DNO ASA, the Norwegian oil and gas operator, today announced production at the Peshkabir field in the Kurdistan region of Iraq has ramped up to 50,000 barrels of oil per day (bopd), meeting the end-2018 target ahead of schedule and below budget.

One of two recently completed wells, Peshkabir-7, is producing over 10,000 bopd from nine Cretaceous zones through temporary test facilities and exported. The other, Peshkabir-6, drilled as a production well, but with the additional objective of appraising deeper formations, has established a deeper Cretaceous oil/water contact level than previously estimated. Further testing is underway, including test production of multiple producing zones.

The Peshkabir-8 well, spud in late August, is drilling ahead at 2,325 meters. Once completed, the rig will move to spud Peshkabir-9 in November.

Four other wells at Peshkabir now produce at a combined rate of close to 40,000 bopd following a workover at Peshkabir-3 which boosted production from that well to 11,000 bopd from 8,000 bopd.

Peshkabir production is processed through temporary test facilities until commissioning of a central processing facility with a capacity of up to 50,000 bopd by end-2018. The Company is also installing a 10-inch pipeline from Peshkabir to Fish Khabur with a capacity of 60,000 bopd. Field production is currently transported to Fish Khabur by tanker truck and a 6-inch pipeline.

At the Company’s flagship Tawke field, the Tawke-50 shallow Jeribe well drilled to a depth of 320 meters will be brought on production within several days. The Tawke-49 Cretaceous well is drilling ahead at 2,245 meters and will be completed later this month. Two additional Tawke wells, one each in the Jeribe and the Cretaceous, will be drilled by the end of the year. Workovers are also underway at two wells. Tawke production currently stands at just over 80,000 bopd.

Elsewhere in Kurdistan, the Company is about to spud its first well at the Baeshiqa license. Baeshiqa contains two undrilled structures with multiple target reservoirs in the Cretaceous, Jurassic and Triassic. The first well will target the Cretaceous and will be followed by a back-to-back well to test the deeper Jurassic and Triassic on the same structure. A third well to test the Jurassic and Triassic on a separate structure will be drilled in 2019.

“We are all in on our Kurdistan operations and delivering,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani (pictured). “Peshkabir continues to exceed expectations and we are eager to probe the promising potential at Baeshiqa,” he added.

In Norway, the Company will participate in two exploration wells to be spud in 2018. DNO currently holds 21 licenses in the country and plans an additional five exploration wells next year. The Company’s growing Norway portfolio is complemented by a 28.22 percent shareholding in UK-listed Faroe Petroleum plc.

“With USD 1 billion in financial assets, including more than USD 600 million in cash and the balance in marketable securities and treasury shares, we are well-positioned to grow our footprint in Kurdistan and Norway with the drill bit and the acquisition of producing assets,” said Mr. Mossavar-Rahmani.

(Source: DNO)

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)

By John Lee.

Iraq’s Oil Ministry has announced that it will build a new pipeline from Baiji to Fishkabur, enabling Kirkuk oil to be exported again from Turkey’s Ceyhan port (pictured).

Kirkuk’s oil was previously being exported via the Kurdistan Regional Government’s (KRG) pipeline to Ceyhan, but this has been on hold since Baghdad took control of the area.

Plans to rehabilitate Baghdad’s existing oil pipeline to Turkey, which was badly damaged by militants in 2014, have been scrapped.

(Sourced: Ministry of Oil, Rudaw)

Gulf Keystone Petroleum (GKP), operator of the Shaikan Field in Iraqi Kurdistan, has said the Kurdistan Regional Government’s Ministry of Natural Resources (MNR) is to begin exporting all Shaikan crude production via trucks to Turkey, from the end of February.

Subsequently, no Shaikan crude will be injected into the Kirkuk-Ceyhan export pipeline at Fishkhabour, until further notice by the MNR. The Company has been informed that the new arrangement is required by the MNR for its overall crude oil export quality management and is expected to be temporary. It is not expected to affect Shaikan production levels.

Under the new arrangement, the MNR has confirmed to Gulf Keystone that the economic benefit to the Company will be the same as that of the previous framework, whereby all Shaikan crude was exported via pipeline to Ceyhan.

The MNR has also confirmed its intention to take full responsibility, at its sole cost on a non-rechargeable basis, for the additional transportation costs related to this new export route arrangement, and that the Company will continue to receive a fixed payment of gross $15 million per month for sales of the crude. This agreement will remain subject to future audit and reconciliation.

Gulf Keystone continues its ongoing discussions with the MNR regarding commercial and contractual conditions, in particular those around a regular and timely payment cycle, and long-term crude marketing arrangements.

Subject to further clarity on these points, the Company looks forward to making further investments to maintain at least plateau production at nameplate capacity of 40,000 bopd, with a view to increasing to 55,000 bopd as soon as possible.

 Jón Ferrier, Chief Executive Officer, said:

This new export route arrangement confirms there is a market for Shaikan crude as a standalone product while also ensuring Gulf Keystone, and our partner MOL, remain financially and commercially neutral under this arrangement.

“We continue an active dialogue with the MNR to achieve satisfactory commercial and contractual clarity around payments and marketing which remain key to achieving production growth and realising full value potential.

(Source: GKP)

DNO ASA, the Norwegian oil and gas operator, today reported record oil and gas output in 2015 though the company’s results were impacted by the sharp drop in world oil prices.

Operated production was up 23 percent last year to 144,200 barrels of oil equivalent per day while revenues dropped to USD 187 million in 2015, down 59 percent from 2014.

Releasing its preliminary 2015 fourth quarter and annual results, the company announced plans to resume investments at its flagship Tawke field in the Kurdistan Region of Iraq, following five consecutive monthly payments for oil exports and a new payment arrangement tied to its contractual entitlements.

DNO’s Executive Chairman Bijan Mossavar-Rahmani (pictured) said:

“As much of the industry continues to hunker down, DNO’s foot is coming off the brake and pressing on the accelerator.

“The export payment arrangement just put in place provides regularity, predictability and transparency, thereby laying the foundation for stepped up investments in Kurdistan.”

New investments at Tawke are expected to reverse natural field decline and boost output by at least 10 percent by mid-year, with further output increases to follow as additional investments are made. The company also plans to drill the Peshkabir-2 appraisal well this year. If successful, DNO plans to quickly tie back the Peshkabir field to existing infrastructure at Fish Khabur only 10 kilometers away.

Mr. Mossavar-Rahmani added:

“DNO has already pulled away from the pack in Kurdistan in terms of production and exports, currently contributing nearly 60 percent of export volumes by the international oil companies.

“In addition to the scale and attractive economics of DNO’s oil reserves — unrivaled among our peer group — we have balance sheet strength to weather the oil price storm and will emerge from this crisis stronger and more profitable … We are stubbornly resilient.”

The company reported a 2015 operating loss of USD 174 million (operating loss of USD 243 million in 2014) on the back of lower revenues, restructuring and impairment charges. DNO ended the year with a cash balance of USD 238 million, up from USD 114 million in 2014.

(Source: DNO)

By John Lee.

Genel Energy has issued the following trading and operations update in advance of the Company’s half-year 2015 results, which are scheduled for release on 6 August 2015.

Tony Hayward, newly-appointed Chairman of Genel, said:

Production has grown rapidly in the first half of the year, increasing 41% year on year, with operational delivery driving record volumes above 100,000 bopd net to Genel on peak days.

“This increase has been integral in helping the Kurdistan Regional Government achieve its export goals, and the KRG is firmly committed to ensuring companies are paid in full for their production.

“Over 600,000 bopd of exports are now flowing to Ceyhan and, as distribution of the resulting revenues stabilises, the KRG is moving towards a financial position from which to make export payments to contractors.

Progress has also been made on our world-class Miran and Bina Bawi assets, the development of which provides a huge opportunity for both Genel and the Kurdistan Region of Iraq as a whole.  

“We are now working on putting in place all of the components to progress this transformational project to its development and ultimate monetisation.”

KURDISTAN REGION OF IRAQ (“KRI”) OIL PRODUCTION

  • Net working interest production for H1 2015 averaged 88,800 bopd, an increase of 41% on H1 2014. The Company’s net working interest production in May and June was 95,600 bopd
  • The Company’s 2015 production guidance is maintained at 90-100,000 bopd
  • ScreenHunter_1884 Jul. 13 11.45Gross production by field and sales route for H1 2015 is as follows:
  • In H2 2015, Genel will seek to optimise the mix between domestic and export sales from Taq Taq and Tawke, balancing the benefit of near-term cash flows with the requirement for both fields to contribute to exports via the KRI-Turkey pipeline
  • At Taq Taq, surface processing capacity stands at 150,000 bopd following the successful commissioning of a temporary production facility in Q1 2015. Completion and commissioning of the second central processing facility, which has planned capacity of 90,000 bopd, is on track for year-end 2015
  • At Tawke, wellhead, processing and pipeline capacity was successfully doubled to 200,000 bopd during H1 2015. Record daily production of c.180,000 bopd was delivered in late May

By John Lee.

Genel Energy has issued the following trading and operations update in advance of the Company’s half-year 2015 results, which are scheduled for release on 6 August 2015.

Tony Hayward, newly-appointed Chairman of Genel, said:

Production has grown rapidly in the first half of the year, increasing 41% year on year, with operational delivery driving record volumes above 100,000 bopd net to Genel on peak days.

“This increase has been integral in helping the Kurdistan Regional Government achieve its export goals, and the KRG is firmly committed to ensuring companies are paid in full for their production.

“Over 600,000 bopd of exports are now flowing to Ceyhan and, as distribution of the resulting revenues stabilises, the KRG is moving towards a financial position from which to make export payments to contractors.

Progress has also been made on our world-class Miran and Bina Bawi assets, the development of which provides a huge opportunity for both Genel and the Kurdistan Region of Iraq as a whole.  

“We are now working on putting in place all of the components to progress this transformational project to its development and ultimate monetisation.”

KURDISTAN REGION OF IRAQ (“KRI”) OIL PRODUCTION

  • Net working interest production for H1 2015 averaged 88,800 bopd, an increase of 41% on H1 2014. The Company’s net working interest production in May and June was 95,600 bopd
  • The Company’s 2015 production guidance is maintained at 90-100,000 bopd
  • ScreenHunter_1884 Jul. 13 11.45Gross production by field and sales route for H1 2015 is as follows:
  • In H2 2015, Genel will seek to optimise the mix between domestic and export sales from Taq Taq and Tawke, balancing the benefit of near-term cash flows with the requirement for both fields to contribute to exports via the KRI-Turkey pipeline
  • At Taq Taq, surface processing capacity stands at 150,000 bopd following the successful commissioning of a temporary production facility in Q1 2015. Completion and commissioning of the second central processing facility, which has planned capacity of 90,000 bopd, is on track for year-end 2015
  • At Tawke, wellhead, processing and pipeline capacity was successfully doubled to 200,000 bopd during H1 2015. Record daily production of c.180,000 bopd was delivered in late May