Atrush Exceeds 50m Barrels Production

By John Lee.

ShaMaran Petroleum has announce that the Atrush block in Iraqi Kurdistan has surpassed the cumulative oil production milestone of 50 million barrels since its first oil in July 2017.

Dr. Adel Chaouch, President and Chief Executive Officer of ShaMaran, commented:

"This significant operational achievement is noteworthy as the production milestone has been achieved notwithstanding 2020's significantly reduced development program due to the global pandemic and collapse of world crude oil prices.

"This demonstrates that the Atrush joint venture has the ability to successfully navigate through the Kurdistan oil industry's difficult as well as good times."

(Source: ShaMaran Petroleum)

The post Atrush Exceeds 50m Barrels Production first appeared on Iraq Business News.

Kurdistan 2020 Oil Business “Crashed due to COVID-19”

The Kurdistan Regional Government (KRG) has released its annual oil and gas audit report for 2020, which revealed several drops in production due to the COVID-19 pandemic.

The region's total exported and consumed oil for the year stood at 165,942,861 barrels, about 5 million barrels less comparing to 2019.

The average price of oil dropped to $28.1 per barrel as global markets crashed during the second quarter, with the gross value of crude oil sold via pipelines standing at $4,443,842,235.

As of Q4 2020, $294,315,126 of KRG funds remained held in a bank account in Lebanon due to restrictions on transferring foreign currency outside the country.

The full 2020 audit report is available here:

https://gov.krd/english/information-and-services/open-data/deloitte-reports/deloitte-report-2020/

(Source: KRG)

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GKP Shares Rise on Corporate Update

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) ended the day up more than 6 percent on Friday, as the Kurdistan-focused oil producer gave an operational and corporate update:

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

"We continue to safely navigate a challenging operating environment due to COVID-19, with gross average year-to-date production of c.43,600 bopd, up almost 20% from 2020 annual average gross production. Today, we are pleased to announce that we have restarted work to complete SH-13, marking the resumption of drilling activities ahead of schedule.

"As a result, we now expect to increase gross production towards 55,000 bopd in Q4 2021 and to be at the upper end of 2021 guidance (40,000-44,000 bopd) as we continue to develop and realise the value of the Shaikan Field's substantial reserves and resources for the benefit of all stakeholders."

 55,000 bopd investment programme

  •  Successful restart of drilling activities, with commencement of SH-13 completion ahead of the previously announced schedule of Q3 2021.
  • After SH-13, SH-I will be drilled and electric submersible pumps will be installed in two existing wells.
  • Gross production is now expected to increase towards 55,000 bopd in Q4 2021, versus previous guidance of Q1 2022.

Operational

  • Continued strong safety performance, with no Lost Time Incident ("LTI") recorded for over 530 days.
  • Continuing to effectively manage the impact of COVID-19 on production operations and the resumption of drilling activities despite continued challenges on the ground.  
  • Gross average production from the field in 2021 to date of c.43,600 bopd, in line with 2021 guidance.

Financial

  • $100.8 million ($78.9 million net to GKP) received from the Kurdistan Regional Government in 2021 to date for payments of crude oil sales and recovery of outstanding arrears. 
  • As previously announced, proposing a $25 million annual dividend and $25 million special dividend, both for approval at next week's Annual General Meeting as we continue to balance investment in growth and returns to shareholders.
  • Retain a robust balance sheet, with a cash balance of $195 million as at 10 June 2021.

Outlook 

  • Expect 2021 average gross production guidance to be towards the upper end of the 40,000 to 44,000 bopd guidance range following early resumption of drilling activities.
  • 2021 guidance of $55-$65 million net capex and $2.5 to $2.9/bbl gross unit Opex remains unchanged.
  • Continuing to progress the preparation of the Field Development Plan, including the Gas Management Plan, through engagement with the Ministry of Natural Resources and other stakeholders; we will provide updates as this work progresses.

(Sources: GKP, Google)

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Increasing Oil Production at West Qurna 2

By John Lee.

Iraq's Oil Minister, Ihssan Abdul-Jabbar Ismail, has announced the start of experimental operations at the Yamamah reservoir in the West Qurna 2 oil field, with the aim of increasing output from the reservoir from 10,000 barrels per day (bpd) to 350,000 bpd.

When fully implemented, the development would bring total production at the field to 800,000 bpd.

The Minister praised the work of Russian company Lukoil, which is developing the field.

(Source: Ministry of Oil)

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Rumaila Oilfield “delivers Strong 2020 Performance”

The Rumaila Operating Organisation (ROO) has announced its 2020 performance results.

The field's oil production rate averaged 1.392 million barrels per day (bpd), despite the impact of COVID-19, a budget reduction and compliance with instructions from BOC to reduce oil production, which reflected OPEC+'s request for Iraq to curtail oil exports.

The year's strong performance has been attributed to the dedication of the field's workforce (which is 96% Iraqi) to adapt to and overcome major new challenges. These included a revised and reprioritized production strategy, which benefitted from the strong foundations laid in previous years to modernize facilities, optimize wells and deploy advanced technologies.

Basra Oil Company (BOC) Director General, Mr Khalid Hamza Abbas, said:

"Rumaila's achievements in 2020 deserve great recognition, not least within the context of the global pandemic. My thanks go to every member of staff who did his or her utmost to ensure the field continued to serve the nation at this most difficult time."

Rumaila's 2020 achievements included record-breaking levels of water injection, averaging 1.35 million bpd of water - volumes never previously seen at the field. New digital technologies were deployed to maximize efficiencies; 21 new wells were drilled, 115 wells were optimized or renewed, and almost 7,000 well services jobs were conducted to further maintain production, while preventative maintenance and repairs ensured the continued performance of ageing facilities.

In addition, new projects were initiated to reduce Rumaila's operational carbon emissions, particularly utilizing electricity from the gas-fired Rumaila Power Plant, rather than diesel generators, to power some key facilities in the field.

Rumaila also continued to support local communities living near or within the field during the pandemic, with ongoing initiatives to help the Al-Khora Primary Health Care Clinic and the North Rumaila Mobile Health Clinic; ROO also oversaw and delivered the procurement, shipping, installation and training on a computed tomography (CT) scanner for the Basra Al-Sadir Teaching Hospital. Major renovation works also took place at Al Sikak, Al Rumaila and Al Nukhaila schools in order to enhance the quality of local education.

With the onset of the pandemic, global oil demand contracted, resulting in the already low international oil price falling further and causing governments and companies around the world to review their plans. Iraq was no exception and resulted in the ROO's annual budget reduced by around 30%, with adverse impacts on some development projects and well and production-raising activities.

In addition, government-requested curtailments averaged 55,000 bpd over the course of the year, partly in response to Iraq's compliance with OPEC+'s request to reduce the country's overall oil exports.

2020 was therefore a year defined by COVID-19. It has always been ROO's commitment to place the health and safety of staff members above all other considerations. COVID-19 therefore required multiple preventative and responsive activities to limit the transmission of the virus. Field personal protective equipment (PPE) was sourced and distributed, including 300,000 sets of gloves, 20,000 masks, and 1,300 units of hand sanitizing products. Two new clinics were established; additional respiratory and life support equipment were secured; 4,370 diagnostic tests were carried out; contact tracing was instigated after each suspected and confirmed COVID-19 case, and wellbeing initiatives were introduced.

Operationally, the field had to adapt to major disruptions to the way everyday work was delivered. Field staff had to contend with working fewer, yet longer shifts patterns; movement was restricted at Rumaila headquarters which is staffed by a limited number of Iraqi and international colleagues who all adhered to strict quarantining protocols on arrival; hundreds of Iraqi and expatriate staff adapted to working from home. A new IT terminal server enabled staff working remotely in Basra and around the world to securely access emails, files and industry applications, while the number of videoconferencing users increased 960%.

ROO Deputy General Manager, Hussein Abdul Khadim Hussein, said:

"With the virus making its way to Iraq, we knew we had to do everything we could to keep our people as safe as possible while at work. We also had to move quickly, to ensure that the day-to-day operation of the entire field could be maintained, so that Rumaila could continue to deliver for Iraq. The human cost of COVID-19 has been felt by everyone at Rumaila; to everyone affected, we extend our deepest sympathies."

ROO General Manager, Orkhan Guliyev, said:

"The tremendous co-operation and teamwork between BOC, bp and PetroChina, which in previous years had been key to Rumaila surpassing targets, expressed itself in 2020 through a shared sense of resilience. The determination, dedication, patience and endurance of our people enabled us to continue to make progress during what was an extraordinarily challenging year for everyone."

Rumaila Special Deputy General Manager, Fan Jianping, added:

"It has been a difficult operating environment for national and international oil companies across the world. At Rumaila, it has been humbling to see such strength of purpose in overcoming complex challenges. 2020 has further illustrated that our partnership has the focus, fortitude and capability to face tough challenges."

(Source: ROO)

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GKP Resumes Kurdistan Investment Programme

Gulf Keystone Petroleum (GKP) has announce the resumption of the Company's growth plans to ramp-up gross production towards 55,000 barrels of oil per day ("bopd").

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

"After a year of successfully managing the impact of COVID-19 on our people and production operations at Shaikan, we are pleased to announce that we are resuming the 55,000 bopd expansion programme.

"Workstreams have already begun, and we are targeting to restart the drilling of SH-13 in Q3 2021, subject to managing the continuing impact of COVID-19 on the movement of people, services and equipment."

With support from its partner Kalegran B.V. (a subsidiary of MOL Hungarian Oil & Gas plc), Gulf Keystone has restarted 55,000 bopd expansion activity.

Considering the requirement to manage the ongoing impact of COVID-19 and to remobilise people, services and equipment, the Company currently expects drilling operations to begin in Q3 2021.

Remaining expansion activity includes completion of SH-13, which was suspended last year, drilling SH-I, the final well in the programme from the same pad, and installing electric submersible pumps in two existing wells.

Guidance for 2021 average gross production remains unchanged at 40,000 to 44,000 bopd, with the increase in gross production towards 55,000 bopd expected to occur in Q1 2022.  Remaining Capex required to deliver the 55,000 bopd programme is estimated to be $40-45 million net, resulting in total 2021 Capex of $55-65 million net.

(Source: GKP)

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Genel announces First Oil at Sarta

Genel Energy has announced first oil production from the Sarta field (Genel 30% working interest), less than 21 months after the acquisition of the stake was completed.

Production has begun at Sarta with first oil flowing from the Sarta-3 well into the Early Production Facility.

The Sarta-2 workover operation is on track to be completed in December and the well onstream from January. As previously stated, it is expected that a stable production level will be reached in Q1 2021.

Preparations for the 2021 appraisal drilling campaign, which is targeting a material portion of the 250 MMbbls of contingent resources in the Jurassic, are ongoing.

Bill Higgs, Chief Executive of Genel, said:

"First oil at Sarta is an important strategic and operational milestone for Genel, not least given the challenges presented by COVID-19 in 2020. In that context, progressing Sarta to first oil has been a tremendous achievement and a testament to the alignment and co-operation of the field partners and contractors.

"Already the only multi-licence producer in the Kurdistan Region of Iraq, the addition of Sarta further diversifies our production and cash flows. We look forward to the results of our well programme in 2021, which is designed to further appraise the potential of the field. This will enable us to work with Chevron to optimise the value of the asset in the years ahead."

(Source: Genel Energy)

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