By John Lee.

The Kurdistan Regional Government (KRG) has issued a report on its “Priority Humanitarian Small Scale Projects: In Health, Education, Municipality, Electricity, Social Care, Agriculture and Livelihoods and Water Sectors Kurdistan Region-Iraq 2019“.

The document presents a detailed breakdown of a total 167 priority humanitarian Small Scale Projects (SMPs) for 2019.

The focus is therefore on small-scale projects with the cost per project ranging from USD 28,000 to 1.2 million.

Download the full 39-page report here.

(Source: KRG)

KRG Prime Minister Nechirvan Barzani received Jordanian Minister of Industry, Trade, and Supply Dr. Tariq al-Hammouri, Jordanian Ambassador to Iraq Montaser Oklah, Consul General of The Hashemite Kingdom of Jordan to the Kurdistan Region Haitham Abu Alfoul, and their accompanying delegation.

Minister al-Hammouri highlighted historical relations between the Kurdistan Region and Jordan and expressed willingness to further strengthen and develop these relations, particularly in the fields of trade and banking. He also conveyed the support of His Majesty King Abdullah II of Jordan and his government to the Kurdistan Region.

Prime Minister Barzani thanked His Majesty King Abdullah II for his support to the Kurdistan Region during difficult periods, and expressed the willingness of the Kurdistan Region to strengthen relations with Jordan, particularly in the economic field. He hoped that Jordanian businessmen would take advantage of investment opportunities in the Kurdistan Region.

The post ISIS situation in the region and the crisis of displaced persons in the Kurdistan Region and refugees in Jordan were also discussed.

They also stressed the eradication of terrorism through coordination among the countries of the region and the international community.

(Source: KRG)

Pearl Petroleum Company Limited, the consortium led by Crescent Petroleum and Dana Gas of the UAE, has signed a new 20-year Gas Sales Agreement (GSA) with the Kurdistan Regional Government (KRG) to enable production and sales of an additional 250 MMscf/day that the consortium aims to produce by 2021 as part of their expansion plans in the Kurdistan Region of Iraq (KRI) in order to boost much needed local domestic electricity generation.

Pursuant to the Settlement Agreement reached between the parties in August 2017, this new gas sales agreement was signed on 19th February 2019 by Dr. Ashti Hawrami, Minister of Natural Resources on behalf of the Kurdistan Regional Government, and Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, on behalf of Pearl Petroleum.

All approvals for the agreement, including by the the Kurdistan Region Council for Oil & Gas Affairs and the Board of Pearl Petroleum, have since been granted, with  project work now under implementation.

The Kurdistan Gas Project was established in 2007 as Dana Gas and Crescent Petroleum entered into agreement with the Kurdistan Regional Government (KRG) for certain exclusive rights to appraise, develop, produce, market, and sell petroleum from the Khor Mor and Chemchemal fields in the Kurdistan Region of Iraq (KRI).

Production from the newly built plant in Khor Mor began just 15 months later, in October 2008. In 2009, Pearl Petroleum was formed as a consortium with Dana Gas and Crescent Petroleum as shareholders, and with OMV, MOL, and RWE joining the consortium subsequently with a 10% share each.

The $700 million expansion underway at the Khor Mor plant will include the addition of two new production trains at the Khor Mor plant, as well as drilling of new wells with plans to raise production from the current 400 MMscf/day to reach 650 MMscf/day by 2021 based on this latest GSA, and then to 900 MMscf/day beyond that by 2022.

This follows the 30% production increase from debottlenecking throughput at the Khor Mor plant, which brought current total production to 106,000 barrels of oil equivalent per day (boepd), making it the largest regional private sector upstream gas operation in Iraq today.

Gas sales commenced late in 2018 under a gas sales agreement signed in January of that year, and all payments have been received in a timely manner in full, which gives confidence for the investment and expansion plans currently underway by the Consortium. The Kurdistan Gas Project, which recently commemorated 10 years of continuous production, supplies natural gas from the Khor Mor field by pipeline to power plants in Bazian, Chemchemal and Erbil, as well as LPG and condensate, which are sold in the local markets.

In August 2017, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration between them, including settlement of past receivables and committing to expand their investment and operations in the region. These expansion plans include the multi-well drilling program currently underway in both the Khor Mor & Chemchemal fields, as well as installation of additional gas processing and liquids extraction facilities. The fields are operated jointly by Crescent Petroleum and Dana Gas on behalf of Pearl Petroleum.

Total investment in the Kurdistan Gas Project to date exceeds $1.6 billion, with total cumulative production of over 260 million barrels of oil equivalent (boe), delivering billions of dollars in fuel cost savings and wider economic benefits for the Kurdistan Region and Iraq as a whole. That impact will continue to grow as production capacity expands in the coming years.

Dr. Ashti Hawrami, Minister of Natural Resources of the Kurdistan Regional Government (KRG) said:

“This agreement is an important step for us as we deliver improved services to the people of the Kurdistan Region of Iraq through enhanced electricity generation from the increase in gas production by the Consortium. The Kurdistan Region holds significant reserves of gas and the KRG is committed to playing a positive role in the growing gas and electricity needs of Iraq and the region.”

Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:

“This gas sales agreement opens a new chapter in the expansion of the Kurdistan Gas Project that will see a further investment of over $700 million in coming years to expand production up to 900 MMscf/day, further fueling the Region’s economic growth and development. We look forward to developing the significant resources from these important fields, for the benefit of the Kurdistan Region and all of Iraq.”

Dr. Patrick Allman-Ward, CEO of Dana Gas, added:

“Dana Gas and our partners in Pearl Petroleum are particularly proud to be investing further in the gas sector of the Kurdistan Region of Iraq, delivering a reliable source of cleaner energy, and supporting local economic development.  The continuing receipt of payments in a timely manner gives confidence for our continued investment commitment as we enter our second decade of production.”

As part of its work in the KRI, Pearl has implemented a corporate social responsibility program to support local communities, including providing school supplies, drinking water treatment, generators and fuel enabling 24-hour electricity for local villages, mobile medical units, and youth sports facilities, as well as financial support for 1,000 orphans from the Chemchemal area in partnership with a local charity Foundation.

These initiatives are assisting the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital.

(Source: Dana Gas)

By John Lee.

The Kurdistan Democratic Party (KDP) and Patriotic Union of Kurdistan (PUK) have reportedly signed a four-year political agreement which includes measures to speed up the formation of the new Kurdistan Regional Government (KRG).

According to a report from Rudaw, KDP deputy president Nechirvan Barzani and the PUK’s acting leader Kosrat Rasul Ali signed the cooperation deal in Erbil on Monday afternoon.

It adds that the deal was welcomed by the Change Movement (Gorran), which struck its own deal with the KDP on 16th February.

More here.

(Source: Rudaw)

By John Lee.

Genel Energy has announced that approval has been given by the Kurdistan Regional Government (KRG) regarding the acquisition of stakes from Chevron in the Sarta and Qara Dagh (pictured) blocks, in the Kurdistan Region of Iraq.

According to a statement from the company, the acquisitions have now closed and Genel therefore has 30% equity in the Sarta PSC, with Chevron holding 50% and the KRG the remaining 20%. Final investment decision relating to Sarta phase 1A development has now been taken.

Phase 1A begins with two wells, recompleting the Sarta-2 well and placing the Sarta-3 well on production, both of which flowed approximately 7,500 bopd on test, and the construction of a central processing facility with a 20,000 bopd capacity. Another well is expected to follow within twelve months of first oil, and further production capacity will be added as the field is developed and production ramps up. First oil is expected in 2020, with a total cost to Genel estimated at $60 million to the end of 2020.

Genel has booked an initial 10 MMbbls of net 2P reserves relating solely to this preliminary phase of the project. Unrisked gross mid case resources relating to the Mus-Adaiyah reservoir only are estimated by Genel at c.150 MMbbls, with overall unrisked gross P50 resources currently estimated by the Company at c.500 MMbbls.

Genel now holds 40% equity in the Qara Dagh PSC and is the operator, with Chevron holding 40% and the KRG the remaining 20%. Work is underway on assessing the optimal location for the Qara Dagh-2 well, which is set to be drilled in 2020. Unrisked gross mean resources at Qara Dagh are currently estimated by Genel at c.200 MMbbls.

Shares in Genel Energy have risen 9 percent over the past 24 hours.

(Sources: Genel Energy, Yahoo!)

Deloitte report on Oil and Gas review in the Iraqi Kurdistan Region – Q3 of 2018

On Wednesday, the KRG Regional Council for Oil and Gas Affairs has published new verified data on the Kurdistan Region’s oil exports, consumption and revenues, covering the period from 1 July 2018 to 30 September 2018, after a review of the sector by the international “Big 4” audit and consulting firm, Deloitte.

The Regional Council for Oil and Gas Affairs acknowledges the positive feedback received from stakeholders, including the international community, and reiterates its commitment to the people of Kurdistan that the two international audit firms, Deloitte and Ernst & Young, will continue to independently review the oil and gas sector, inclusive of all the streams.

Deloitte’s report for the third quarter of 2018 is accessible through this link (PDF), in Kurdish, Arabic and English.

Frequently asked questions handbook (PDF) in Kurdish, Arabic and English to help readers better understand different sections of the report.

(Source: KRG)

By John Lee.

The Kurdish Regional Government (KRG) has reportedly suspended oil exports to Iran.

According to Anadolu Agency, the KRG’s Ministry of Finance and Economy did not specify a reason for the move, and “it remains unclear whether the suspension is linked to U.S. sanctions on Iran.

(Source: Anadolu Agency)

(Source: Tasnim, under Creative Commons licence)

By Fazel Hawramy for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

For about 10 years, the Kurdistan Democratic Party (KDP), which controls Erbil and Dahuk provinces in Iraq, has enjoyed close working relations with the Turkish government on trade, energy and security. The main architect of this opening has been the KDP’s Nechirvan Barzani.

The KDP, unlike other Iraqi Kurdish groups, has also acted as a counterweight since the 1990s to the formidable Kurdistan Workers Party (PKK) guerrilla movement — Turkish President Recep Tayyip Erdogan’s archenemy — by allowing Turkey to establish a number of military bases to monitor PKK activities.

However, Barzani, prime minister of the Kurdistan Regional Government (KRG) since 2012, was not nominated by the KDP to form the next KRG Cabinet. This is causing Erdogan to worry about the fate of a 50-year secretive energy deal made with Barzani in 2014.

Click here to read the full story.

By John Lee.

The head of Iraqi Kurdistan’s Board of Tourism has reportedly said that tourism is expected to “approach” 15 percent of gross domestic product (GDP) by 2025.

Mawlawi Jabar Wahab told Rudaw that this would be roughly double the sector’s current size.

Visitor numbers are now beginning to climb once more, topping three million in 2018.

More here.

(Source: Rudaw)

The Kurdistan Regional Government (KRG) in northern Iraq is torturing children to confess to involvement with the Islamic State (ISIS), according to Human Rights Watch (HRW).

Children told Human Rights Watch that in 2017 and 2018, security officers, known as Asayish, used beatings, stress positions, and electric shock on boys in their custody. Most said they had no access to a lawyer and they were not allowed to read the confessions Asayish wrote and forced them to sign.

More here.

(Source: HRW)