revised Bina Bawi 1C gross raw gas resource estimate is more than 50% higher than the gas volume agreed to for the field under the Gas Lifting Agreement (‘GLA’). The revised Miran West 1C gross raw gas resource estimate is in line with the volume agreed to for the field in the GLA

A comparison of the revised 2C gross contingent resource numbers for both fields and the Company’s end-2016 number, which was based on the 2013 RPS reports plus the addition of the Company’s assessment of non-hydrocarbon gases, is summarised in the following table. Further detail is provided in an appendix to this announcement.

Gross (100% WI) 2C Contingent Resources Raw gas (Bscf)

Previous

Revised

change

Bina Bawi

6,472

8,230

27%

Miran West

3,688

6,562

78%

RPS’s updated analysis of the raw gas resources on both fields has benefitted from updated reservoir simulation modelling combined with analogue analysis jointly created and developed by the Company and Baker Hughes since the original reports were produced. As a consequence, the recovery factors for the gas reservoirs in both fields have, in most resource categories, been increased to reflect a better understanding of potential reservoir performance. Further appraisal activity, which is currently under consideration, could help refine reservoir performance and these recovery factor estimates.

Volumes agreed under the GLAs total 2,800 Bscf from Bina Bawi, and 2,000 Bscf from Miran West over a 12 year period, consisting of a two year build-up period and 10 year plateau period. The revised 2C and 3C raw gas resources for both fields significantly exceed these volumes. Following the completion of the upstream field development plans (‘FDPs’), sufficient progress on the midstream facilities and sales gas export route, and subsequent final investment decision, the Company expects that a percentage of the contingent raw gas resources will be converted to reserves, dependent on the volumes set to be produced under the FDPs.

 

The upstream FDPs for the gas and oil fields in the Bina Bawi and Miran PSCs, which are being carried out by Baker Hughes, are expected to be completed shortly.

RPS is continuing its evaluation of the oil bearing reservoirs at both fields, the results of which will be announced once finalised.

Appendix

Summary of Contingent Resources – Development unclarified (Gross 100% working interest basis) attributable to the Bina Bawi and Miran West fields as of 31 December 2017

Gross (100% WI) Contingent Resources

Gross (100% WI) Contingent Resources

BINA BAWI

Raw gas (Bscf)

Condensate (MMstb)

MIRAN WEST

Raw gas (Bscf)

Condensate (MMstb)

1C

4,651

34

1C

1,967

18

2C

8,230

62

2C

6,562

75

3C

13,036

99

3C

18,429

233

1 Genel figure based on the 2013 RPS reports plus the addition of the Company’s assessment of non-hydrocarbon gases

2 Based on a conversion factor of 5.8 MMscf/bbl

(Source: Genel Energy)

Genel Energy has announced that RPS Energy Consultants, as part of its work on the updated competent person’s reports (‘CPRs’) for the Bina Bawi and Miran West fields (Genel 100% and operator), has finalised its evaluation of the contingent gas resources at both assets:

  • The RPS evaluation confirms a significant upgrade to the combined 2C gross (100% working interest (‘WI’)) raw gas resource estimate for the Bina Bawi and Miran West fields:
    • The RPS assessment of the combined gross 2C raw gas resource for both fields now stands at 14,792 Bscf, a figure which excludes associated condensate volumes attributable to the upstream partners
    • The RPS assessment of the combined gross 2C condensate volumes potentially recovered from raw gas production at both fields totals 137 MMstb
    • As at end-2016 Genel’s reported 2C resources included net raw gas resources from Miran and Bina Bawi totalling 1,421 MMboe1, which related to Genel’s respective 80% and 75% interests in the Bina Bawi and Miran PSCs at that time
    • In February 2017 the Company increased its interest in both PSCs to 100%, resulting in a combined pro-forma end-2016 Genel 2C resource of 1,815 MMboe (10,530 Bscf2)
    • The 2018 RPS estimates of combined 2C resources from both fields have increased c.40% compared to the pro-forma end-2016 2C resource
  • The revised Bina Bawi 1C gross raw gas resource estimate is more than 50% higher than the gas volume agreed to for the field under the Gas Lifting Agreement (‘GLA’). The revised Miran West 1C gross raw gas resource estimate is in line with the volume agreed to for the field in the GLA

A comparison of the revised 2C gross contingent resource numbers for both fields and the Company’s end-2016 number, which was based on the 2013 RPS reports plus the addition of the Company’s assessment of non-hydrocarbon gases, is summarised in the following table. Further detail is provided in an appendix to this announcement.

Gross (100% WI) 2C Contingent Resources Raw gas (Bscf)

Previous

Revised

change

Bina Bawi

6,472

8,230

27%

Miran West

3,688

6,562

78%

RPS’s updated analysis of the raw gas resources on both fields has benefitted from updated reservoir simulation modelling combined with analogue analysis jointly created and developed by the Company and Baker Hughes since the original reports were produced. As a consequence, the recovery factors for the gas reservoirs in both fields have, in most resource categories, been increased to reflect a better understanding of potential reservoir performance. Further appraisal activity, which is currently under consideration, could help refine reservoir performance and these recovery factor estimates.

Volumes agreed under the GLAs total 2,800 Bscf from Bina Bawi, and 2,000 Bscf from Miran West over a 12 year period, consisting of a two year build-up period and 10 year plateau period. The revised 2C and 3C raw gas resources for both fields significantly exceed these volumes. Following the completion of the upstream field development plans (‘FDPs’), sufficient progress on the midstream facilities and sales gas export route, and subsequent final investment decision, the Company expects that a percentage of the contingent raw gas resources will be converted to reserves, dependent on the volumes set to be produced under the FDPs.

 

The upstream FDPs for the gas and oil fields in the Bina Bawi and Miran PSCs, which are being carried out by Baker Hughes, are expected to be completed shortly.

RPS is continuing its evaluation of the oil bearing reservoirs at both fields, the results of which will be announced once finalised.

Appendix

Summary of Contingent Resources – Development unclarified (Gross 100% working interest basis) attributable to the Bina Bawi and Miran West fields as of 31 December 2017

Gross (100% WI) Contingent Resources

Gross (100% WI) Contingent Resources

BINA BAWI

Raw gas (Bscf)

Condensate (MMstb)

MIRAN WEST

Raw gas (Bscf)

Condensate (MMstb)

1C

4,651

34

1C

1,967

18

2C

8,230

62

2C

6,562

75

3C

13,036

99

3C

18,429

233

1 Genel figure based on the 2013 RPS reports plus the addition of the Company’s assessment of non-hydrocarbon gases

2 Based on a conversion factor of 5.8 MMscf/bbl

(Source: Genel Energy)

By John Lee.

US-based Chevron plans to resume drilling at the Sarta 3 block in Iraqi Kurdistan.

According to a report from Bloomberg, the company had temporarily halted exploration work in October after the Kurds voted in favour of independence.

Chevron acquired Reliance Exploration & Production DMCC‘s 80 percent interest and operatorship of the production sharing contracts (PSCs) covering the Rovi and Sarta blocks in 2012; Austria’s OMV holds of the other 20 percent interest.

The blocks are located north of Erbil and cover a combined area of approximately 490 square miles (1,124 square kilometers).

(Sources: Bloomberg, Reuters)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Sarchin Salih.

Kurdish Crises Drive Kurdish Investors to put their Money Elsewhere

It’s not only Iraqi and international investors getting their money out of Iraqi Kurdistan. Financial and political problems are also leading locals to invest further south.

Ahmad Ali is an Iraqi Kurdish businessman who’s been living in the Erbil province, in Iraqi Kurdistan, for years. In the past Ali often looked at the semi-autonomous northern region of Iraqi Kurdistan as the best place to invest his money. Not anymore.

Currently Ali is looking into building a mall and supermarket in the Kirkuk province, outside of Iraqi Kurdistan’s official borders, at the cost of US$50 million. He is also working on a residential project in the southern province of Dhi Qar.

“As an investor, I look for the best opportunities. I don’t care about geography,” Ali told NIQASH. “At the moment southern and central Iraq are the best places to put my money.”

The market in Iraqi Kurdistan is dead right now, Ali says, thanks to the financial and political crisis here.

“The last few years we have dealt with a financial crisis, a slowdown and a significant decline in investment,” Yassin Mahmoud Rashid, the spokesperson for the Kurdistan Investors’ Union, told NIQASH. “About 20 percent of investors have now left this market thanks to a decline in demand and the losses being incurred by some projects.”

In the past the Iraqi Kurdish government had guaranteed investment projects a steady supply of electricity and tax cuts for certain time periods, Rashid pointed out.

As the Kurdistan Regional Government has promised, and to prove its commitment to transparency in the entire oil and gas sector of the Kurdistan Region, today the first report by the international auditing company, Deloitte, is released.

The report, which includes verified numbers of export and sales of oil in the Kurdistan Region for the first six months of 2017, is available to the public.

According to the validated numbers, the total revenue generated from oil sales is 3,328,211,119 US Dollars, after deducting expenses. The average oil sales price for that period was 41.29 $/bbl for exported barrel of oil through pipelines, at a time when average Dated Brent price was approximately 51.71 $/bbl.

The auditing project was ordered by the Council of Ministers of the Kurdistan Regional Government through Decision No. (73) on 3rd of February 2016, as a continuation of Oil and Gas Law, and Oil and Gas Trust Fund Law.

In a transparent process and in accordance with the World Bank guidelines, the Regional Council for Oil and Gas Affairs invited the Big Four international auditing firms in the world and consequently signed Master Service Agreements (“MSA”) with Deloitte and Ernst & Young, after following international tendering standards. According to the MSA’s, the oil and gas sector will be subject to audit, including the historical data.

The Kurdistan Regional Government considers the auditing process as an important step for strengthening transparency in the oil and gas sector of the Kurdistan Region. The KRG has approved Deloitte’s recommendations to further enhance the processes and address any shortcomings. The KRG is also working to develop the accounting and auditing capabilities of the financial monitoring agencies in the Region, in order to empower them for future projects.

This is the first time that reputable and major international companies audit the oil and gas sector in the Kurdistan Region. In the near future, the validated numbers for the second half of 2017, and for the past years will be released to the public.

For further questions, contact information will be provided soon.

  1. Deloitte’s report for first six months of 2017 is accessible through this link (PDF format), in Kurdish, Arabic, and English.
  2. This link (PDF format) consists of 27 frequently asked questions in Kurdish, Arabic and English to help the readers better understand different sections of the report.
  3. This link (PDF format) includes a snapshot (info-graphics) regarding oil exports, local consumption and revenues in the Kurdistan Region, especially average daily exports and daily price of Kurdistan Region’s oil compared to Dated Brent price for the first six months of 2017 in Kurdish, Arabic and English.

(Source: KRG)

Gulf Keystone Petroleum (GKP) has announced that a crude oil sales agreement has been signed between Gulf Keystone Petroleum International Ltd (“GKPI”), on behalf of the Shaikan contractors, and the Kurdistan Regional Government (KRG).

Under the agreement, the KRG will purchase Shaikan crude oil at the monthly average Dated Brent oil price minus a total of c.$22 per barrel for quality discount, as well as domestic and international transportation costs. This discount is based on the same variables contained within other oil sales agreements in the Kurdistan Region of Iraq. 

The majority of the Shaikan crude oil is currently being transported by truck from the Shaikan field to Fishkhabour, where it has been injected into the export pipeline to Turkey gradually since 15 November 2017, while the remainder is sold domestically. 

The agreement is effective from 1 October 2017 until 31 December 2018.  GKPI will now invoice the KRG for oil sales for the months from October 2017 onwards on the basis of the realised netback price and net entitlement volumes in accordance with the Shaikan Production Sharing Contract, as amended by the 1st PSC Amendment in 2010 (“Shaikan PSC”).

The Company continues its discussions with the KRG’s Ministry of Natural Resources (“MNR”) on the terms of a potential 2nd PSC Amendment.  The Company will inform the market of any material developments in this regard.

(Source: GKP)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Narim Rostam.

For lawyers working on sensitive cases, especially corruption cases, in Iraqi Kurdistan, death and other threats are just part of the job.

On New Year’s Eve in the district of Bakhtiari, in Iraqi Kurdistan, there was gunfire at local lawyer Omar Tawfik’s house. But this hail of bullets was not celebratory. Tawfik believes he was targeted by unknown assailants and blames those who previously threatened him.

Tawfik received these threats because he was involved in a complex court case, that started in 2012 but has yet to be resolved, around corruption involving land sales and senior politicians and administrators. The case saw the arrest of the then-mayor of Sulaymaniyah, Zana Hama Salih, who died in mysterious circumstances while in custody.

Tawfik says he knew he would be threatened as a result of this case – even though he hasn’t been able to make much difference, he says.

The fact that those working in the legal profession are threatened is nothing new in Iraqi Kurdistan. However recently the frequency of the threats and attacks seems to have increased.

Last year, many local lawyers said at one time or another, that they were threatened. But not many of them want to chase those who harass them nor do they like disclosing the details of the threats. This is a worldwide phenomenon – lawyers are often threatened but they don’t often report the threats to the police.

In fact, details released by the Kurdistan Bar Association say that out of their 9,000 or so members, only 7 were threatened last year.

Gas Plus Khalakan (GPK), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, has issued an end-2017 operations update regarding the Shewashan field.

Oil Sales:

Total payments received by GPK for oil sales now amount to $9.0 million representing 190,115 barrels of GPK entitlement oil sold through to the end of September 2017. Sales from  October  to December  has  been  invoiced  through  the  traditional  operating procedures in place with the KRG Ministry of Natural Resources.

Oil Production:

In total, cumulative field production to date exceeds 1,300,000 barrels of oil. Current total field production is 1,000 barrels per day. Total oil production for the 3rd quarter 2017 was 81,207 barrels and 422,027 barrels have been produced in 2017, up to and including 1 December 2017.

These amounts are significantly below that required to meet forecast annual production targets and break-even economics. There are two main reasons for this lower production.

Firstly, water production rates in the Qamchuga formation have limited oil production rates. The Qamchuqa formation is heavily fractured and many of these fractures are connected to the aquifer.

Secondly, production rates from the Shiranish and Kometan reservoirs have been limited, due to these formations having a tight matrix, with their fracture network being not as developed and extensive as in the Qamchuqa reservoir. GPK continues to recomplete the four Shewashan wells to limit water production in the Qamchuga and stimulate the Kometan and Shiranish reservoirs to facilitate greater production rates.

This activity is summarized below:

Shewashan #1:

Current production rate: 350 bopd and <5% water cut from the Qamchuqa reservoir. Recompletion plans include: perforation and acid stimulation of the Kometan reservoir.

Shewashan #2:

Current production rate: 650 bopd and low water cut from the Kometan reservoir. Recompletion plans include:  Larger acid stimulation in the Kometan to increase the production from perforated intervals (45m) and a possible propped hydraulic frac in the Shiranish reservoir which has yet to be tried in the field.

ShaMaran Petroleum reports that operations in the Atrush field in Kurdistan are continuing in a normal, safe and secure manner.

Atrush is currently producing at approximately 27 thousand barrels of oil per day (“bopd”) and exports are continuing via the Kurdistan Export Pipeline system. Atrush exports for the month of December averaged 26,163 bopd and benefitted from a higher facility uptime than the 90% previously projected.

Currently the production facilities are limited to processing approximately 27,000 bopd of the total 30,000 bopd capacity due to low ambient temperatures which limits the amount of heat available to process the oil to export specifications.

Plans in 2018 include debottlenecking the production facility and proceeding with the testing, completion and tie-in of the Chiya Khere-7 well which was drilled towards the end of last year.

(Source: ShaMaran)