Iraqi and British politicians will be joining senior business leaders from both countries at the Iraq Britain Business Council’s (IBBC) eighth London conference in early November.

Entitled “Iraq – Accentuating the Positive”, the event is being held at the spectacular Institution for Civil Engineers building, One Great George Street, on November 5th and 6th.

In light of the extremely challenging situation in Iraq, the IBBC has this year chosen to focus on the continuing opportunities for British business in the country’s fast growing economy.

Chief Operating Officer, Mr Christophe Michels, said the council would provide a realistic assessment of what was going on in Iraq, financially, politically and socially.

For the first time, the event will be open to non-members.  Mr Michels says this will provide a “excellent opportunity” for business people from all sectors to meet some of the main players in the Iraqi business and political world.

The conference will comprise five separate sessions under the headings:

  • What is really happening in Iraq?
  • Consolidating Success (Using Actual Examples).
  • The Importance of the Built Environment for the Future of Iraq.
  • Oil and Gas.
  • Educational Development in Iraq.

The IBBC has already confirmed the attendance of Sheikh Humam Hamoudi, 1st Deputy Speaker of the Iraqi Council of Representatives, Lords Howell of Guildford and Green of Hurstpierpoint, the new British Ambassador to Baghdad, Mr Frank Baker, and Mr Faik Nerweji, the Iraqi Ambassador to the UK, together with other senior officials and politicians from the UK and throughout Iraq.

From the commercial and business community in Iraq, CEO of Genel Energy Tony Hayward will address the conference, Jack Pringle of Pringle and Brandon will be chairing the built environment panel whilst representatives from Shell, SKA, Al Saraji Group, Zaha Hadid Architects, SSH, Foster Wheeler, BP and Perkins+Will will all be participating.

Dr Alastair Niven will be chairing the education panel with high level representatives of the British Council, the Iraqi Government and the Leadership Foundation for Higher Education on it.

The second day of the conference has been organised in partnership with UKTI. Mr Michels says it will provide a valuable chance to assess immediate opportunities and longer-term prospects for small to medium sized companies who want to work in Iraq.

A large number of Iraqi businesses seeking business partners in the UK will be attending both conference days.

Non-members who wish to attend should contact Richard Cotton or Christophe Michels at london@webuildiraq.org. Tickets for the first conference day are priced at £750 each. Attendance of the second conference day is free of charge.

By John Lee.

Genel Energy has announced that, following a significant improvement in the security situation in the border region of the Kurdistan Region of Iraq (‘KRI’), it has begun the process of returning staffing levels to normal. This follows the temporary and precautionary step of withdrawing non-essential personnel from non-producing assets.

Genel said its primary consideration is the safety and wellbeing of our employees, an that the decision to resume full operations has been made following a close monitoring of the situation, and in consultation with the Kurdistan Regional Government, Foreign and Commonwealth Office of the British Government, and other well-placed authorities.

The company said its operations in the KRI remain safe and secure. Production at Taq Taq and Tawke has been entirely unaffected, and has risen to record levels. Since the start of September combined production from Taq Taq and Tawke has averaged c.234,000 bopd, with piped exports from both fields totalling an average of c.182,000 bopd, boosted by the recent upgrade work on the KRI-Turkey pipeline.

(Source: Genel Energy)

By John Lee.

Following recent events in the vicinity of the Kurdistan Region of Iraq (‘KRI’), Genel Energy plc has confirmed that the Taq Taq and Tawke fields remain safe and secure.

The company says that operations there are unaffected, with combined gross production from both fields averaging c.230,000 bopd this week.

It says it remains confident in the Kurdistan Regional Government’s ability to maintain the territorial integrity of both the KRI and oil infrastructure, but adds:

“In line with moves by other operators, we are taking the prudent and precautionary step of withdrawing non-essential personnel from our non-producing assets in the region.”

(Source: Genel Energy)

By John Lee.

Shares in Genel Energy, the London-listed exploration and production company and largest independent oil producer in the Kurdistan Region of Iraq, were down more than 2 percent on Tuesday after the company announced its unaudited half year results to 30 June 2014.

Results summary

ScreenHunter_889 Aug. 05 15.28

 

Highlights

  • Genel’s operations in the Kurdistan Region of Iraq (KRI) remain safe and secure
  • Significant volume growth in H1 2014, average net working interest production of 63,000 boepd represents c.50% uplift on H1 2013
  • Progress towards sustainable KRI pipeline exports – first cargo lifted from Ceyhan in May and proceeds from first sale received in a Turkish bank account controlled by the Kurdistan Regional Government (KRG)
  • First gas from Summail development delivered to Dohuk Power Station in May
  • H1 2014 revenues of $192 million, up 20% on H1 2013, excludes $40 million of export revenue owed but not recognised
  • H1 2014 EBITDAX of $138 million, up 6% on H1 2013 principally as a result of higher revenue
  • Cash balances at end H1 2014 of $974 million following high-yield bond issue; net cash of $483 million at period end

Exploration update

Material Dilolo prospect offshore Angola spudded in June, drilling operations scheduled to take up to 5 months to complete

Nour prospect on Sidi Moussa licence offshore Morocco spudded in late July and is expected to take two to three months to complete

Outlook

  • 2014 production (60-70,000 boepd), revenue ($500-600 million) and capex guidance ($550-600 million) unchanged
  • Good progress negotiating a gas sales offtake agreement (GSOA) for Miran and Bina Bawi; expected to conclude by year-end 2014

Commenting today Tony Hayward (pictured), chief executive, said:

Operational momentum in the KRI is increasing, with the opening of the KRI-Turkey pipeline resulting in a significant rise in our production. Whilst we continue to monitor the situation closely, our operations in Kurdistan have been unaffected by events elsewhere in Iraq.

“The KRG has successfully sold oil exported through Ceyhan at international prices, and we expect our production to increase further in the second half of the year as sales become regular and payments predictable.

“The signing of the gas sales offtake agreement for Miran and Bina Bawi will be transformational for our gas business, and will provide a clear path to monetisation of this world-class resource.

“With the GSOA expected to be signed before the end of the year, and drilling underway on high-impact prospects offshore Angola and Morocco, the Company is set to make material progress in the second half of 2014.

(Sources: Genel Energy, Yahoo!)

Genel Energy has issued a Trading and Operations Update in advance of the Company’s half-year 2014 results, which are scheduled for release on 5 August 2014.

PRODUCTION AND REVENUES UPDATE

  • Gross production from Taq Taq averaged 92,000 bopd in H1 2014 and 113,000 bopd in June.
  • Gross production from Tawke averaged 84,000 bopd in H1 2014 and 116,000 bopd in June.
  • Genel net working interest production averaged 63,000 boepd in H1 2014, an increase of 50% on H1 2013.
  • Genel net working interest production averaged 84,000 boepd in June 2014 on the back of exports via the KRI-Turkey pipeline, trucked exports via Turkey, strong domestic demand and the ramp up of deliveries from the Summail gas field into the Dohuk power station.
  • The Company’s 2014 production guidance is maintained at 60-70,000 boepd.
  • The Company’s 2014 revenue guidance is maintained at $500-600 million.

OPERATIONS AND PIPELINE EXPORTS

  • Genel’s operations in the Kurdistan Region of Iraq (“KRI”) remain safe and secure.
  • First exports by the Kurdistan Regional Government (“KRG”) via the new KRI-Turkey pipeline infrastructure were lifted from Ceyhan in May. Proceeds from the first cargo, sold at international prices, have been paid into a bank account in Turkey controlled by the KRG.

By Ruth Lux, Managing Director of political risk consultancy Strategic Analysis.

The security situation in Iraq has significantly declined over the last week. Mosul and Tikrit fell to the Islamic State of Iraq and the Levant (ISIS), an al-Qaeda off-shoot, and Tal Afar, in the Nineveh province, was seized on Monday.

Additionally, Baquba, only 37 miles from Baghdad, was briefly over-run by the militants. ISIS have engaged the Iraqi army in Diyala and Salahuddin provinces and reportedly now control up to 75% of the Baiji oil refinery, the largest in Iraq. This oil refinery is 210 km north of Baghdad and should the militants follow-through on their threat to cut off domestic oil supplies, an already fragile domestic situation will be exacerbated.

The Kurds have benefitted from this security vacuum and the Iraqi army’s inability to secure the country. They have moved their peshmerga forces into areas claimed to historically be part of Iraqi Kurdistan and are unlikely to withdraw. The presence of the peshmerga is undoubtedly securing oil-rich Kirkuk and the Mosul dam, which provides Baghdad with its water supply, however, some critics identify this move as opportunistic.

The deteriorating security environment in Iraq has also bolstered the Kurdish region’s position with regards to its’ revenue-sharing agreement with Baghdad. The Kurdish region has been eager to identify export routes for its crude oil and on 5th June Turkey and Kurdistan signed a 50 year oil export deal.  With Baghdad facing more pressing security concerns, the Kurdish region is unlikely to face the usual backlash entailed in acting without the authorisation of the federal government.

The Kurdistan Regional Government (KRG) has actively sought export routes for its crude oil and its latest oil export deal with Turkey meets this objective. Kurdistan has proven oil reserves of 45 billion barrels, with production capacity quickly rising and expected to reach 1 million barrels per day (bpd) in 2015, compared to the current level of 400,000 bpd.

The Kurdistan Regional Government has announced the successful delivery via pipeline of the first quantities of natural gas from the gas field at Summail to fuel the Duhok Power Station (pictured).

The Summail Gas Field lies within the area of the Duhok Production Sharing Contract (PSC) and is operated by the Norwegian company DNO, which together with Anglo-Turkish PSC partner Genel Energy, signed a landmark gas sales agreement (GSA) with the KRG on 18 September 18 2013.

Long-term deliveries are expected to reach 120 million cubic feet per day sold on a take-or-pay basis for the duration of the production, showing the KRG can successfully develop its newly discovered gas assets in Kurdistan.

Under the long-term GSA, the KRG will purchase up to 120mmscf/d. Initial volumes will start at around 55mmscf/d, ramping up to 120mmscf/d within the next few months, and thereafter itis hoped that gas production will eventually rise to around 200mmscf/d.

The Duhok Power Station is a 750 MW power plant in the city of Duhok, located 40 kilometres from the field. The power station’s six turbines have been run on expensive diesel until now, due to significant delays in originally expected gas deliveries from the Khor Mor area. Each of the turbines consumes around 24 million litres per month of diesel, or around 27.50mmscf/d natural gas.

The locally-produced natural gas will displace diesel from the power station and is part of a KRG strategy to save the people of Kurdistan millions of dollars every year in costly diesel imports for power generation.

Natural Resources Minister Ashti Hawrami said that the successful commissioning of the Duhok Power Station operated by Mass Global, the Kurdistan main and feeder gas pipelines constructed by Kar Group, and the Summail gas facilities built by DNO, represented a significant step forward for the Kurdistan Region.

By John Lee.

Genel Energy has announced that it has completed its issue of $500 million of 7.5% senior unsecured bonds due 2019.

Also, ShaMaran Petroleum has announced the listing on Oslo Børs of the USD 150 million senior secured bond issued by its wholly owned subsidiary, General Exploration Partners, Inc. The bonds carry a coupon rate of 11.50 percent per annum.

(Source: Genel Energy, ShaMaran)

(Bonds image via Shutterstock)

Genel Energy has issued the following Interim Management Statement for the period from 1 January 2014 to today (Tuesday 2nd April). The statement was issued ahead of the company’ss Annual General Meeting.

PRODUCTION AND REVENUE

  • 2014 production and revenue guidance unchanged at 60,000-70,000 boepd and revenue of $500-600 million
  • Net working interest production for the first quarter averaged 50,000 bopd, an increase of 35% on Q1 2013
    • Taq Taq and Tawke averaged 81,000 bopd and 57,000 bopd respectively
  • Domestic sales realisations were $69/bbl for Taq Taq and $58/bbl for Tawke
  • Production and revenues expected to increase over the course of 2014 as the Kurdistan Region of Iraq (“KRI”) oil pipeline system comes into operation

INFRASTRUCTURE

  • The KRI pipeline commissioning process is substantially complete after compression was installed at the Khurmala Dome. Works to replace a short section of the 40 inch Iraq-Turkey pipeline in Turkey and install extra compression at Fishkabur are expected to be completed in H2 2014.

DEVELOPMENT AND APPRAISAL

  • At the Taq Taq field, the construction of the second central processing facility is progressing and is on track for completion around year end. The drilling of the first deviated and horizontal wells on the field will follow completion of the Taq Taq Deep exploration well.
  • During the quarter, two additional horizontal development wells were completed at the Tawke field and brought onstream at a combined rate of 37,000 bopd. The operator, DNO International, has outlined plans to increase field processing capacity from 100,000 bopd to 200,000 bopd by the end of 2014 through the installation of early production facilities.
  • First gas production from the Summail field development is expected shortly.

By John Lee.

Further to the recent press release from Black Diamond, the Kurdistan Regional Government has issued a statement refuting the company’s claims to have a deal to refine crude oil from Genel Energy‘s Taq Taq oil field.

Genel Energy has also denied any knowledge of, or dealings with, Black Diamond and Rezhwan.

The full text of the KRG statement is carried below:

The KRG Ministry of Natural Resources (MNR) categorically rejects as false claims by the Black Diamond Company that it has signed a deal to purchase crude oil from the Taq Taq oil field to supply a “new” refinery operated by a private Kurdish group, Rezhwan Company.

Neither Black Diamond Co., which has offices in the Philippines, nor its local joint-venture partner Rezhwan Co. are officially registered with the MNR, which has no knowledge of either company.

Genel Energy PLC, the operator of the Taq Taq field, has informed MNR that it too has no knowledge of, or dealings with, Black Diamond and Rezhwan.

Furthermore, no such “new” refinery has been licensed by MNR and it will not be allowed to operate.

MNR affirms that Black Diamond has no basis on which to make spurious and misleading public claims of crude oil purchases in the Kurdistan Region.

The Ministry will take all necessary steps to prevent the supply of crude oil to either Black Diamond or Rezhwan.