Iraq Oil Exports Rise in February

By John Lee.

Iraq's Ministry of Oil has announced initial oil exports for February of 82,877,757 barrels, giving an average for the month of 2.960 million barrels per day (bpd), up from the 2.868 million bpd exported in January.

These exports from the oilfields in central and southern Iraq amounted to approximately 79,105,329 barrels, while exports from Kirkuk amounted to 3,727,428 barrels.

Revenues for the month were $5.027 billion at an average price of $60.330 per barrel.

January's export figures can be found here.

(Source: Ministry of Oil)

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Fourth Oil Exec Jailed for Iraq Bribery

Paul Bond has today been sentenced to three and half years' imprisonment for conspiring with others to bribe Iraqi public officials to secure lucrative oil contracts in post-occupation Iraq.

Earlier this week, Bond, a former senior sales manager at SBM Offshore (SBM), was found guilty on two counts of conspiracy to give corrupt payments following a retrial of his case at Southwark Crown Court.

This was the fourth conviction the SFO secured in its wide-scale Unaoil bribery investigation, which uncovered the payment of over $17m worth of bribes to secure $1.7bn worth of contracts for Unaoil and its clients.

In 2007, the Iraqi Ministry of Oil set out a 'master plan' to rebuild Iraq's oil infrastructure, which had been destroyed after years of conflict. The post-occupation government tasked the state-owned South Oil Company (SOC) to commission the construction of new oil pipelines and the installation of single offshore mooring buoys (SPMs) in the Persian Gulf.

Together with Unaoil employees, Paul Bond funnelled $900,000 in bribes to Iraqi public officials at the SOC and the Ministry of Oil, which bought access to sensitive information, allowing Bond and others to skew the tendering process in SBM's favour. SBM went on to win a $55m contract for the provision of SPMs.

Lisa Osofsky, Director of the Serious Fraud Office, said:

"Bond and his co-conspirators manipulated the tendering process for an infrastructure project vital to Iraq's developing economy, with no regard for the impact.

The string of convictions in this case demonstrate the SFO's determination to root out and prosecute corrupt practices in all corners of the globe working with law enforcement partners across the world. "

Bond's conviction follows that of former Unaoil territory managers Stephen Whiteley and Ziad Akle, who were last year found guilty of conspiring to bribe Iraqi public officials to secure substantial oil contracts. In July 2019, Basil Al Jarah, Unaoil's former Iraq partner, pleaded guilty to five counts of conspiracy to give corrupt payments, and later asked for a number of additional offences to be taken into consideration, in total admitting to paying over $17m in bribes to secure contracts worth $1.7bn.

Ziad Akle was sentenced to five years' imprisonment, Stephen Whiteley to three years' imprisonment, and Basil Al Jarah to three years and four months' imprisonment for their crimes.

The SFO would like to thank the Australian Federal Police, the French Parquet National Financier, the Police Judiciaires of the Principality of Monaco, the Fiscal Information and Investigation Service (FIOD) of the Netherlands, the United States Department of Justice, Greater Manchester Police, the Metropolitan Police, the National Crime Agency and West Mercia Constabulary for their valuable assistance in this case.

More here.

(Source: SFO)

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Iraq “Pauses Oil Pre-Payment deal with China”

By John Lee.

Iraq has reportedly "put on hold" it oil contract with China's Zhenhua Oil.

The multi-billion-dollar agreement would have seen Zhenhua pre-pay Iraq's State Oil Marketing Organization (SOMO) for a regular supply of crude oil.

Oil prices have risen significantly since the deal was struck.

More here.

(Source: S&P Global)

The post Iraq "Pauses Oil Pre-Payment deal with China" first appeared on Iraq Business News.

Iraqi Cabinet approves New “Alternative Energy” Power Plants

By John Lee.

The Iraqi Cabinet has agreed to approve a recommendation from the National Investment Commission (NIC) for the Ministry of Electricity to proceed with an investment project for the construction of seven "alternative energy" power plants.

The new power stations are to be built in Karbala, Wasit, Babylon, and Al-Muthanna provinces.

(Source: Govt of Iraq)

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Genel Energy Updates on Oil Reserves

Genel Energy has issued an update on oil reserves and resources across its portfolio.

Bill Higgs (pictured), Chief Executive of Genel, said:

"The quality of our reserves is the foundation of our resilient business model, providing us with low-cost production that can generate cash for many years to come.

"Drilling at Sarta this year has the potential to add to our reserves, with Qara Dagh adding the possibility of opening up another field in the Kurdistan Region of Iraq, as we look to further build our cash generative portfolio for the benefit of all stakeholders."

Net oil reserves (MMbbls) 1P 2P 3P
31 December 2019 68.8 123.8 194.9
Production (11.7) (11.7) (11.7)
Technical revisions 12.2 5.0 (6.0)
31 December 2020 69.4 117.2 177.2

International petroleum consultants DeGolyer and MacNaughton assess that, at the Tawke field on the Tawke licence (Genel 25% working interest), gross year-end 2020 1P reserves stood at 173 MMbbls, compared to 176 MMbbls at year-end 2019, after adjusting for production of 21 MMbbls and an upward technical revision of 18 MMbbls. Tawke field 2P reserves stood at 245 MMbbls (261 MMbbls at end-2019) and 3P reserves at 359 MMbbls (376 MMbbls at end-2019).

The Enhanced Oil Recovery project at the Tawke field has started to deliver a positive impact on production. Pending further work on the project, the 23 MMbbls of 2P and 45 MMbbls of 3P gross reserves that DeGolyer and MacNaughton previously included in their figures continues to be maintained by Genel in 2C and 3C resources.

At Peshkabir, also on the Tawke licence (Genel 25% working interest), year-end 2020 gross 1P reserves were assessed at 61 MMbbls (51 MMbbls at end-2019), 2P reserves at 116 MMbbls (125 MMbbls at end-2019) and 3P reserves at 201 MMbbls (220 MMbbls at end-2019). The upward revision of 1P and 2P reserves by 29 MMbbls more than offsets production of 19 MMbbls, and is the result of continued outstanding field performance in 2020.

At Taq Taq (44% working interest, joint operator), 1P gross reserves stood at 18 MMbbls at year-end 2020 (20 MMbbls at end-2019), following a minor technical upward revision of 1 MMbbls and production of 4 MMbbls. Gross 2P reserves stood at 33 MMbbls (44 MMbbls at end-2019), with a downward revision of 8 MMbbls following a reduction to the number of wells planned for the future, and their associated expected productivity. McDaniel & Associates carried out the independent assessment of the Taq Taq licence.

Genel's gross 2P reserve estimate relating to Phase 1A of the Sarta development remains unchanged at year-end 2020, standing at 34 MMbbls.

CONVERTING RESOURCES TO RESERVES

Net oil resources (MMbbls) 1C 2C 3C
31 December 2019 66.5 152.0 345.8
Technical revisions (8.6) (8.6) (8.0)
31 December 2020 57.9 143.4 337.8

There has been no change to the ERCE view on Sarta (30% working interest), with an estimated mid-case total recoverable oil resource of 593 MMbbls, of which 258 MMbbls are classified as 2C resource. Production performance in 2021, and the results of the upcoming three well campaign in 2021, will inform the quantity of conversion of these resources into reserves.

At Qara Dagh (40% working interest, operator) the QD-2 well will test the crestal portion of the prospect, which has a mean prospective resource estimated by Genel at c.400 MMbbls. Genel continues to estimate that the downdip segment tested by the QD-1 well defines a 2C resource of 47 MMbbls.

(Source: Genel Energy)

The post Genel Energy Updates on Oil Reserves first appeared on Iraq Business News.

GKP issues Update on Shaikan Field

Gulf Keystone Petroleum (GKP) has provided a Competent Person's Report ("CPR") update on the Shaikan Field in which it has an 80% working interest.  

The CPR, an independent third-party evaluation of the Company's reserves and resources as at 31 December 2020, was prepared by ERC Equipoise ("ERCE").

Jon Harris, Gulf Keystone's Chief Executive Officer, said:

"The updated CPR demonstrates the continuing long-term strong performance of the Shaikan Field with gross 2P+2C reserves and resources volumes in line with the 2016 CPR, after adjusting for production over the period.   

"Prior Company estimates are reaffirmed with gross 2P+2C reserves and resources of c.800 MMstb at 31 December 2020, including over 500 MMstb of gross 2P reserves.  

"We have a deep understanding of the Shaikan Field that has produced over 80 MMstb to date and are pleased that the latest CPR matches our interpretation and understanding of the geological model, underlining the considerable untapped potential of the field."

"We had a strong start to the year in January, which saw GKP's highest monthly average daily gross production of 44,405 bopd.  As conditions continue to improve, we look forward to resuming the 55,000 bopd expansion project and shareholder distributions."  

Highlights

  • The CPR incorporates significant incremental information, including an updated development plan, new wells, production data and further technical analysis, since the last CPR was prepared by ERCE in 2016.
  • Gross 2P reserves + 2C contingent resources1 of 798 MMstb2 at 31 December 2020 are consistent with volumes as at 31 December 2019, adjusted principally for 2020 production.
  • Gross 1P reserves increased to 240 MMstb, up 33% after adjusting for 2020 production.
  • Gross 2P Jurassic reserves were revised down marginally (2%) to 505 MMstb, after adjusting for 2020 production. 
  • Gross 2P Triassic and Cretaceous reserves of 47 MMstb were reclassified to gross 2C contingent resources1, while the Field Development Plan is progressed with the Ministry of Natural Resources.
  • Shaikan continues to deliver stable production with average gross production in January of 44,405 bopd, the highest monthly average to date from the field.
  • The Shaikan Field has significant future production potential with a gross 1P reserves life index3 of c.15 years and a gross 2P reserves life index3 of over 31 years, assuming January 2021 production levels.

Gross reserves and resources based on the Company's estimates at 31 December 2019 and the CPR at 31 December 2020 were:

31 December 2020

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

  Reserves

Resources

Jurassic

240

505

80

585

Triassic

-

-

157

157

Cretaceous

-

-

56

56

Total - Gross

240

505

293

798

31 December 2019

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

  Reserves

Resources

Jurassic

  175

  531

  80

  611

Triassic

  18

  44

  106

  150

Cretaceous

  1

  3

  53

  56

Total - Gross

  194

  578

  239

  817

The reconciliation of changes in reserves and resources between the Company's estimates at 31 December 2019 and the CPR at 31 Decemer 2020 is as follows:

 

 

1P

2P

2C 1

2P+2C 2

Gross (MMstb)

  Reserves

Resources

31 December 2019

  194

  578

  239

  817

Production

(13)

(13)

  - 

(13)

Reclassifications

(19)

(47)

  +47

  - 

Revisions

  +78

(13)

  +7

(6)

31 December 2020

  240

  505

  293

  798

GKP's 80% net WI4 share of reserves and resources at 31 December 2020 were: 

1P

2P

2C 1

2P+2C 2

Formation (80% WI) (MMstb)

  Reserves

Resources

Jurassic

  192

  404

  64

  468

Triassic

  - 

  - 

  125

  125

Cretaceous

  - 

  - 

  45

  45

Total - Net WI

192

404

  234

638

1.  Contingent resources volumes are classified as such because there is technical and commercial risk involved with their extraction. In particular, there may be a chance that accumulations containing contingent resources will not achieve commercial maturity. The 2C (best estimate) contingent resources presented are not risked for chance of development.

2.  Aggregated 2P+2C estimates should be used with caution as 2C contingent resources are commercially less mature than the 2P reserves.

3.  Reserves life index is calculated as gross 1P reserves or gross 2P reserves, as appropriate, divided by annualised January 2021 gross production.

4.  Net working interest reserves and resources do not represent the net entitlement resources under the terms of the PSC.

 (Source: GKP)

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DNO Adds New Oil Reserves

DNO ASA, the Norwegian oil and gas operator, has announced it replaced 87 percent of 2020 production through additions to its proven (1P) reserves notwithstanding reduced activity in the wake of low oil prices.

In the Kurdistan region of Iraq, the Company replaced 111 percent of last year's production through additions to 1P reserves.

Yearend 2020 Company Working Interest (CWI) 1P reserves totaled 201 million barrels of oil equivalent (MMboe) compared to 206 MMboe at yearend 2019, after adjusting for 35 MMboe of production and 30 MMboe of upward technical revisions.

DNO exited the year with 332 MMboe of CWI proven and probable (2P) reserves and 507 MMboe of CWI proven, probable and possible (3P) reserves. DNO's CWI contingent (2C) resources stood at 152 MMboe.

At yearend 2020, DNO's 1P reserves life stood at 5.8 years, its 2P reserves life at 9.6 years and its 3P reserves life at 14.6 years; all were up slightly from 2019 levels.

On a gross basis, yearend 1P reserves at the Tawke license in Kurdistan containing the Tawke and Peshkabir fields climbed to 234 million barrels of oil (MMbbls) from 228 MMbbls a year earlier. Tawke license 2P reserves stood at 394 MMbbls at yearend 2020 (400 MMbbls in 2019) and 3P reserves at 605 MMbbls (641 MMbbls in 2019).

Across its North Sea portfolio at yearend 2020, on a CWI basis, DNO's 1P reserves stood at 41 MMboe, 2P reserves at 64 MMboe and 3P reserves at 96 MMboe. The Company's North Sea 2C resources totaled 120 MMboe.

At yearend 2020 and on a gross basis, at the Baeshiqa license in Kurdistan containing two large structures with multiple independent stacked target reservoirs, 2C resources stood at 43 MMbbls, following successful drilling and testing of the exploration Baeshiqa-2 and Zartik-1 wells. No reserves were recorded at the Baeshiqa license at yearend 2020 pending conclusion of the ongoing appraisal activities to determine commerciality.

"All things considered, from a reserves replacement perspective DNO had a stellar year in 2020 notwithstanding the sharp cuts in our spend and the challenges of keeping operations going in the face of Covid restrictions in movement of our people, contractors and supplies," said Bijan Mossavar-Rahmani, DNO's Executive Chairman.

International petroleum consultants DeGolyer and MacNaughton (D&M) carried out an independent assessment of the Tawke and Baeshiqa licenses in Kurdistan. Gaffney, Cline & Associates (GCA) carried out an independent assessment of DNO's licenses in Norway and the United Kingdom.

(Source: DNO)

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Iraq plans 20GW Solar Power by 2030

By John Lee.

Iraq's Minister of Oil has his Ministry's goal is to support the Ministry of Electricity to have 20 gigawatts of solar energy capacity installed by 2030.

In a promotional video issued by the Government of Iraq, Ihsan Abdul Jabbar added that the recently-announced partnership with French energy company Total will include the production of clean solar energy in Southern Iraq.

He said the Ministry was in discussion with other oil producers, including BP, to use their sites to produce solar power.

(Source: Govt of Iraq)

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Iraq receives First Batch of Turkish Rail Tankers

By John Lee.

Iraq has reportedly taken delivery of its first batch of rail tankers from Turkey.

According to Daily Sabah, the first 50 units, manufactured by Cryocan, were sent by truck, with a further 400 units still to be made.

The tankers will be used by Iraq Republic Railways (IRR) to transport oil and fuel.

More here.

(Source: Daily Sabah)

(Stock image via Pixabay)

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Video: Where has Iraq’s Oil Wealth gone?

From Al Jazeera. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Decades of plundering: Where has Iraq's oil wealth gone?

Ranked as the fourth-biggest oil producer in the world, many would assume that Iraq has the financial resources to weather the pandemic.

But that is not the case - its fragile economy is struggling to cope and it may turn to the International Monetary Fund for assistance.

It has already devalued its currency by almost a fifth, enabling it to eke out more dinars for dollars. Ahmed Tabaqchali, the chief investment officer of AFC Iraq Fund, helps explain where all of Iraq's money goes:

The post Video: Where has Iraq's Oil Wealth gone? first appeared on Iraq Business News.