Category: featured

Posted on

GKP outlines Payments to Govts for 2021

By John Lee.

Gulf Keystone Petroleum (GKP) has just published details of its payments to governments for the year 2021:

Introduction

This report sets out details of the payments made to governments by Gulf Keystone Petroleum Ltd and its subsidiary undertakings (“Gulf Keystone”) for the year ended 31 December 2021 as required under Disclosure and Transparency Rule 4.3A issued by the UK’s Financial Conduct Authority (“DTR 4.3A”) and in accordance with The Reports on Payments to Governments Regulations 2014 (as amended in 2015) (“the UK Regulations”) and our interpretation of the Industry Guidance on the UK Regulations issued by the International Association of Oil & Gas Producers. DTR 4.3A requires companies listed on a stock exchange in the UK and operating in the extractive industry to publicly disclose payments to governments in the countries where they undertake exploration, prospection, discovery, development and extraction of minerals, oil, natural gas deposits or other materials.

Basis for preparation

Total payments below £86,000 made to a government are excluded from this report, as permitted under the UK Regulations.

All of the payments made in relation to the Shaikan Production Sharing Contract (“Shaikan PSC”) in the Kurdistan Region of Iraq have been made to the Ministry of Natural Resources (“MNR”) of the Kurdistan Regional Government (“KRG”).

Production entitlements

Production entitlements are the host government’s share of production during the reporting period from the Shaikan Field operated by Gulf Keystone. The figures reported have been produced on an entitlement basis, rather than on a liftings basis. Production entitlements are paid in-kind and the monetary value disclosed is derived from management’s calculation based on the monthly oil sales invoices.

Royalties

Royalties represent royalties paid in-kind to governments during the year for the extraction of oil. The terms of the royalties are described within the Shaikan PSC. Royalties have been calculated on the same basis as production entitlements.

Licence fees and capacity building payments

These include licence fees, rental fees, entry fees, capacity building payments, security fees and other considerations for licences or concessions.

Infrastructure improvement payments

These include payments for infrastructure improvements, whether contractual or otherwise, such as roads, other than in circumstances where the infrastructure is expected to be primarily dedicated to operational activities throughout its useful life.

KRG

Production entitlements in-kind (1) (mboe (2))

5,151

Production entitlements in-kind (1)  ($ ‘000)

255,763

Royalties in-kind (1) (mboe (2))

1,255

Royalties in-kind (1) (2) ($ ‘000)

62,320

Licence fees and capacity building payments in-kind (3) ($ ‘000)

17,385

Infrastructure improvement payments (4)

342

Total (mboe (2))

6,406

Total ($ ‘000)

355,811

Notes

(1)  All of the crude oil produced by Gulf Keystone was sold by the KRG. All proceeds of sale were received by or on behalf of the KRG, out of which the KRG then made payment for cost oil and profit oil in accordance with the Shaikan PSC to Gulf Keystone, in exchange for the crude oil delivered to the KRG. Under these arrangements, payments were made by or on behalf of the KRG to Gulf Keystone, rather than by Gulf Keystone to the KRG. However, for the purposes of the reporting requirements under the UK Regulations, we are required to characterise the value of the KRG’s production entitlements under the Shaikan PSC (for which the KRG receives payment directly from the market) as a payment to the KRG.

(2)  Thousand barrels of oil.

(3)  Capacity building payments are deducted from the monthly crude oil sales invoice, no direct payment is made to the KRG. The value of licence, rental and security fees has been accrued and is not expected to be paid, but rather offset against revenue due from the KRG related to pre-October 2017 oil sales, which have not yet been recognised in the financial statements.

(4)  Drilling of water well, construction of water supply network and purchase of generators.

(Source: Gulf Keystone Petroleum)

The post GKP outlines Payments to Govts for 2021 first appeared on Iraq Business News.

Posted on

IDC starts Drilling 20 Oil Wells at Nasiriyah

By John Lee.

The Iraqi Drilling Company (IDC) has started work on the first of its 20 oil wells at the Nasiriyah oil field in Dhi Qar.

IDC’s Director General, Basem Abdul Karim, said that the project is part of a contract with the Dhi Qar Oil Company (DQOC) in cooperation with Weatherford.

The planned depth of the well is 2,200 meters.

The project is to be completed within 18 months.

(Source: Ministry of Oil)

The post IDC starts Drilling 20 Oil Wells at Nasiriyah first appeared on Iraq Business News.

Posted on

ShaMaran reports Record Oil Revenues at Atrush

ShaMaran Petroleum has released its financial and operating results and related management’s discussion and analysis (MD&A) for the three months and year ended December 31, 2021.

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

“2021 has been a transformational year for ShaMaran. The Company generated the highest annual oil sales revenues in its history at $102.3 million. ShaMaran’s 2021 EBITAX was more than triple that of 2020 and last year demonstrates the Company’s cash generating ability with cashflow from operations increasing by almost 5 times versus the year before.  Atrush continues to prove itself as a world class field with cumulative production now in excess of 54MM barrels and a continuation of full replacement of 2P reserves year on year.

“We are entering 2022 in a strong financial position and are excited about the growth opportunities that lie ahead for Shamaran. The Sarsang acquisition, expected to close in the coming months, will double the size of the Company and we continue to actively look at other market opportunities to further develop ShaMaran. We recently announced a one-of-its-kind climate action corporate sponsorship with the Hasar Organization for Earth Sciences in Kurdistan. This initiative represents a key early step in ShaMaran’s strategy towards significantly reducing its net carbon footprint.“

2021 Financial Highlights

Three months ended Dec 31

Year ended Dec 31

USD Thousands

2021

2020

2021

2020

Revenue

27,439

14,081

102,323

56,673

Gross margin on oil sales

12,662

10,253

49,889

7,106

Net result

4,061

(1,785)

13,383

(144,425)

Cash flow from operations

23,336

5,350

63,903

12,860

EBITDAX

18,456

6,614

66,375

20,052
  • The fourth quarter generated oil sales revenue of $27.4 million and during 2021 the Company generated the highest-ever annual oil sales revenues at $102.3 million;
  • A strong EBITDAX of $18.5 million for the fourth quarter and $66.4 million for the full year 2021, 3.3 times the EBITDAX of 2020;
  • Consistent oil sales and entitlement payments from the KRG with 75% of the KRG outstanding receivables paid during 2021;
  • 2021 and fourth quarter operating cash flow of $63.9 million and $12.9 million respectively; and
  • Reduction of the principal amount of the Company’s 2023 Bond by $15 million during 2021 with a further $3 million of the 2023 Bond bought back by the company at 2021 year end.

___________________________

1 All currency amounts indicated as “$” in this news release are expressed in United States Dollars. 

2021 Atrush Operational Highlights

  • Cumulative production of more than 54 million barrels of oil achieved by year end 2021;
  • Atrush Property gross 2P reserves2 had a 102% reserves replacement ratio increasing to 110.2 MMbbls as at December 31, 2021 from 109.9 in 2020, and Company gross 2P reserves increasing from 30.3 MMbbls to 30.4 MMbbls;
  • Full year 2021 average production of approximately 38,600 bopd, was very close to the 2021 guidance despite a longer than anticipated routine maintenance shutdown period in September 2021;
  • Full year 2021 lifting costs per barrel of $5.12 in line with 2021 guidance; and
  • Full year 2021 capital expenditure of $52.3 million ($14.2 million net to ShaMaran) in line with 2021 guidance.

Sarsang Acquisition

  • As announced on July 30, 2021, the Company has successfully issued and settled $111.5 million principal amount of the $300 million 12% senior unsecured bond 2021/2025 (the “2025 Bond”), which was issued at 98.5% of nominal value for gross cash proceeds to the Company of $109.8 million. This portion of the 2025 Bond and the $188.5 million balance will be issued to refinance existing indebtedness of the Company in connection with, and conditional upon completion of, the Company’s acquisition of TotalEnergies’ affiliate that holds an 18% non-operated participating interest in the Sarsang Block; and
  • The Company is currently finalizing the closing documentation for the completion of the Sarsang Acquisition and completion is expected in the first half of 2022.

2022 Atrush Guidance

  • 2022 average production guidance of 36,000 to 41,000 bopd;
  • Atrush capital expenditures for 2022 planned at $116 million ($32 million net to ShaMaran). This capital program includes:
    • The drilling and completion of three development wells, including one water injection well.
    • Initiation of the gas solution project which will significantly reduce emissions by using existing infrastructure to generate electrical power from produced gas. As the Atrush field is currently dependent on diesel-fueled generators for all electrical power, this project will also therefore greatly reduce future operating costs.
  • Atrush operating expenditure is forecast to be $76 million ($21 million net to ShaMaran) for 2022, in line with 2021 actual operating costs; and
  • Atrush average lifting costs per barrel are estimated to range from $4.80 to $5.80. Atrush lifting costs are mainly fixed costs and dollar-per-barrel estimates should decrease with increasing levels of production and operational efficiencies.

CORPORATE UPDATE

The Company is pleased to announce that the Record Date of May 6, 2022 has been set for the Annual General Meeting of Shareholders to be held on June 23, 2022.

____________________________

2 Reserves estimates, contingent resource estimates and estimates of future net revenue in respect of ShaMaran’s oil and gas assets in the Atrush Block are effective as at December 31, 2021, and are included in the report prepared by McDaniel & Associates Consultants Ltd., an independent qualified reserves evaluator, in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook (the COGE Handbook) and using McDaniel’s January 1, 2022 price forecasts. Certain abbreviations and technical terms used in this MD&A are defined or described under the heading “Other Supplementary Information”.

OTHER

This information is information that ShaMaran is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, on April 25, 2022 at 5:30 p.m. Eastern Time.  Arctic Securities AS (Swedish branch) is the Company’s Certified Advisor on Nasdaq First North Growth Market (Sweden), +46 844 68 61 00, certifiedadviser@arctic.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FORWARD LOOKING STATEMENTS

This news release contains statements and information about expected or anticipated future events and financial results that are forward‐looking in nature and, as a result, are subject to certain risks and uncertainties, such as legal and political risk, civil unrest, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management’s capacity to execute and implement its future plans.

The Covid-19 virus and the restrictions and disruptions related to it have had a drastic adverse effect on the world demand for, and prices of, oil and gas as well as the market price of the shares of oil and gas companies generally, including the Company’s common shares.  There can be no assurance that these adverse effects will not continue or that commodity prices will not decrease or remain volatile in the future. These factors are beyond the control of ShaMaran and it is difficult to assess how these, and other factors, will continue to affect the Company and the market price of ShaMaran’s common shares. In light of the current situation, as at the date of this news release, the Company continues to review and assess its business plans and assumptions regarding the business environment, as well as its estimates of future production, cash flows, operating costs, and capital expenditures.

Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward‐looking information. Forward‐ looking information typically contains statements with words such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “projects”, “potential”, “scheduled”, “forecast”, “outlook”, “budget” or the negative of those terms or similar words suggesting future outcomes.  The Company cautions readers regarding the reliance placed by them on forward‐looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company.

Actual results may differ materially from those projected by management. Further, any forward‐looking information is made only as of a certain date and the Company undertakes no obligation to update any forward‐ looking information or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events, except as may be required by applicable securities laws. New factors emerge from time to time, and it is not possible for management of the Company to predict all of these factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information.

ABOUT SHAMARAN

ShaMaran is a Kurdistan focused oil development and exploration company which holds a 27.6% working interest, through its wholly-owned subsidiary General Exploration Partners, Inc., in the Atrush Block and, upon successful closing of the Sarsang Acquisition, will then also hold an 18% interest through its then wholly-owned subsidiary TEPKRI Sarsang A/S in the Sarsang Block.

ShaMaran is a Canadian oil and gas company listed on the TSX Venture Exchange and the Nasdaq First North Growth Market (Sweden) under the symbol “SNM”.

(Source: ShaMaran)

The post ShaMaran reports Record Oil Revenues at Atrush first appeared on Iraq Business News.

Posted on

Iraq Finalises March Oil Exports

By John Lee.

Iraq’s Ministry of Oil has announced finalised oil exports for March of 100,579,612 barrels, giving an average for the month of 3.244 million barrels per day (bpd), down slightly from the 3.314 million bpd exported in February.

The exports from the oilfields in central and southern Iraq amounted to approximately 99,130,677 barrels, while exports from the Kirkuk fields through the port of Ceyhan amounted to 1,488,935 barrels.

Revenues for the month were $10.913 billion, at an average price of $108.503 per barrel. According to the Ministry, this is the highest monthly oil revenue in Iraq since 1972.

February’s export figures can be found here.

(Source: Ministry of Oil)

The post Iraq Finalises March Oil Exports first appeared on Iraq Business News.

Posted on

WHO marks 5 Yrs of Strategic Partnership with USAID in Iraq

WHO marks five years of strategic partnership with USAID in Iraq

The World Health Organization (WHO) marks the five-year milestone of its strategic partnership with the United States Agency for International Development (USAID) to support the provision of life-saving and essential healthcare services to vulnerable populations in Iraq.

Over the past five years, USAID has provided WHO Iraq with support totalling US$122 million.

Dr Ahmed Zouiten, WHO Representative in Iraq, said@

“USAID has been the biggest funding partner of WHO in Iraq over the past five years. We’re proud of this genuine and growing partnership, which helped us expand access to much-needed healthcare services for millions of people in different governorates.

“We greatly value and appreciate this impactful partnership, and we’re exploring new opportunities to deepen this collaborative partnership further.”

Impact of USAID’s contribution

Thanks to the generous contribution from USAID, over 6 million primary health care consultations, including mental and physical rehabilitation services, were provided to Iraqi citizens, while over 1,500 individuals benefited from various capacity building training.

USAID support also provided 56 new ambulances to the Iraqi health system, helping to ensure uninterrupted access to referral services. Funds also went to delivering essential medicines, medical supplies and diagnostic equipment to various conflict-affected governorates to provide comprehensive primary health care services to millions of people, including around 300,000 Syrian refugees and host communities in Erbil, Dahuk and Sulaymaniyah governorates.

In addition, USAID has contributed to WHO-Iraq’s preparedness and response to COVID-19 by adding up to 800 new COVID-19 vaccination locations, including in challenging humanitarian areas, such as in camps housing refugees and internally displaced persons.

It is also providing equipment and supplies, as well as technical assistance to Iraqi laboratories, clinics, and hospitals for testing, diagnosing, and treating COVID-19. USAID funding is also helping train frontline workers on caring for COVID-19 patients and organizing awareness-raising campaigns.

Heather Schildge, Acting USAID Mission Director to Iraq, said:

“The United States is the leading humanitarian assistance provider in Iraq. We are pleased to celebrate five years of fruitful partnership with the WHO and stand committed to working with the Government of Iraq and other partners to provide critical services to Iraq’s most vulnerable populations.”

(Source: UN)

The post WHO marks 5 Yrs of Strategic Partnership with USAID in Iraq first appeared on Iraq Business News.

Posted on

UNICEF Iraq gets $26m from Germany for COVID Response

UNICEF receives US$26 Million from the Government of Germany to support the provision of basic services and the COVID-19 response in Iraq

The funding will allow 1 million children and adolescents to have continued access to learning through a combination of approaches such as blended learning and 50,000 vulnerable people to receive critical child protection services

The Government of Germany has contributed $26 million to UNICEF to support UNICEF in its ongoing efforts to assist the Government of Iraq in strengthening its systems and improve access to quality basic services for children and their families in the context of COVID-19. This amount brings the German Government’s total contributions to UNICEF in Iraq to over 200 million dollars since 2015.

The funding includes support for measures addressing the impact of COVID-19 by ensuring communities continue to receive essential water, sanitation, education and child protection preventive and response services. This will include the provision of personal protective equipment to 20,000 healthcare providers and hand sanitizer gel, soap bars and hand hygiene promotion to over 200,000 people.

“This funding is crucial as we support Iraq to increase access to basic services and bolster the national COVID-19 vaccination campaign. UNICEF thanks the Government of Germany for this timely support and partnership to accelerate our efforts to ensure every child in Iraq has access to safe water, education, social and child protection services when required,” said Sheema SenGupta, UNICEF’s Representative in Iraq.

“Children belong to the most vulnerable members of the Iraqi population, especially those living in IDP camps. I was very touched recently by my visit in a UNICEF-built school in Shariya Camp”, said GER Ambassador to Iraq, Martin Jäger. “Germany is funding UNICEF activities to make sure that Iraqi children grow up equipped with what they need most: health and education, because we can only overcome the Covid pandemic together, it is a global challenge where no one is safe until everyone is safe.”

An estimated 1 million children and adolescents will have continued access to learning through a combination of approaches such as blended learning, education TV & online portals and self-learning materials. At least 50,000 people will receive critical child protection services mainly from high-risk areas across Iraq and areas with vulnerable populations, such as camps for the internally displaced and returnee community areas.

In addition, UNICEF will support provision of access to safe, equitable, gender-inclusive water and sanitation services for over 700,000 vulnerable people and their families in targeted governorates, including community-focused hygiene promotion and improvement of WASH services in schools and healthcare facilities.

The project will primarily benefit children and young people, who make up more than half the population of Iraq. As the country marks two years since the pandemic was declared, the number of children and young people estimated to be under the poverty line has doubled. Children and young people are also the most at risk of experiencing poverty, service disruptions in critical basic services like primary health, water sanitation and hygiene, education and increase in rights violations.

UNICEF, in collaboration with the Government of Iraq and partners, will continue to work on long-term sustainability of national systems by strengthening national capacity to provide integrated access to basic services with the goal of enabling children to overcome poverty, enjoy their rights and fulfil their full potential.

(Source: UN)

The post UNICEF Iraq gets $26m from Germany for COVID Response first appeared on Iraq Business News.

Posted on

5K Run to help Iraq’s most Vulnerable Children

From Iraq Solidarity News (Al-Thawra). Re-published with permission by Iraq Business News.

Global 5K run aims to help Iraq’s most vulnerable children

Liz McRae is the Executive Director of the Iraqi Children Foundation and in this interview, Hussein Al-alak speaks with Liz McRae about the work of the ICF, along with finding out more about their upcoming ‘In Their Shoes‘ global 5K run, on May 21st, 2022.

Who are the Iraqi Children Foundation?

The Iraqi Children Foundation (ICF) intervenes in the lives of orphans and street children who are vulnerable to abuse, neglect, and exploitation by criminals, traffickers and extremists. The organization was set up ten years ago by Americans who saw the need to help rebuild Iraq after so many years of conflict.

More than 800,000 children were orphaned as a result of the Iraq War, and the ISIS occupation displaced another 1.3 million. Our vision is that all children in Iraq have a voice, and are empowered to reach their full potential. All our programs have this goal in mind.

We help vulnerable children through programs like “The Hope Buses”; we convert used city buses into colorful, child friendly classrooms. Each bus has two teachers and a social worker, and serves around 50 children with tutoring, nutrition, health care, social services, practical life lessons, community, and fun.

Another program is called “The Street Lawyers”; a team of lawyers who provide legal protection for children who are targeted by criminals and traffickers, abused by employers, or are facing other risks. They also assist children to get their papers so that they can go to school.

You were recently in Iraq for the ICF, can you tell us more about this?

It was a privilege to travel to Iraq this past month, to visit our programs and meet with our partners. It is so important to experience our programs first hand. During this trip, I visited our Hope Buses and Street Lawyers in Baghdad, and our Center for Girls in Mosul.

Something that stood out to me when visiting our projects was how happy and comfortable the children are when they are at the Hope Bus or our Girls Center. The staff are so kind and caring, and the children are all looking healthy and content. The hardest thing to see was the number of children waiting outside the Hope Buses and peering inside, wishing that they could join in the fun and learning.

Will you tell us more about the In Their Shoes 5K?

Our “In Their Shoes” 5K is a fun run which we hold in Washington D.C. each year. It is an opportunity for people from all walks of life to get together and stand in solidarity with the children of Iraq. This year is our 10th Anniversary event, so we hope that many people can join us. It’s a fun family event with face painting, juggling, and snacks. During COVID, we started providing a virtual option for our race as well, so folks can join us from anywhere in the world.

How can people across the United Kingdom get involved?

We hope lots of people from the UK can join us this year – we want to send a message to the world that Iraqi children matter, and that we stand in solidarity with them. Signing up for the race is the best way you can help ICF and these kids – we need help to provide support to so many at-risk children in Iraq.

You can sign up and register as a virtual participant, and we will send you a finishers medal.

The post 5K Run to help Iraq’s most Vulnerable Children first appeared on Iraq Business News.

Posted on

Iraq’s Economic Update — April 2022

Iraq’s economy is gradually recovering from the twin shocks of the pandemic and collapse in oil prices in 2020. Both oil and non-oil growth are on track to reach their pre-pandemic levels as oil production increases and the easing of COVID-19 restrictions restores domestic economic activity.

Fiscal and external deficits are back to surpluses as oil prices continue to surge. Growth in the medium term is projected to be driven by the oil sector as OPEC+ production cuts are phased out. The outlook remains subject to significant risks including uncertainties relating to the impact of geopolitical tensions, the ongoing pandemic, security challenges, and climate change.

Recent Developments

Iraq’s economy is gradually rebounding following the deep economic strains of the COVID-19 pandemic. Real GDP is estimated to have edged up by 1.3% in 2021, after a sharp contraction of 11.3% in 2020. The rebound was mainly driven by the non-oil sector which grew by 6% in 9 months of 2021-2021 year-on-year (y/y), underpinned by a strong performance of the high contact sectors including transport, accommodation, and retail sectors.

However, agriculture and construction contracted by 17.5% and 36.8% respectively, following severe droughts, energy outages, and the rising global price of inputs. In 9M-2021, oil GDP contracted by 4%(y/y) as Iraq adjusted its oil production as per the OPEC+ agreement. Headline and core inflation edged up to an average of 6% and 6.6%(y/y) in 2021, respectively, following the 23% devaluation in December of 2020 and the gradual recovery in domestic demand.

Outlook

The turnaround in oil markets has significantly improved Iraq’s economic outlook in the medium term. Overall growth in 2022 is now forecast at 8.9% as OPEC+ quotas end and Iraq’s production surpasses its pre-pandemic level of 4.6 mbpd. Growth in the outer years is projected to remain modest at 3.7% on average as oil production moderates.

Non-oil GDP growth is projected to converge to its long-term potential growth trend in part aided by higher investments that would be financed through the oil windfall. However, growth is forecast to remain constrained by the economy’s limited absorptive capacity and other inefficiencies.

Click here to download the full report.

(Source: World Bank)

The post Iraq’s Economic Update — April 2022 first appeared on Iraq Business News.

Posted on

Iraqi Working Group to coordinate with Iran on Gas Supply

By John Lee

Iraqi Prime Minister Mustafa al-Kadhimi has ordered that a working team from the Ministry of Electricity travel to Iran to solve problems related to the supplying of gas.

At a meeting with the Electricity Ministry and senior officials on Sunday, there was discussion about the high electricity demand in summer, and how to remove obstacles relating to the production and distribution of electricity.

The meeting addressed plans to protect electric pylons from sabotage, and the status of the rehabilitation work on the Baghdad / Baiji 400KV line.

(Source: Office of the Iraqi Prime Minister)

The post Iraqi Working Group to coordinate with Iran on Gas Supply first appeared on Iraq Business News.