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DNO “Steps Up Activity”

DNO ASA, the Norwegian oil and gas operator, today reported stepped up investments across its portfolio on the back of higher production and significantly improved liquidity outlook as the Company recovers from the oil market turmoil that upended the second quarter of 2020.

Operated production in July at the Company’s flagship Tawke license in the Kurdistan region of Iraq is up 15,000 barrels of oil per day (bopd) month-on-month to 115,000 bopd following a well intervention campaign fast tracked in June with the stabilization of oil prices and improved export payment terms.

In the North Sea segment, DNO projects receipt of USD 215 million in tax refunds in the second half of the year, including USD 70 million from the recently announced temporary changes to petroleum taxation in Norway.

“The worst of the coronavirus pandemic hit to our business is behind us and DNO is back identifying and capturing opportunities,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “Still, we are prepared to act quickly, as we did in March, if a strong second wave comes,” he added.

Second quarter Company Working Interest (CWI) production stood at 89,700 barrels of oil equivalent per day (boepd) of which Kurdistan contributed 71,900 bopd and the North Sea 17,800 boepd.

Gross operated Tawke license production averaged 102,000 bopd, including 58,100 bopd from the Tawke field and 43,900 bopd from the Peshkabir field, together down 11 percent from the first quarter as development activity dropped off to preserve cash at a time of historically low and uncertain oil prices.

Second quarter revenues slid to USD 72 million and operating losses climbed to USD 81 million, both driven by weak commodity prices across the portfolio and lower cargo liftings of produced oil in the North Sea.

At the Baeshiqa license in Kurdistan, DNO continued drilling the third exploration well on a second structure (Zartik) some 15 kilometers southeast of the Baeshiqa-2 discovery well. The rig has been released and testing will commence in August in Lower Jurassic and Upper Triassic zones intersected by the well and expected to last three months. Evaluation of the Baeshiqa-2 results is ongoing to determine commerciality.

During the first half of 2020 DNO received a total of USD 224 million in payments from the Kurdistan Regional Government. In addition, the Company received a USD 23 million June entitlement payment after the end of the reporting period. Discussions are ongoing to reach an agreement on acceptable terms and timing of payment of arrears totaling USD 240 million due to DNO for the November 2019-February 2020 entitlements and November 2019-June 2020 override payments.

Notwithstanding the interruption of these payments and DNO’s repayment of the remaining USD 138.5 million of the DNO01 bond at maturity on 18 June 2020, the Company exited the first half of 2020 with a strong cash balance of USD 427 million. Net debt at the end of the second quarter stood at USD 537 million, down from USD 559 million at the end of the first quarter.

Last month, DNO commissioned the Peshkabir-to-Tawke gas reinjection project, the first enhanced oil recovery project in Kurdistan, to unlock additional oil volumes at Tawke while significantly reducing gas flaring and CO2 discharges at Peshkabir.

Prompted by the tax changes in Norway, the Company is working with partners to accelerate infill drilling at the Ula, Tambar and Brage producing fields, revisit development options for the Brasse field and actively evaluate the Iris/Hades, Fogelberg and Trym South discoveries.

DNO will remain an active explorer in the North Sea, targeting 4-6 wildcat wells a year.

(Source: DNO)

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KfW Bank supports Construction of 4 Hospitals in Iraq

The number of cases of COVID-19-infected persons is also rapidly increasing in Iraq. The peak of the disease is expected in autumn. At least four new hospitals are to be built in the country’s largest cities by then.

KfW is financing the construction on behalf of the German government with an initial amount of EUR 15 million. The contract was signed 23 July 2020.

At the end of April lockdown and corona restrictions were lifted in Iraq. Since then the number of cases has risen sharply. A peak in infections is expected in autumn, which will overburden the infrastructure of the health care facilities.

By then, almost 50,000 beds in hospitals, including 12,000 intensive care beds, will be needed for the treatment of COVID-19 patients alone. In Iraq, however, there are only just under 50,000 hospital beds at all, including about 700 intensive care beds.

To support the Iraqi health system KfW is financing the construction of at least four hospitals on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) with an initial EUR 15 million. It is being examined whether further hospitals can be financed in a further phase.

A simulation of the course of infection according to a WHO model showed that the conurbations will suffer the highest case numbers. Therefore, four hospitals are planned in the major cities of Baghdad, Basra, Niniveh and Süleymaniye.

They will initially be built as temporary hospitals in modular prefabricated construction, but in the long term they can serve as regular hospitals. Each hospital will have 100 beds, including 40 intensive care beds. In the short term, more than 7,000 patients will benefit directly. But the separate treatment of COVID-19 patients in separate facilities is beneficial for all patients in the country, because otherwise isolation could not be guaranteed.

“This is a quick and lean response to the pandemic in Iraq, but we have to win the race against time and build the hospitals before case numbers continue to escalate,” stresses KfW portfolio manager Moritz Remé. After many years of armed conflict the need for reconstruction in Iraq is particularly high. Income from the oil business has fallen due to the sharp drop in prices in recent months. Help from Germany is therefore urgently needed in Iraq.

(Source: KfW)

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Govt imposes Total Curfew during Eid Al-Adha

Prime Minister Mustafa Al-Kadhimi on Sunday chaired a meeting of the Higher Committee for Health and National Safety.

At the start of the meeting, the Prime Minister thanked Iraqi health workers and paid tribute to their efforts during the coronavirus pandemic, and for treating and looking after those affected by Covid-19.

In his remarks, the Prime Minister underscored the role of citizens in combatting Covid-19 and the importance of following preventive health guidance, social distancing and other rules.

Following discussions, the Higher Committee decided to:

  • Impose a total curfew during the Eid al-Adha holiday, from Thursday 30 July until Sunday 9 August
  • Permit private health clinics to reopen provided that they meet the conditions set by the Ministry of Health and the Iraqi Doctors’ Syndicate
  • Approve the recommendations on Covid-19 preventive measures at Iraqi airports
  • Direct the Ministry of Health to provide the  necessary support to investors wishing to build medical oxygen production plants
  • Direct the Secretary General of the Council of Ministers to liaise with the authorities in the state of Kuwait in order to facilitate the entry of medical oxygen tanks to Iraq through the Safwan border crossing in Basra
  • Direct the security forces to implement the decisions of the Higher Committee regarding the wearing of face masks, social distancing rules and other directives, including the imposition of fines and the seizure of vehicles of those who break the rules.

(Source: Govt of Iraq)

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Canada Commits Funds to tackle Pandemic in Iraq

Protecting communities from COVID-19: Canada commits funds to tackle growing pandemic in Iraq

The Government of Canada has contributed US$1.85 million (CAD 2.5 million) to support the Government of Iraq’s response to the COVID-19 pandemic, in partnership with the United Nations Development Programme (UNDP) in Iraq.

The funds will be directed toward two critical areas of work; $1.85 million will support UNDP Iraq’s immediate response to COVID-19, which supports 12 governorates, and includes increasing the testing capacity of laboratories, providing personal protective equipment to healthcare workers, increasing the number of isolation wards, and undertaking assessments to establish post-COVID-19 recovery strategies.

An additional $75,000 will be used to provide local police engaged in Iraq’s COVID-19 response with personal protective equipment including masks, gloves and hand sanitizer, largely focusing on officers in Baghdad, which has seen the highest number of cases in the country.

“The emergence of COVID-19 has presented yet another challenge for Iraq – which is still reeling from the devastating effects of the ISIL conflict, and is now faced with an economic crisis due to the decline in oil prices. This generous contribution from Canada will ensure the health and safety of communities through access to improved health services and infrastructure, and protect those serving local communities in the line of duty,” says UNDP Iraq’s Resident Representative, Zena Ali Ahmad.

The funds have been repurposed from existing agreements under UNDP Iraq’s Funding Facility for Stabilization (FFS), and the Security Sector Reform/Rule of Law programmes. As one of UNDP Iraq’s key partners, Canada has provided approximately $27 million to the two programmes.

(Source: UNDP)

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Fmr Unaoil Exec Jailed for Iraq Bribery

Ziad Akle, Unaoil‘s territory manager for Iraq, has been sentenced to five years’ imprisonment for paying over $500,000 in bribes to secure a $55m contract to supply offshore mooring buoys.

The new buoys formed part of the post-occupation Iraqi government’s “Master Plan” to rebuild Iraq’s oil industry and thereby expand the country’s oil export capacity. To ensure Unaoil benefitted from these state-run projects, Akle, conspiring with Stephen Whiteley and others, bribed public officials at the South Oil Company to secure contracts for Unaoil and its clients.

In his sentencing, HHJ Beddoe said:

“The offences were committed across borders at a time of serious need for the government of Iraq to rebuild after years of sanctions and the devastation of war. They were utterly exploitative at a time when the economic and political situation in Iraq was extremely fragile.”

A jury at Southwark Crown Court found Akle guilty on two counts of conspiracy to give corrupt payments. Another individual, Stephen Whiteley, was found guilty of one count of conspiracy to give corrupt payments in relation to the same crime. He will be sentenced on a date to be determined.

SFO Director Lisa Osofsky said:

“Ziad Akle and his co-conspirators exploited a country reeling from years of dictatorship and military occupation to line his own pockets and win business. It is this combination of greed and heartless avarice that led to these convictions.

“Today’s sentencing sends a clear message that the United Kingdom and the SFO will not tolerate criminal activity that undermines the fairness and integrity of international business.“

The convictions followed the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments. Al Jarah, who admitted to paying bribes totalling over $6million to secure contracts worth $800m for the supply of oil pipelines and offshore mooring buoys, is due to be sentenced at Southwark Crown Court on 8 October 2020.

(Source: SFO)

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Oryx Petroleum Announces Change in Control

Oryx Petroleum Corporation has announced that the Corporation’s two largest shareholders have informed the Corporation that Zeg Oil and Gas Ltd. acquired control of the Corporation from AOG Upstream BV on July 23, 2020 in the context of the previously announced transaction.

The acquisition was conditional upon and subsequent to the closing of the Loan Settlement announced by the Corporation on July 23, 2020.

In connection with the change in control, Jean Claude Gandur has resigned from the Board of Directors of the Corporation.

As part of securing consent for the change in control of the Corporation’s interest in the Hawler license area from the Ministry of Natural Resources of the Kurdistan Region of Iraq (“MNR”), the Corporation has agreed to amend certain terms of the Production Sharing Contract governing the Hawler license area (pictured).

Specifically, the Corporation has agreed to a 22% reduction in the cost pool related to its interest, and to finance all costs attributed to the 35% interest it does not own for the duration of the development period and without a cap on such financing facility.

Previously, the Corporation was financing only the costs attributable to a 20% interest in the license, to a maximum of US $300 million. The MNR has agreed to waive any rights it has to audit costs incurred up to December 31, 2020.

Depending on actual future revenue and cost profiles, the changes may or may not result in a lower share of future cash flows attributable to the Corporation’s interest compared to the applicable terms prior to amendment.

(Source: Oryx Petroleum)

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Oil Ministry Finalises Export Figures for June

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for June of 84,489,016 barrels, giving an average for the month of 2.816 million barrels per day (bpd), down from the 3.212 million bpd exported in May.

These exports from the oilfields in central and southern Iraq amounted to 81,006,497 barrels, while exports from Kirkuk amounted to 3,482,519 barrels.

Revenues for the month were $2.871 billion at an average price of $33.984 per barrel.

May’s export figures can be found here.

(Source: Ministry of Oil)

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France prioritizes Medical Equipment in Southern Iraq

Battling Coronavirus: France prioritizes critical medical equipment in southern Iraq

The Government of France has committed EUR 300,000 (US$334,448) to support the Government of Iraq’s response to the COVID-19 pandemic, in partnership with the United Nations Development Programme (UNDP).

The funds will be used to purchase ventilators – a life-saving piece of equipment for Coronavirus patients – for Basra Teaching Hospital in southern Iraq.

“The emergence of COVID-19 has exacerbated the many challenges experienced by communities in Basra, who are struggling to access basic infrastructure and services. We are very grateful for this contribution from France which will alleviate the extreme pressure currently placed on under-resourced health facilities in Basra. As the pandemic has unfolded globally, we have seen how important ventilators have been in saving lives,” says Resident Respresentive of UNDP Iraq, Zena Ali Ahmad.

In addition to ventilators and other life-saving equipment provided to the hospital, UNDP Iraq is also building isolation units, providing personal protective equipment (PPE) to healthcare workers to stop the spread of the virus, and boosting the testing capacity of labs to increase the detection of cases.

It also supports an online awareness-raising platform, Corona in Iraq which outlines symptoms and risks of COVID-19, dispels rumors about the virus, and tracks symptoms to encourage people to seek medical advice.

“France is fully committed to actively support the Governement of Iraq to meet the needs of the Iraqi population. This medical equipment will contribute to help medical teams in southern Iraq to face with this urgent situation and allow them to save more lives. We welcome all the efforts made by UNDP to coordinate the help of international donors in order to combat the spread of the disease in Iraq”, says the Ambassador of France, Bruno Aubert.”

In addition to Basra, UNDP Iraq’s COVID-19 response package extends to Anbar, Babel, Dhi Qar, Diyala, Dohuk, Karbala, Kirkuk, Missan, Najaf, Ninewa and Salah Al-Din.

With this latest contribution, France has provided US$7.8 million in support to UNDP Iraq since 2015.

(Source: UNDP)

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Iraq’s Locally Made Hand Sanitizer and Disinfectant

The University of Karbala produces locally made hand sanitizer and disinfectant for health facilities, in first of its kind UNICEF-supported project

In the first of its kind project since the corona virus outbreak, graduate students in the pharmaceutical department of the University of Karbala have produced 14,500 locally made hand sanitizers and 10,000 large products to disinfect surfaces, with the support of UNICEF and its partner the Karbala Directorate of Health.

Over the course of the month of June, the bottles were distributed to primary healthcare centers in Karbala and Baghdad, both which have been hard hit by covid19.

“We have been distributing hand sanitizer and soap to some of the most vulnerable communities since the beginning of the outbreak. To now be able to support Iraqis as they themselves produce items they need to protect their communities from COVID-19 is something we are proud of and that lives up to our commitment to empower local communities who are driving positive change,” said Hamida Lasseko, UNICEF’s Representative in Iraq.

The sanitizer is produced according to the highest global standards and with locally sourced raw materials. The gel is then bottled into 250 milliliters containers that are labelled and include instructions on how to use. The production cost of one bottle amounts 2 US dollars, a third of the average selling price of one hand sanitizer bottle (6 dollars) on the market.

“I am happy with the quality of the materials that we are using. I hope that our work will benefit Iraqis across the country, and not only here in Karbala,” explained Karrar Abd, one of the graduate students taking part in the production.

There are already plans to produce at least 10,000 more bottles that will be distributed in the two governorates, as well as in Basra and Najaf. The production process takes up to three weeks. Once ready, youth volunteers who are trained in hygiene promotion by UNICEF distribute the bottles to public health clinics and centers. To date, the hand sanitizer bottles, and disinfectant solution have been given to 34 main Primary health care centers in Karbala and Baghdad.

“I heard so many people say that COVID-19 does not exist, which is not true. Someone in my family came into contact with the disease and transmitted it on to others. I know that hand sanitizer is the best way to prevent us from spreading COVID-19 because it ensures that we have clean hands, and therefore I wanted to work on this project. It makes me feel I am giving something to my community,” explained 22-year old Zainab Hussein, one of the volunteers from Karbala who participated in the distributing.

With access to hand sanitizer, patients and health workers alike can practice hand hygiene, thereby enabling health centers to continue providing communities with essential services such as immunization and maternal health despite COVID-19. The project was made possible with generous support of the Department of International Development (DFID UK).

(Source: UN)