DNO: First Payment under Kurdistan Receivables Settlement

DNO ASA, the Norwegian oil and gas operator, today reported the first payment from the Kurdistan Regional Government under the recently concluded agreement covering outstanding receivables for past crude oil deliveries.

Under the agreement effective 1 August 2017, the Company was assigned the Government’s 20 percent interest in the Tawke license as well as three percent of gross Tawke license revenues payable monthly over a five-year period.

The payment of USD 4.02 million to DNO represents three percent of gross Tawke license revenues during August.

An entitlement invoice for that month’s export deliveries has been issued separately and will be shared pro-rata with Genel Energy plc upon receipt.

Following the receivables settlement, DNO’s stake in the Tawke license stands at 75 percent with Genel holding the balance.

(Source: DNO)

Federal Forces Advance on Kirkuk City

Iraqi Security Forces (ISF), Counterterrorism Services (CTS), Federal Police (FP), and Popular Mobilization Units (PMU) launched a combined offensive with intent to seize the K1 military base, Kirkuk airport, and Kirkuk’s oilfields at around 0200hrs (local) on October 16.

The offensive followed two days of failed negotiations after the government of Iraq demanded Kurdish forces withdraw from the disputed areas around Kirkuk and cede control to Iraqi federal forces.

Crisis talks on October 15 failed to resolve the standoff as Kurdish leaders refused Iraqi government demands to reject the referendum result.

Clashes were subsequently reported to have broken out between Iraqi and Kurdish forces south of the city of Kirkuk.

Iraqi state media said that federal troops had entered disputed territories occupied by the Kurds, saying they had taken control of ‘vast areas’ without opposition from the Kurdish Peshmerga.

Kurdish officials, however, denied that the Iraqi forces had been able to get close to Kirkuk city and said that the oil fields west of the city were still under Kurdish control.

The Kurdistan Region Security Council (KRSC) said in a statement that federal forces were advancing along two routes along the Taza-Kirkuk intersection and Maryam Bag Bridge, both South of Kirkuk.

Separate reports claimed artillery fire could be heard to the south of Kirkuk city in the early hours.  An initial statement by the US state department said it was ‘very concerned’ about reports of a confrontation and was ‘monitoring the situation in Kirkuk closely’.

Oil prices reported to have jumped early on October 16 amid reports of the clashes in Kirkuk.

(Source: GardaWorld)

OMV Pockets $107m from KRG Settlement

By John Lee.

Austria’s OMV has said its third-quarter clean operating result “was positively impacted” by about 90 million euro ($107 million) following a settlement over a dispute relating to the Khor Mor and Chemchemal fields in Iraqi Kurdistan.

On August 30, 2017, the Kurdistan Regional Government (KRG) and Dana Gas , Crescent Petroleum and Pearl Petroleum Company Limited reached a settlement under which the KRG agreed to immediately pay $1 billion to the consortium to settle the long-running legal dispute.

Of the EUR 90 million, OMV received approximately 60 percent as dividend from Pearl while around 40 percent was put into a dedicated accountfor future investments in Khor Mor.

(Source: OMV)

KRG Makes Payments for July Oil Exports

Genel Energy has announced that the Taq Taq field partners have received a gross payment of $10.39 million from the Kurdistan Regional Government for oil sales during July 2017.

Genel’s net share of the payment is $5.71 million.

Gross oil sales from the Taq Taq field in July 2017 averaged 14,873 bopd, including both exports and Bazian refinery deliveries.

DNO ASA, as operator of the Tawke field, has also announced that the Tawke field partners have received a payment of $39.50 million from the Kurdistan Regional Government as payment towards July 2017 crude oil deliveries to the export market from the Tawke licence. The funds will be shared pro-rata by DNO and Genel.

(Source: Genel Energy)

Iran Bans Oil Products Shipment to Iraqi Kurdistan

Iran’s Ministry of Roads and Urban Development warned companies against shipment of oil products to and from the Iraqi Kurdistan “until further notice”.

The decision is in line with Tehran’s series of measures in response to a referendum held in the semi-autonomous region on possible secession from Iraq which has drawn international criticism.

“Given the recent developments in the region, it is suitable that international transportation companies and drivers active in this field avoid loading and carrying oil products to and from the Iraqi Kurdistan Region until further notice,” a directive by the ministry’s Road Maintenance and Transportation Organization said.

“It should be noted that the consequences of any action in this regard would befall the relevant company,” it added.

The transportation is mostly carried out by tanker trucks which take crude oil from the Iraqi Kurdistan to Iran and carry back refined products to the region.

The Iraqi Kurdistan Region went ahead with its plan to hold the referendum on Monday while Iraq’s neighbors and countries in the Middle East, including Iran and Turkey, had voiced opposition to such a move and supported the Baghdad central government.

On Monday night, thousands of Kurdish people in favor of KRG’s secession from Iraq took to the streets in Erbil, with some waving Israeli flags to celebrate.

No one in the region, except Israel’s Prime Minister Benjamin Netanyahu, endorsed the referendum, and all neighbors have warned that the secession plan would bring instability to the region and disintegrate Iraq.

Pressure has been building on officials in Erbil, Kurdistan’s regional capital, over the referendum, with regional carriers, including Turkish Airlines, Egypt Air and Lebanon’s Middle East Airlines submitting to Baghdad’s request to suspend their flights serving Iraqi Kurdistan.

(Source: Tasnim, under Creative Commons licence)

Iraq seeks to collect KRG’s Oil Revenues

Iraqi Prime Minister Haider al-Abadi has hinted that his government wants to take control of revenue generated from Kurdish oil exports.

The measure is the latest of a set of actions taken by Baghdad against the Kurdistan Region for carrying out last week’s referendum that saw a 92-percent vote for independence, the first of which saw a ban in international flights to and from the Kurdish region.

Abadi said in a tweet that his government wanted to pay monthly salaries of KRG employees with money from Kurdish oil sales.  “Federal government control of oil revenues is in order to pay KR (Kurdistan Region) employee salaries in full and so that money will not go to the corrupt,” Abadi tweeted.

The Kurdistan Region has described the Iraqi-imposed flight ban, and other measures as “collective punishment,” that, among others, affect the wounded Kurdish Peshmerga who need medical treatment abroad, and Yezidi survivors of IS atrocities.

Amanj Rahim, the secretary of the Kurdistan Regional Government (KRG), told the Kurdish parliament on September 30 that the oil export through Turkey’s Ceyhan pipeline was going ahead as normal.

Separately, Prime Minister Haider al-Abadi reassured Kurdish citizens they will remain secure even as the government escalates its measure against their region’s government over the recent referendum on independence.

You are citizens of the first degree, we will not allow any harm to you and we will share our loaf of bread together,” Iraqi Prime Minister Haider al-Abadi said, addressing Kurds via twitter on September 30. “To our people in the Kurdistan region: We defend our Kurdish citizens as we defend all Iraqis and will not allow any attack on them,” Abadi added.

(Source: GardaWorld)

Turkey Threatens to Invade Iraq, Cut Off Oil Pipeline

By John Lee.

Turkish President Recep Tayyip Erdoğan (pictured) has threatened to invade Iraq, and said he could cut off the oil export pipeline from Iraq to the Turkish port of Ceyhan, following the vote supporting independence in Iraqi Kurdistan.

We have the tap,” he said. “It is done once, we close the tap.

The pipeline typically carries between 500,000 and 600,000 barrels of crude oil per day.

In a strongly-worded speech, Erdoğan said that fighting the Iraqi Kurdish bid for independence was “a matter of survival“.

His Prime Minister, Binali Yildirim, added that Ankara could take punitive measures involving borders and air space against the Kurdistan Regional Government (KRG).

Shares in Genel Energy fell 7 percent in early trading on Tuesday, but had recovered by lunchtime; Gulf Keystone Petroleum (GKP) was down 2 percent, while Norway’s DNO was 5 percent higher.

(Sources: The Independent, Alliance News, Reuters, Yahoo!)