Pertamina to Increase Holding in West Qurna 1

By John Lee.

Pertamina, the Indonesian state-owned energy company, will reportedly buy an additional 10 percent stake in the West Qurna 1 oilfield from ExxonMobil.

The Deputy Director-General of the Basra Oil Company (BOC), Hassan Muhammad Hassan, told the official Iraqi News Agency (INA) that the agrreement, "is subject to the signing of the settlement agreement with the Basra Oil Company."

Pertamina previously had a 10 percent holding.

The Iraqi cabinet had previously agreed to allow BOC to take over ExxonMobil's holding in the field, at a price of "up to $350 million."

(Source: INA)

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MSF in Iraq annual report 2021

The effects of years of conflict and instability are still felt in Iraq, more evidently in regions that witnessed fighting between the Islamic State (IS) group and the Iraqi-led coalition. In 2021, Iraq continued to be severely affected by COVID-19, with the country experiencing its second and third COVID-19 waves, each recording a higher number of infections and deaths than the one before it.

The pandemic significantly impacted the ongoing recovery of the health system and people's ability to access healthcare services. Many healthcare facilities across the country suspended their regular programmes to focus on treating COVID-19 patients.

MSF teams continued to provide a wide range of essential medical services and supported the response to health emergencies and health needs caused by the recent war against IS, the consequent displacement and return of millions of people, people's under-served healthcare needs and the COVID-19 pandemic.

This annual report provides an overview and the highlights of our activities across Iraq during 2021.

Click here to read the full report.

(Source: MSF)

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Iraq Decreases Oil Exports in July

By John Lee.

Iraq's Ministry of Oil has announced preliminary oil exports for July of 102,385,049 barrels, giving an average for the month of 3.303 million barrels per day (bpd), down from the 3.373 million bpd exported in June.

The exports from the oilfields in central and southern Iraq amounted to approximately 99,965,094 barrels, while exports from the Kirkuk fields through the port of Ceyhan amounted to 2,344,536 barrels.

While not explicitly stated by the Ministry, these figures seem to imply that exports by road to Jordan totalled 75,419 barrels for the month.

Revenues for the month were $10.608 billion, at an average price of $103.60 per barrel.

June's export figures can be found here.

(Source: Ministry of Oil)

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Genel Energy: Strong Results, but Shares Down

By John Lee.

Shares in Genel Energy were trading down around 5 percent on Tuesday morning, despite significant increases in revenue and profit announceed in its unaudited results for the six months ended 30 June 2022.

Paul Weir, Interim Chief Executive of Genel, said:

"Our cash generation in the first half of the year has been exceptionally strong - driven by our low-cost, high-margin oil production and disciplined capital allocation. We remain focused on the delivery of our long-established strategy of putting capital to work to grow our production and cash generation, while retaining our resilience and paying a material and progressive dividend.

We generated $129 million in free cash flow and are well on track to generate over a quarter of a billion dollars of free cash flow for the full year. This continues to build our balance sheet strength and optionality, providing us with the funds to add the right assets at the right price. Our cash flow this year benefits from the recovery of receivables and our override payments, and we are focused on replacing these by building a portfolio that supports the resilience, sustainability, and progression of our material dividend."

Results summary ($ million unless stated)

H1 2022 H1 2021 FY 2021
Average Brent oil price ($/bbl) 108 65 71
Production (bopd, working interest) 30,420  32,760 31,710
Revenue 245.6  151.5 334.9
EBITDAX1 212.3  123.1 275.1
  Depreciation and amortisation (84.4)  (81.8) (172.8)
  Impairment of oil and gas assets - - (403.2)
  Reversal of impairment of receivables 12.8 - 24.1
Operating profit / (loss) 140.7 41.3 (276.8)
Cash flow from operating activities 216.3 91.1 228.1
Capital expenditure 74.7 58.2 163.7
Free cash flow2 128.7 22.2 85.9
Cash 412.1 266.4 313.7
Total debt 280.0 280.0 280.0
Net cash / (debt)3 141.3 (2.2) 43.9
Basic EPS (¢ per share) 45.4 9.3 (111.4)
Dividends declared for the period (¢ per share) 6 6 18
  1. EBITDAX is operating profit / (loss) adjusted for the add back of depreciation and amortisation, impairment of property, plant and equipment, impairment of intangible assets and reversal of impairment of receivables
  2. Free cash flow is reconciled on page 8
  3. Reported cash less IFRS debt (page 8)

Summary

  • Material cash generation from low-cost and high-margin oil production:
    • Net production averaged 30,420 bopd in H1 2022 (H1 2021: 32,760 bopd)
    • Low production cost of $4.4/bbl and strength of oil price delivered a margin per barrel of $32/bbl (H1 2021: $20/bbl)
    • Free cash flow of $129 million (H1 2021: $22 million)
  • Financial strength provides options for capital allocation:
    • $75 million of capital expenditure in H1 2022, of which $41 million was spent at Taq Taq and Tawke, and $27 million on Sarta appraisal
    • Genel took on operatorship at Sarta on 1 January 2022, with Sarta-5 and Sarta-1D subsequently being completed
    • Cash of $412 million (31 December 2021: $314 million)
    • Net cash of $141 million (31 December 2021: net cash of $44 million)
  • A socially responsible contributor to the global energy mix:
    • Zero lost time injuries ('LTI') and zero tier one loss of primary containment events at Genel and TTOPCO operations
      • Two million work hours since the last LTI, as we seek to repeat the performance of six years without an LTI up to September 2021
    • As we mark 20 years of operations in the Kurdistan Region of Iraq ('KRI'), the Genel20 Scholars initiative has launched, with Genel funding the opportunity for 20 economically disadvantaged students to have a life-enhancing education at the American University of Kurdistan

Outlook

  • Production guidance for 2022 maintained as around the same level as 2021, currently tracking between 30-31,000 bopd for the full-year
  • 2022 capital expenditure guidance of between $140 million and $180 million tightened to $150 million to $170 million
  • Genel expects free cash flow of over $250 million in 2022, pre dividend payments
  • Appraisal at Sarta is ongoing, with results of the Sarta-6 well expected around the end of the year
  • The Company continues to actively pursue new business opportunities, focused on production and cash generation
  • The London seated international arbitration regarding Genel's claim for substantial compensation from the KRG following Genel's termination of the Miran and Bina Bawi PSCs is ongoing
  • Interim dividend retained at 6¢ per share:
    • Ex-dividend date: 15 September 2022
    • Record date: 16 September 2022
    • Payment date: 14 October 2022

Full results here.

(Source: Genel Energy)

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Saudi Arabia allocates Grant for Renovation of Ibn Al Khatib Hospital

By John Lee.

Iraq and Saudi Arabia have signed a memorandum of understanding (MoU) regarding the allocation of a grant from the government of Saudi Arabia to finance the renovation of Ibn Al Khatib Hospital in Baghdad.

The Saudi embassy initially announced its support for the hospital last year, following a fire that killed at least 82 people, and left more than 100 injured.

The grant will be provided through the Saudi Fund for Development (SFD).

During the meeting, Iraq's Ambassador to Saudi Arabia, Dr. Abdul Sattar Hadi Al-Janabi, praised the critical role played by the Kingdom through the SFD in supporting the health sector and the infrastructure in Iraq. He highlighted the importance of the present project in enhancing the livelihood of many Iraqis and their access to essential health services.

According to the official Saudi Press Agency, the Kingdom has allocated $1.5 billion for soft loans through SFD to support development in Iraq.

(Source: Saudi Press Agency)

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Vinson and Elkins to advise Iraq on Arbitration with Turkey

By John Lee.

Iraq's Ministry of Oil has engaged the Texas-based law firm Vinson and Elkins as a legal advisor in the US.

Partner James Lloyd Loftis will meet with representatives of the Department of State, at their request, regarding a pending arbitration proceeding between Iraq and the Republic of Turkey.

The Ministry will pay Mr Loftus a fee of $900 per hour for his advice in this matter.

During the period beginning 60 days prior to the date of the registrant's obligation to register under US's Foreign Agents Registration Act (FARA), the firm received more than $2.1 million from the Ministry for non-registrable legal services.

The firm has advised Baghdad on other matters in the past.

(Source: FARA)

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Construction Starts at 1.6 GW Power Plant in Anbar

By John Lee.

Prime Minister Mustafa Al-Kadhimi has laid the foundation stone for a new power station in the Al-Furat district of Anbar Governorate.

According to a statement from the Media Office of the Prime Minister, the total capacity of the plant is 1,642 megawatts, at a cost of one billion dollars, and the project will take 3 years to complete.

The project consists of four GT26 gas turbine units [from GE], with a unit capacity of 273 megawatts, and two steam units with a capacity of 275 megawatts.

(Source: Media Office of the Prime Minister)

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New Plastics Plant opened in Basra

By John Lee.

The Minister of Industry and Minerals, Manhal Aziz Al-Khabbaz, has re-opened a factory making low density polyethylene in Basra.

The plant, run by the General Company for Petrochemical Industries, had been idle for more than 12 years.

Capacity is said to be 120 tons per day, with high quality and high purity.

The Minister wished the company further success in its plans to rehabilitate the high-density polyethylene granules production plant.

(Source: Minister of Industry and Minerals)

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Iraq confirms June Oil Exports

By John Lee.

Iraq's Ministry of Oil has announced finalised oil exports for June of 101,191,236 barrels, giving an average for the month of 3.373 million barrels per day (bpd), up from the 3.300 million bpd exported in May.

The exports from the oilfields in central and southern Iraq amounted to approximately 97,980,589 barrels, while exports from the Kirkuk fields through the port of Ceyhan amounted to 2,910,887 barrels.

While not explicitly stated by the Ministry, these figures seem to imply that exports by road to Jordan totalled 299,760 barrels for the month.

Revenues for the month were $11.354 billion, at an average price of $112.209 per barrel.

May's export figures can be found here.

(Source: Ministry of Oil)

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Production at Khor Mor field unaffected by Rocket Attacks

By John Lee.

The Khor Mor field in Kurdistan has again been subjected to rocket attacks.

In a statement to the Abu Dhabi Securities Exchange, operator Dana Gas said:

"Dana Gas (PJSC) informs the market that two small rockets landed within the Khor Mor Block in the Kurdistan Region of Iraq on the evening of Monday, 25th of July.

"There were no injuries and production operations continue as normal."

The field was also attacked last month, with two people injured.

(Source: Dana Gas)

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