By Adam Lucente for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Criticism mounts in Iraqi Kurdistan over unpaid teacher salaries

Ferhat is an English teacher at a public school in Erbil, the capital of Iraq’s autonomous Kurdistan Region.

His salary comes from the Kurdistan Regional Government (KRG), but five months into 2020 he has only been paid his monthly salary twice. Payment problems over the years forced him and other teachers to take on second jobs.

“It’s very difficult for us,” Ferhat told Al-Monitor. “Each one of us has to work after school to live.”

Click here to read the full story.

KRG Prime Minister Masrour Barzani on Wednesday chaired a meeting of the High Council for Investment to discuss current economic situation and the need to further develop investment in the Kurdistan Region.

In the meeting attended by Deputy Prime Minister Qubad Talabani and other cabinet members, Prime Minister Barzani stressed that the Kurdistan Regional Government (KRG) is working to build a stronger economy.

The Prime Minister also said the government will further develop agriculture, industry and tourism sectors to diversify the economy.

In that regard, the meeting also covered amendments to the investment law expected to be submitted to the cabinet for approval.

The meeting stressed that investment projects should serve the public needs and interest.

(Source: KRG)

By John Lee.

Kurdistan’s Council of Ministers has reportedly approved a proposal from the KRG’s Ministry of Electricity to privatize the Region’s electricity sector.

Ministry official Mohammed Ahmed told Rudaw on Wednesday:

“The government and the people will both benefit from it as it will help reduce a significant amount of stolen electricity.”

More here.

(Source: Rudaw)

Prime Minister Barzani chairs cabinet meeting, calls for constitutional solution to problems with Baghdad

Prime Minister Masrour Barzani chaired a cabinet meeting in Erbil on Wednesday to discuss economic conditions in the Kurdistan Region and outstanding problems with the federal government.

In the meeting, which was also attended by Deputy Prime Minister Qubad Talabani, the Prime Minister wished success to the new Iraqi cabinet, and stressed the need for a constitutional solution to ongoing issues between Erbil and Baghdad.

The cabinet discussed proposed draft bills covering the selling and renting of public properties, investment, and patients’ rights. Relevant departments in the Kurdistan Regional Government (KRG) were assigned to prepare final drafts for parliament.

Prime Minister Barzani said the Kurdistan Region is going through difficult economic times due to falling oil prices and the impact of the coronavirus pandemic, and must make adjustments due to limited financial resources.

He called for a review of the economy in light of the regional financial downturn, and underlined the importance of continuing to implement the Reform Law (2020).

The Prime Minister said the KRG will do its best to pay public sector salaries, and reiterated his commitment to continue providing public services and strengthening the region’s infrastructure.

During the meeting, Deputy Prime Minister Talabani provided an update on recent discussions with federal authorities on budgetary issues and oil exports. He said dialogue with Baghdad will continue to reach a deal on outstanding problems.

(Source: KRG)

DNO ASA, the Norwegian oil and gas operator, has announced completion of testing and appraisal of the Baeshiqa-2 exploration well in the Kurdistan Region of Iraq and the imminent spud of an exploration well on a separate prospect, Zartik, located 15 kilometers southeast on the same license.

The testing has proven oil and gas in three separate Triassic aged reservoirs. Evaluation of the test results will determine next steps towards further appraisal and assessment of commerciality.

As previously reported, in November 2019 DNO issued a notice of discovery to the government that hydrocarbons had been flowed to surface from the upper part of Triassic Kurra Chine B reservoir during first phase of testing. The reservoir produced between 900 and 3,500 barrels of oil per day (bopd) with specific gravity ranging between 40o and 52o API and sour gas between 8.5 to 15 million standard cubic feet per day (MMcfd).

Following a workover and acid stimulation, testing resumed in March 2020 in three other separate Triassic aged reservoirs with each flowing variable rates of light oil and sour gas, too.

During the second phase of testing, the lower Kurra Chine B reservoir produced between 600 to 3,500 bopd with specific gravity ranging between 47o and 55o API and sour gas between 4 to18 MMcfd. The test demonstrated that the upper and lower Kurra Chine B reservoirs are in communication, proving a hydrocarbon-bearing reservoir interval of around 150 meters.

The Kurra Chine A reservoir flowed between 950 to 3,100 bopd of 30o to 34o API and sour gas ranging from 1.8 to 3.6 MMcfd from a hydrocarbon-bearing reservoir interval of 70 meters.

The Kurra Chine C reservoir was the deepest encountered in the well covering only 34 meters of what is expected to be a thicker reservoir of around 200 meters. The drilled interval has been exposed to significant fracture damage due to the pumping of lost circulation material. The reservoir produced between 200 to 1,200 bopd of 52o API gravity and sour gas between 3.8 to 6 MMcfd.

Shallower Jurassic aged reservoirs were encountered during drilling and tested. However, the tested zones were not acid stimulated, and the results are inconclusive. The well was spud in February 2019 and drilled to a total depth of 3,204 meters (2,549 meters TVDSS), encountering almost a kilometer of fractured carbonates with poor to good oil shows. Baeshiqa-2 well was drilled safely, below budget and with all exploration objectives achieved.

The Zartik-1 well is anticipated to spud on 15 May 2020. Site construction was completed ten days ago on time and below budget.

DNO acquired a 32 percent interest and operatorship of the Baeshiqa license in 2017. Partners include ExxonMobil with 32 percent, Turkish Energy Company (TEC) with 16 percent and the Kurdistan Regional Government with 20 percent.

(Source: DNO)

By Dana Taib Menmy for Al-Monitor. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq cuts federal budget from KRG, Kurds defy it as political

Adel Abdul Mahdi’s Iraqi caretaker government in Baghdad April 16 has ordered its Finance Ministry in an official document to cut federal budget contributions to the semi-autonomous Kurdistan Regional Government in Erbil, pushing the KRG toward bankruptcy and cutting off the payment of salaries to its civil servants.

Click here to read the full story.

By Dana Taib Menmy for Al-Monitor. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq cuts federal budget from KRG, Kurds defy it as political

Adel Abdul Mahdi’s Iraqi caretaker government in Baghdad April 16 has ordered its Finance Ministry in an official document to cut federal budget contributions to the semi-autonomous Kurdistan Regional Government in Erbil, pushing the KRG toward bankruptcy and cutting off the payment of salaries to its civil servants.

Click here to read the full story.

By John Lee.

Baghdad is said to have stopped payments to the Kurdistan Regional Government (KRG).

Writing for Argus Media, Rowena Edwards says central government will also seek to recover payments made since the start of the year, in the absence of KRG transfers of crude oil, which were part of the as-yet-unsigned 2020 budget.

More here.

(Source: Argus Media)

Report on payments to governments for the year 2019

Introduction and basis for preparation

This report sets out details of the payments made to governments by Genel Energy plc and its subsidiary undertakings (‘Genel’) for the year ended 31 December 2019 as required under the Disclosure and Transparency Rules of the UK Financial Conduct Authority (the ‘DTRs’) and in accordance with our interpretation of the Industry Guidance issued for the UK’s Report on Payments to Governments Regulations 2014, as amended in December 2015 (‘the Regulations’).

The DTRs require companies in the UK and operating in the extractives sector to publicly disclose payments made to governments in the countries where they undertake exploration, prospection, development and extraction of oil and natural gas deposits or other materials.

This report is available to download at www.genelenergy.com/investor-relations/results-reports-presentations.

Governments

All of the payments made in relation to licences in the Kurdistan Region of Iraq (‘KRI’) have been made to the Ministry of Natural Resources of the Kurdistan Regional Government (‘KRG’).

Production entitlements

Production entitlements are the host government’s share of production during the reporting period from projects operated by Genel. Production entitlements from projects that are not operated by Genel are not covered by this report. The figures reported have been produced on an entitlement basis rather than on a liftings basis. Production entitlements are paid in-kind and the monetary value disclosed is derived from management’s calculation of revenue from the field.

Royalties

Royalties represent royalties paid in-kind to governments during the year for the extraction of oil. The terms of the Royalties are described within our Production Sharing Contracts and can vary from project to project. Royalties have been calculated on the same barrels of oil equivalent basis as production entitlements.

Materiality threshold

Total payments below £86,000 made to a government are excluded from this report as permitted under the Regulations.

payments to governments – 2019

Country/Licence KRI Total (1) Taq Taq (2)
Production entitlement (bbls) 2,158,407.69 2,158,407.69
Royalties in kind (bbls) 435,881.47 435,881.47
Total (bbls) 2,594,289.16 2,594,289.16
Value of production entitlements ($ million) 128.43 128.43
Value of royalties ($ million) 25.80 25.80
Capacity building payments ($ million) (3) 4.63 4.63
Total ($ million) 158.86 158.86
  1. Under the lifting arrangements implemented by the KRG, the KRG takes title to crude at the wellhead and then transports it to Ceyhan in Turkey by pipeline. The crude is then sold by the KRG into the international market. All proceeds of sale are received by or on behalf of the KRG, out of which the KRG then makes payment for cost and profit oil in accordance with the PSC to Genel, in exchange for the crude delivered to the KRG. Under these arrangements, payments are in fact made by or on behalf of the KRG to Genel, rather than by Genel to the KRG. For the purposes of the reporting requirements under the Regulations however, we are required to characterise the value of the KRG’s entitlement under the PSC (for which they receive payment directly from the market) as a payment made to the KRG. Therefore, estimated value in $millions is not paid to the KRG, and is calculated to meeting the reporting requirements under the regulations.
  2. The amount reported for Taq Taq, is the gross payment made to the KRI by the operating company (TTOPCO), Genel’s share of thesepayments is equal to 55% (withthe exception of capacity building payments).
  3. Capacity building payments reported are payments made by Genel directly to the KRI in cash as required by the PSC.

(Source: Genel Energy)

Report on payments to governments for the year 2019

Introduction and basis for preparation

This report sets out details of the payments made to governments by Genel Energy plc and its subsidiary undertakings (‘Genel’) for the year ended 31 December 2019 as required under the Disclosure and Transparency Rules of the UK Financial Conduct Authority (the ‘DTRs’) and in accordance with our interpretation of the Industry Guidance issued for the UK’s Report on Payments to Governments Regulations 2014, as amended in December 2015 (‘the Regulations’).

The DTRs require companies in the UK and operating in the extractives sector to publicly disclose payments made to governments in the countries where they undertake exploration, prospection, development and extraction of oil and natural gas deposits or other materials.

This report is available to download at www.genelenergy.com/investor-relations/results-reports-presentations.

Governments

All of the payments made in relation to licences in the Kurdistan Region of Iraq (‘KRI’) have been made to the Ministry of Natural Resources of the Kurdistan Regional Government (‘KRG’).

Production entitlements

Production entitlements are the host government’s share of production during the reporting period from projects operated by Genel. Production entitlements from projects that are not operated by Genel are not covered by this report. The figures reported have been produced on an entitlement basis rather than on a liftings basis. Production entitlements are paid in-kind and the monetary value disclosed is derived from management’s calculation of revenue from the field.

Royalties

Royalties represent royalties paid in-kind to governments during the year for the extraction of oil. The terms of the Royalties are described within our Production Sharing Contracts and can vary from project to project. Royalties have been calculated on the same barrels of oil equivalent basis as production entitlements.

Materiality threshold

Total payments below £86,000 made to a government are excluded from this report as permitted under the Regulations.

payments to governments – 2019

Country/Licence KRI Total (1) Taq Taq (2)
Production entitlement (bbls) 2,158,407.69 2,158,407.69
Royalties in kind (bbls) 435,881.47 435,881.47
Total (bbls) 2,594,289.16 2,594,289.16
Value of production entitlements ($ million) 128.43 128.43
Value of royalties ($ million) 25.80 25.80
Capacity building payments ($ million) (3) 4.63 4.63
Total ($ million) 158.86 158.86
  1. Under the lifting arrangements implemented by the KRG, the KRG takes title to crude at the wellhead and then transports it to Ceyhan in Turkey by pipeline. The crude is then sold by the KRG into the international market. All proceeds of sale are received by or on behalf of the KRG, out of which the KRG then makes payment for cost and profit oil in accordance with the PSC to Genel, in exchange for the crude delivered to the KRG. Under these arrangements, payments are in fact made by or on behalf of the KRG to Genel, rather than by Genel to the KRG. For the purposes of the reporting requirements under the Regulations however, we are required to characterise the value of the KRG’s entitlement under the PSC (for which they receive payment directly from the market) as a payment made to the KRG. Therefore, estimated value in $millions is not paid to the KRG, and is calculated to meeting the reporting requirements under the regulations.
  2. The amount reported for Taq Taq, is the gross payment made to the KRI by the operating company (TTOPCO), Genel’s share of thesepayments is equal to 55% (withthe exception of capacity building payments).
  3. Capacity building payments reported are payments made by Genel directly to the KRI in cash as required by the PSC.

(Source: Genel Energy)