By John Lee.

UAE-based Crescent Petroleum is reportedly planning a significant increase in its production of natural gas at its Pearl Petroleum operations in Iraq.

President Badr Jafar (pictured) is quoted as saying that there will be an investment of $1 billion to boost production to 500 million cubic feet of gas per day by 2020, up from about 330 million cubic feet  and about 20,000 barrels per day of condensates at present.

According to Reuters, Pearl is owned 35 percent by Crescent Petroleum, 35 percent by Crescent’s affiliate Dana Gas, 10 percent by Austria’s OMV, 10 percent by Germany’s RWE, and 10 percent by Hungary’s MOL.

(Sources: Gulf News, Reuters)

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)

By John Lee.

MOL Hungarian Oil and Gas Plc has announced that, in agreement with its partners Gulf Keystone Petroleum (GKP) and the Kurdistan Regional Government’s Ministry of Natural Resources, it has decided to relinquish the Akri-Bijeel Block in the Kurdistan Region of Iraq.

The cpmpany said its decision was based on a comprehensive assessment of the block potential, and said it remains committed to maximizing the value of its investments in the Kurdistan Region of Iraq, among others in the Shaikan Block.

(Source: GKP)

By John Lee.

Dana Gas has announced that the London Court of International Arbitration (LCIA) has ordered the Kurdistan Regional Government (KRG) to pay $1.98 billion to a consortium that it leads.

In a statement to the Abu Dhabi stock exchange, the Sharjah-based company claims that the judgement is final, binding and internationally enforceable, and that payment must be made within 28 days.

The claims relate to payment for production at the Khor Mor and Chemchamal gas fields.

Meanwhile, the KRG has hit back, pointing out that the court has yet to hear its counterclaims, provisionally quantified by the KRG’s experts at more than $3 billion, and accusing the consortium of creating “an impression that is materially misleading and incomplete”.

Shares in Dana Gas have risen 17 percent, on heavy volume, since the announcement.

(Sources: Dana Gas, KRG, Reuters, BasNews)

The UK’s High Court has ordered the Kurdistan Regional Government (KRG) to pay a consortium led by Dana Gas $100 million within 14 days.

In a statement, the KRG’s Ministry of Natural Resources said:

“The Court’s decision does not relate to the substantive merits of the claims and counterclaims in the on-going arbitration between the KRG and Dana Gas PJSC, Crescent Petroleum Company International Limited and Pearl Petroleum Company Limited (collectively, “the Claimants”).

“The order relates to an interim payment of $100 million decided by the Tribunal last year on a provisional and reversible basis, because of the purportedly precarious financial condition of Dana.”

BasNews reports that the consortium, which consists of the UAE’s Crescent Petroleum, Austria’s OMV and Hungary’s MOL alongside Dana Gas, first sought payment for production in October 2013, and the subsequent disputes are a result of non-payment.

The KRG statement accuses the consortium of failing to try to reach an agreement: “

“The KRG feels that this further escalation was unnecessary and could have been avoided. Dana was fully aware of KRG’s financial difficulties and its need to maintain its effective fight against ISIS terrorism and support for the more than 1.8 million refugees and internally displaced persons in the Kurdistan Region.

“Regrettably, rather than working constructively with the KRG to find a way forward in the light of the prevailing circumstances as other International Oil Companies have done, Dana maintained its aggressive stance and pursued its application to the Court.”

(Source: Dana Gas, KRG, BasNews)

(Picture: Dana Gas facility in Iraqi Kurdistan)

By John Lee.

Wood Group Intetech (WG Intetech) has successfully completed a six-month project for Hungary’s MOL Group, which saw WG Intetech develop a detailed design for an acid gas reinjection well on MOL’s Akri-Bijeel field in Iraq.

The scope of the agreement included well design and comprehensive materials selection for all well components.

Dr Liane Smith (pictured), Managing Director and Founder of WG Intetech, said:

“Acid gas reinjection involves handling high pressure gas with a high concentration of hydrogen sulphide … This can lead to an increased safety risk if the correct materials are not selected at the design stage, and requires an intense focus on achieving well integrity. There are currently very few companies in the world that offer this level of experience.”

(Source: Wood Group Intetech)

By John Lee.

Sharjah-based Dana Gas and its consortium partners, Crescent Petroleum and Pearl Petroleum, is pursuing $100 million (117 billion Iraqi dinars) in payments from the Kurdistan Regional Government (KRG).

In a statement to the Abu Dhabi Securities Exchange (ADX), the company said:

“The LCIA [London Court of International Arbitration] Tribunal recently ordered the KRG to pay the Consortium US$100 million within a timeframe of 30 days by way of a second interim order.

“In default of its legal obligations, the KRG failed to make payment by the stipulated deadline of 17th November 2014 and as a
consequence, the Tribunal’s order became peremptory in nature, enabling its enforcement by the English Court.

“With the Tribunal’s permission, on 12th December 2014, an application to the English Court has been made for enforcement of the order, with the prospect of sanctions being imposed on the KRG for non-compliance.”

But the company said that despite this, and a further multi-billion-dollar claim for breach of contract, which is due to be heard in April of next year, it remains committed to working in the Kurdistan and Iraq, adding:

“[We] sincerely hope that all outstanding contractual matters with the KRG be resolved, amicably and in good faith in the shortest possible time, within the contractual framework”.

“This will in turn enable the full and proper development of the Khor Mor and Chemchemal fields as envisaged by the Contract, for the benefit of the people of the Kurdistan region and all of Iraq.”

(Source: Dana Gas)

(Picture: Dana Gas operations in Iraqi Kurdistan)

From ProactiveInvestors. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Alexander Dodds, executive vice president of exploration and production at Hungary-based MOL Group, talks about finding the balance between high risk exploration and declining oil production.

Dodds says Kurdistan is the most important region to the company due to its size.

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) gained another 19 percent on Thursday morning, following approval of its Field Development Plan (FDP) for Akri-Bijeel, in which it holds a 20 percent working interest.

The FDP is based on these two discovery areas, i.e. Bijell area and the Bakrman area. The development will be done in two phases, phase one objective is to allow the Operator to better determine key factors such as the reserves base, recovery factor, optimum surface facility design and overall field development cost.

Phase I will start immediately with 4 drilling rigs and 1 work over rig to help reduce the overall timeline with front-end-loading wherever possible for Phase II.

John Gerstenlauer  (pictured), Chief Executive Officer of Gulf Keystone, commented:

“The approval of the Field Development Plan for the Akri-Bijeel Block is a culmination of years of exploration and appraisal, which will now lead to a development phase and production in due course. It is an important milestone for all stakeholders in the Akri-Bijeel project.”

This comes a day after a 14 percent rise in the share price after the company announced a postponement of its interim management statement.

(Sources: GKP, Yahoo!)

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) gained another 19 percent on Thursday morning, following approval of its Field Development Plan (FDP) for Akri-Bijeel, in which it holds a 20 percent working interest.

The FDP is based on these two discovery areas, i.e. Bijell area and the Bakrman area. The development will be done in two phases, phase one objective is to allow the Operator to better determine key factors such as the reserves base, recovery factor, optimum surface facility design and overall field development cost.

Phase I will start immediately with 4 drilling rigs and 1 work over rig to help reduce the overall timeline with front-end-loading wherever possible for Phase II.

John Gerstenlauer  (pictured), Chief Executive Officer of Gulf Keystone, commented:

“The approval of the Field Development Plan for the Akri-Bijeel Block is a culmination of years of exploration and appraisal, which will now lead to a development phase and production in due course. It is an important milestone for all stakeholders in the Akri-Bijeel project.”

This comes a day after a 14 percent rise in the share price after the company announced a postponement of its interim management statement.

(Sources: GKP, Yahoo!)