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Atrush Block drives Production Gains at TAQA

By John Lee.

Abu Dhabi National Energy Company PJSC (TAQA) has announced that the group’s oil and gas business delivered strong performance with an 11% increase in revenue, mainly driven by increased production volumes from its assets in Europe and Iraq.

In its financial results and operational highlights for the six-month period ending June 30, 2019, it said its overall capex also rose to AED 957 million in the first six months of 2019, a 15% increase when compared to the same period in 2018.

“The increase in Oil and Gas capex was largely driven by the AED 116 million acquisition of an additional 7.5% working stake in the Atrush Block from Marathon Oil Kurdistan B.V. in May of this year. The acquired stake increases TAQA’s working interest in the project from 39.9% to 47.4%.

“Additional capex in Iraq was focussed towards bringing new wells on stream and the impact of debottlenecking work to increase the capacity of the current production facility. This has proven to be a worthwhile investment, with TAQA’s entitlement production increasing to 5,728 boe/d in H1 2019, a 149% improvement compared to the previous year.”

It added that this has proven to be a worthwhile investment, with TAQA’s entitlement production increasing to 5,728 boe/d in H1 2019, a 149% improvement compared to the previous year.

The average production by the oil and gas business for the first half of the year increased 3% to 124,760 boe/d, aided by strong well performance in Europe and Iraq.

Commenting on the positive performance, Saeed Mubarak Al Hajeri, Chairman of TAQA, said:

“Our solid performance in H1 2019 is underpinned by our strong operational performance.  The Group’s balance sheet remains healthy, and with stable revenues and a further reduction in debt coupled with strong liquidity we remain on course to meet our long term objectives. The recent ratings affirmation from Moody’s is a testament to the stability of our operational performance.

“We also made exciting progress in advancing our strategy of maintaining capital discipline with focused investments in our core assets, such as the Atrush Block. Looking ahead, we remain optimistic and believe that our investments in the UAE and other strategic markets will contribute to a sustained growth story.”

(Source: TAQA)

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ShaMaran Completes Acquisition of Atrush Stake

By John Lee.

ShaMaran Petroleum has announced the completion of its acquisition of an additional 7.5% participating interest in the Atrush Block [from Marathon Oil], previously announced on April 3, 2019, bringing ShaMaran’s total interest in Atrush up to 27.6%.

ShaMaran also announces that Atrush has been producing at approximately 32,000 barrels of oil per day.  The Company maintains its daily average production guidance for 2019 as previously published on February 15, 2019.

Adel Chaouch, President and CEO of ShaMaran, commented:

“Closing this Acquisition is a significant achievement for our Company and the recent production results are both positive and in line with our expectations. The Company is now well positioned for its next phase of growth.”

(Source: ShaMaran Petroleum)

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UK Firm to Train Technicians from Kurdistan

TTE Technical Institute has secured a new project with international energy and water company TAQA to provide technical training to Middle East based technicians.

A group of 13 technicians from TAQA’s Atrush Block oil production facility in the Kurdistan region of Iraq are spending three months in the UK at TTE’s fully-equipped training centre in Middlesbrough to develop practical engineering competencies to achieve internationally-recognised qualifications.

The project is also supporting TAQA’s development of women technicians in the Kurdistan region with one member of the group a female process technician.

Within the group are three technicians working towards Level Performing Engineering Operations (PEO) Level 2 in mechanical engineering and three technicians aiming to achieve the PEO Electrical & Instrumentation Level 2 standard.

The seven remaining technicians are working towards the Process Industry Operations Level 2 qualification. Once completed, all of the qualifications allow for continual development to achieve Level 3.

Working with TTE’s internationally-experienced trainers, the technicians will utilise the training centre’s industry-standard facilities and equipment undertaking a programme of practical, hands-on modules and assessments.

TTE has an established reputation for providing on-site skills and competency assessments for international companies such as TAQA, which is headquartered in Abu Dhabi operating in 11 countries across four continents.

This is one of the first significant contracts TTE has secured since it became a Technical Institute earlier this year.  Marking its 30th year in operation, becoming TTE Technical Institute supports its strategy to increase the export of its services to international markets.

Technical Institutes are globally-acknowledged as centres of vocational training, providing learners with skills, competencies and qualifications to enter or advance a career in industry, which is in keeping with TTE’s existing, comprehensive provision.

Contracts such as this also support the training of young people in the North East of England. As a charitable, not-for-profit social enterprise, TTE gift-aids the surplus revenues generated from its commercial training to support the funding of training for apprentices and young learners from schools and colleges in the North East.

Steve Grant, Managing Director of the TTE Technical Institute, said: “We are very proud to establish this new relationship with such a globally-recognised company as TAQA to support the development of its workforce.  This is the another group we have welcomed to TTE from Kurdistan, further extending the reach of the organisation into international markets.

“Exporting our expertise to areas of the world such as West Africa, the Middle East and Asia plays an important role in the training of young people in the North East through the gift-aiding of commercial surpluses into our charity. Increasing our presence in key international markets and securing important projects with companies such as TAQA will generate more opportunities for local young people.”

(Source: TTE)

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ShaMaran acquires Larger Stake in Atrush

ShaMaran Petroleum Corporation refers to the agreement announced on June 4, 2018 whereby the Company’s wholly owned subsidiary, General Exploration Partners, Inc. (“GEP”), agreed in a sale and purchase agreement (the “SPA”) with Marathon Oil KDV B.V. (“MOKDV”) ,a wholly owned subsidiary of Marathon Oil Corporation (“Marathon”), to acquire from MOKDV a further 15% working interest in the Atrush Block Production Sharing Contract in the Kurdistan Region of Iraq (“the Acquisition”).

The underlying agreements governing the development and operation of the Atrush block require that both the Minister of Natural Resources of the Kurdistan Governmental Authority (“MNR”) as well as TAQA Atrush BV (“TAQA”), the other owner of a participating interest in, and the operator of, the Atrush block, consent to the assignment of the participating interest from MOKDV to GEP. At the time, the MNR gave assurance of providing its consent to the assignment, however, TAQA unreasonably refused to provide its consent to the Acquisition.

As a result of TAQA’s unreasonable refusal to provide consent, Marathon re-issued an offer to acquire MOKDV, a corporate transaction which does not require TAQA consent, with the result being that the Company is now engaged in a new bidding process for the Marathon interest in the Atrush block. There is no assurance that any offer by the Company or GEP, if submitted, will result in the acquisition of the increased interest in the Atrush block.

In the meantime, the Company is reviewing all available options.

(Source: ShaMaran)

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Atrush Production Update

ShaMaran Petroleum reports that operations in the Atrush field in Kurdistan are continuing in a normal, safe and secure manner.

Atrush is currently producing at approximately 27 thousand barrels of oil per day (“bopd”) and exports are continuing via the Kurdistan Export Pipeline system. Atrush exports for the month of December averaged 26,163 bopd and benefitted from a higher facility uptime than the 90% previously projected.

Currently the production facilities are limited to processing approximately 27,000 bopd of the total 30,000 bopd capacity due to low ambient temperatures which limits the amount of heat available to process the oil to export specifications.

Plans in 2018 include debottlenecking the production facility and proceeding with the testing, completion and tie-in of the Chiya Khere-7 well which was drilled towards the end of last year.

(Source: ShaMaran)

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ShaMaran Petroleum Announces Results

ShaMaran Petroleum has announced its financial and operating results for the three and nine months ended September 30, 2017. (Unless otherwise stated all currency amounts indicated as “$” in this news release are expressed in thousands of United States dollars).

HIGHLIGHTS AND DEVELOPMENTS

Operations

  • Oil production on the Atrush Block commenced in July 2017. Atrush is currently producing at approximately 26 thousand barrels of oil per day (“bopd”). In order to address certain production constraints the facilities were shut down in the beginning of October. These constraints have now successfully been resolved.
  • One of the four production wells, Atrush 4, (“AT-4”) is currently shut in. The well was back-producing drilling fluid lost during drilling operations. In order to not upset the production system it was decided to clean up the well via temporary facilities upon the receipt of a flare permit from the Kurdistan Regional Government (“KRG”). This operation is now planned for Q4 2017.
  • In October and November 2017 the Company received payments totalling $2.5 million representing its entitlement share of the $9.7 million in total payments received by the Atrush Non-Government Contractors from the KRG for July and August oil sales from Atrush and reimbursement instalments of the Atrush Exploration Costs receivable. 703 thousand barrels of oil were exported from Atrush for the months of July and August with an average netback price1 of $35.3 per barrel of oil. Total oil produced and exported from Atrush over the third quarter was 1.3 million barrels resulting in an average of 14.6 thousand barrels per day. The average netback price over the quarter was $36.86 per barrel and the average lifting cost was $8.54 per barrel.
  • The Chiya Khere-7 (“CK-7”), which was spudded on September 17, 2017 reached a final depth of 1,861 metres in early November 2017. The reservoir section was encountered approximately 114 metres shallower than prognosis. The well was drilled on time and under budget. Testing and completion of the well will be performed in 2018 to coincide with installation of flow lines between the Production Facility and the Chamanke E location were the well is located. The main objectives of the well are to appraise the commercial potential of the Mus formation, to help reduce the uncertainty in the location of the medium to heavy oil transition zone and to serve as a further producing well.
  • In September 2017 an agreement was concluded between the Atrush Non-Government Contractors and the KRG for the sale of Atrush oil whereby the KRG will buy oil exported from the Atrush field by pipeline at the Atrush block boundary based upon the Dated Brent oil price minus approximately $16 for quality discount and all local and international transportation costs. This discount is based on the same principles as other oil sales agreements in the Kurdistan Region of Iraq.
  • The Final Completion Certificate for the Atrush Feeder Pipeline (“FCC”) was issued on October 31, 2017 which completes the obligation of the Non-Government Contractors to fund the KRG’s share of development costs and triggers the commencement of repayment of both the Atrush Feeder Pipeline Cost Loan and the Atrush Development Cost Loan. The first loan repayment instalments are due later in November 2017.
  • Following the independence referendum held in Kurdistan on September 25, 2017, operations in the Atrush field in Kurdistan are continuing in a normal, safe and secure manner. Exports from Atrush are continuing via the Kurdistan Export Pipeline system and drilling operations on the CK-7 well are progressing as planned. Nevertheless, events since the referendum suggest an increase in the potential for political instability within the region.

1 This includes a discount to Dated Brent for oil quality and all local and international transportation costs.

Corporate

  • On January 30, 2017 the Company completed the issue of 360 million common shares of ShaMaran on a private placement basis (the “Private Placement”) at a price per share of CAD 0.10 (equal to SEK 0.67) which resulted in gross proceeds to the Company of $27.3 million ($26.4 million net of transaction related costs). Zebra Holdings and Investments SARL, Lorito Holdings SARL and Lundin Petroleum BV, the Company’s major shareholders, subscribed for 43,463,618 shares, 16,984,621 shares and 17,800,000 shares, respectively, in the Private Placement.
  • In February 2017 the Company reported estimated reserves and contingent resources for the Atrush block as of December 31, 2016. Reserves and resource estimates have remained unchanged from those reported for the prior year. Total discovered oil in place in the Atrush Block is a low estimate of 1.5 billion barrels, a best estimate of 2.1 billion barrels and a high estimate of 2.8 billion barrels, with Total Field Proven plus Probable (“2P”) Reserves on a property gross basis estimated at 85.1 MMbbl and Total Field Unrisked Best Estimate Contingent Resources (“2C”) on a property gross basis estimated at 304 million barrels oil equivalent (MMboe). 2 3

2 “MMbbl” means million barrels and “MMboe” means million barrels of oil equivalents. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 million cubic feet (“Mcf”) per one barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

3 This estimate of remaining recoverable resources (unrisked) includes contingent resources that have not been adjusted for risk based on the chance of development. It is not an estimate of volumes that may be recovered.

OUTLOOK

Operations

• In the fourth quarter of 2017 it is planned to produce the AT-4 well until clean via temporary facilities and bring Atrush production up to the facilities’ design capacity of 30,000 bopd.
• Plans for Atrush for 2018 include:
• continue with program to identify bottlenecks in order to maximise output from the Production Facility;
• testing and completion of the CK-7 well;
• install the CK-7 flow line and bring CK-7 into production;
• drilling, testing and completion of Chiya Khere (“CK-10”), a sixth development well;
• drilling and completion of Chiya Khere (“CK-9”), a dedicated water disposal well; and
• conducting extended testing of the CK-6 well which is located on the eastern side of the Atrush Block and which is outside the 2P reserve area of Atrush. This would involve the installation of temporary production facilities near the Chamanke–C well pad and the delivery by truck of oil to the main Phase 1 Production Facilities.
• Following the results of the CK-7 and CK-10 wells, the extended well testing in CK-6 and sustained production from the Phase 1 Production Facilities the Company expects to be in a position to further assess the significant undeveloped Atrush resource base.
• The political situation in the Kurdistan region will be monitored continuously and the market will be appraised of any material impact on operational activity.
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ShaMaran starts Drilling at Chiya Khere

ShaMaran Petroleum has announced that drilling operations have commenced on the Chiya Khere (“CK-7”) appraisal and development well in the Atrush Block in the Kurdistan Region of Iraq.

CK-7 is located in the central area of the Atrush Block approximately 3 kilometres east of the Atrush 2 producing well and 3.5 kilometres west of the Atrush 3 appraisal well.

The main objectives of the well are to appraise the commercial potential of the Mus formation, to help reduce the uncertainty in the location of the medium to heavy oil transition zone and to serve as a further producing well.

The well will be drilled with the EDC Romfor 25 drilling rig (pictured) and is expected to take approximately 52 days. Planned total vertical depth for the well is approximately 1,575 metres.

(Source: ShaMaran)