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Writing in Oil Price, Simon Watkins says that China has continued to press home the geopolitical advantage given to it in Iraq following the official end of the U.S.’s ‘combat mission’ in the country with the conclusion of three huge deals, all focused on the oil sector.
Click here to read the full article.
The post China “Tightens its Grip on Iraq” with 3 Major Oil Deals first appeared on Iraq Business News.
By John Lee.
Iraq’s Ministry of Oil has announced preliminary oil exports for January of 99,286,078 barrels, giving an average for the month of 3.203 million barrels per day (bpd), down from the 3.277 million bpd exported in December.
The exports from the oilfields in central and southern Iraq amounted to approximately 96,430,596 barrels, while exports from the Kirkuk fields through the port of Ceyhan amounted to 2,545,656 barrels. Although not stated explicitly, this seems to imply exports to Jordan by truck 309,826 barrels.
Revenues for the month were $8.27 billion, at an average price of $83.25 per barrel.
December’s export figures can be found here.
(Source: Ministry of Oil)
The post Iraq Oil Export Qty Falls in January, but Revenues Up first appeared on Iraq Business News.
By John Lee.
A US court has sentenced the former CEO of Gulf Keystone Petroleum (GKP) to five years in prison for tax evasion.
According to a statement from the US Department of Justice, Todd Kozel used offshore structures, trusts, and bank accounts to conceal a portion of his undeclared income from the U.S. government.
In addition to the prison sentence, Kozel, was sentenced to two years of supervised release and ordered to pay restitution to the IRS in the amount of $29,462,965.23.
The full text of the court statement follows:
Co-Founder And Former CEO Of Foreign Oil Company Sentenced To 60 Months In Prison For Failure To File Tax Returns Causing Over $20 Million In Losses To The U.S. Treasury Damian Williams, United States Attorney for the Southern District of New York, and Thomas Fattorusso, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that TODD KOZEL, the former Chief Executive Officer (“CEO”) of a multi-national foreign oil company, was sentenced in Manhattan federal court to 60 months in prison following KOZEL’s guilty plea to five counts of willful failure to file individual income tax returns for the calendar years 2011 through 2015. U.S. District Judge Kimba M. Wood, who previously accepted Kozel’s guilty plea, imposed today’s sentence.
U.S. Attorney Damian Williams said: “For years, Todd Kozel failed to file income tax returns, or pay the federal tax liabilities that were owed under those returns, despite earning millions of dollars in compensation as the CEO of an overseas oil company. Today’s sentence shows that no one is above the law-all citizens must pay their fair share of taxes, including Americans who earn compensation from working in foreign countries.”
IRS Criminal Investigation Special Agent-in-Charge Tom Fattorusso said: “U.S. citizens are required to pay taxes on worldwide income from all sources, including income earned overseas. Kozel earned tens of millions of dollars, and as a result, was required by law to pay taxes – more than $20 million – on those earnings. By not paying his fair share, he cheated the American people out of millions of dollars.”
According to the Information and other documents filed in the case, as well as statements made during public court proceedings:
Pursuant to the Internal Revenue Code and attendant regulations, all United States citizens and residents who had annual income in excess of a threshold amount are required to report accurately their income, tax obligations, and, where appropriate, any claim for a refund on a United States Individual Income Tax Return, Form 1040 (“Form 1040”), which must be filed annually with the Internal Revenue Service (“IRS”). This obligation applies to all sources of income, including income earned through overseas employment and from foreign financial accounts.
From at least in or about 2004 through at least in or about 2014, TODD KOZEL was the co-founder and CEO of a London-based petroleum company with operations in the Kurdistan Region of Iraq (the “Oil Company”). During the period 2011 through 2015, KOZEL, a United States citizen, earned substantial compensation as the CEO of the Oil Company, totaling more than approximately $66 million during the five-year period. But despite earning this substantial income, KOZEL willfully failed timely to file any personal federal income tax returns for calendar years 2011 through 2015, resulting in well over $20 million in unpaid federal tax liabilities. As part of his criminal conduct, KOZEL used sophisticated offshore structures, trusts, and bank accounts to conceal a portion of his undeclared income from the U.S. government.
* * *
In addition to the prison sentence, KOZEL, 55, of New York, New York, was sentenced to two years of supervised release and ordered to pay restitution to the IRS in the amount of $29,462,965.23.
Mr. Williams praised the IRS-CI for their outstanding investigative work on this case, and thanked the Large Business and International Division of the IRS for its assistance.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Louis A. Pellegrino and Olga I. Zverovich are in charge of the prosecution.
(Source: US Department of Justice)
The post Former CEO of GKP Jailed for Tax Evasion first appeared on Iraq Business News.
By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Iraq-Jordan Oil Pipeline — Financially Costly, Contractually Complex
Since 1983 the Basra-Aqaba, or Iraq-Jordan, oil pipeline (IJOP) has been on and off the screen of the bilateral relation between the two countries.
And from 2011 to date, every Iraqi government had “approved a frame-agreement” relating to the same pipeline, but none of these agreements was published and, thus, nothing known about the terms of these, so claimed, approved agreements!
Scope of the pipeline, route, length, funding, execution, duration and cost have been on a changing course since 2011, but the most dramatic change is the staggering cost, which reportedly, increased from $3 billion to $26 billion between 2016 and 2022!
No surprise, therefore, that this pipeline has been viewed diametrically differently and with absence of full transparency, on the part of the Ministry of Oil (MoO) and its affiliate SCOP, the feasibility of this project remains a pure intelligent guessing.
This article addresses first the different views and what prompted them by recent development and information on the pipeline, then in part two calculates the barrel-cost corresponding to actual pipeline utilization.
Part three examines the re-export options in the comparative, and part four provides cautionary notes on the limitation of cash flow analysis for such a project.
Moving from the quantitative mode to real life environment, part five debates strategic considerations, geopolitical vulnerability and security risks and that is complemented, in part six, by highlighting and identifying the needed contractual and legal modalities; then the article ends with concluding remarks.
Click here to download the full report in pdf format.
Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.
The post Iraq-Jordan Oil Pipeline: Financially Costly, Contractually Complex first appeared on Iraq Business News.
By John Lee.
The General Director of Azerbaijan-based oil services company SOCAR AQS, Samir Mollayev, met with a delegation led by General Director of Iraqi Drilling Company (IDC), Basim Abdulkareem, on Tuesday.
At the meeting held in Socar’s Baku office, he informed the guests about the development of the oil and gas industry in Azerbaijan, and the drilling projects implemented by the company.
As part of the visit, the delegation visited the production and supply bases of the company, as well as the Baku Drilling School, an internationally accredited training centre established by SOCAR AQS.
(Source: SOCAR AQS)
The post Iraqi Drilling Company visits SOCAR AQS first appeared on Iraq Business News.
By John Lee.
Kuwait Energy Basra Limited (KE Basra), an indirect wholly-owned subsidiary of Hong Kong-based United Energy Group (UEG), has entered into the EPCC (engineering, procurement, construction and commissioning) contract with a Chinese consortium to provide a central processing facility including oil treatment system and auxiliary systems at Block 9 in Basra.
The contractor is a consortium formed on 31 December 2020 and consisting of China CAMC Engineering and CNOOC Petrochemical Engineering.
According to disclosure documents lodged with the Stock Exchange of Hong Kong, the contract price is US$593,584,975 and the work should be completed within 33 months from the date of commencement. (The foundation stone for the project has just been laid).
The main purpose of this central processing facility project is to increase crude oil production capacity of Block 9 to 100,000 barrels per day (bpd).
In its statement to the Hong Kong Stock Exchange, UEG added:
“Kuwait Energy Basra Limited is a limited liability company incorporated in British Virgin Islands and an indirect wholly-owned subsidiary of the Company.
“KE Basra is the operator of the Block 9 contract area located in the Basra Governorate, Southern Iraq, pursuant to the Exploration, Development and Production Service Contract with the contracting parties of Basra Oil Company (an Iraqi State Oil Company), KE Basra, Dragon Oil (Block 9) Limited and Egyptian General Petroleum Corporation.“
(Source: UEG)
The post Chinese Consortium wins $594m Iraq Oil Processing Contract first appeared on Iraq Business News.
UK-based Aggreko has announced that it has completed commissioning of the largest flare-gas-to-power project in the Middle East to date at 165 MW capacity.
The plant is situated nearby the Saqala [Sarqala] Field, Garmain block, South East Kurdistan.
The 165 MW modular power plant has run at full capacity for 72 hours in the project’s final site acceptance test (SAT), marking successful on-time, on-budget delivery.
The plant is run on approximately 40 million square cubic feet (SCF) per day of associated petroleum gas (APG) from the Saqala Field, saving 840 tonnes of CO2 per day, and cutting flaring by a third.
Delivered over the course of 2020-2021 against the backdrop of the pandemic, the project was conceived and executed in close collaboration with Kurdistan’s Ministry of National Resources (MNR) and Ministry of Electricity (MOE).
Aggreko also delivered a new 6km gathering pipeline to transport the APG to the power plant, and upgraded 7km of 33 kV and 33km of 132 kV overhead cables to new high tensile low sage (HTLS) conductors in order for the local distribution grid to handle the new power plant’s full output.
Ahmed Mufti, Kurdistan Regional Government’s Deputy Minister of Natural Resources (MNR) said:
“We worked with Aggreko to provide a creative solution to convert flare gas to power in a way that directly benefits the local population and the regional in general, while creating a positive environmental impact and improving air quality.”
Phil Burns, Managing Director for Aggreko Middle East, comments:
“Kurdistan’s Regional Government has been forward-thinking in looking for ways to capture and convert gas that would otherwise be flared, to unlock production and power the local economy. We are extremely proud to have worked with the Ministries to deliver the Middle East’s largest flare gas to power project to date, while upgrading the local infrastructure to the lasting benefit of the community and businesses it serves.”
The project is now contracted to run for four years, delivering power 24/7/365.
Built using 192 MW of modular gas generators, the plant can easily be scaled up or down in response to changing gas volumes.
Approximately 60 Aggreko engineers have delivered the project, with 80 local jobs created directly and indirectly for the site’s delivery and ongoing operation, including 44 local nationals who have already commenced Aggreko’s official training scheme.
(Source: Aggreko)
The post Aggreko completes Flare-Gas-to-Power plant in KRI first appeared on Iraq Business News.
By John Lee.
The President of the Iraqi National Oil Company (INOC) has laid the foundation stone for the $594-million crude oil processing plant at Block 9, within the Al-Fayha Oil Field in Basra Province.
Ihsan Abdul-Jabbar Ismail said that the development is important for the production of light oil, with a target for this project of up to 100,000 barrels of crude oil per day, along with 135 mmscfd of gas at a future stage for electricity production.
Khaled Hamza, General Manager of Basra Oil Company (BOC), said the development of the field was started in 2014 by Kuwait Energy Company (KEC) and continued by the Chinese company UEG [United Energy Group] which acquired KEC, and that the first exploration well was drilled and the results were encouraging.
He stressed that the oil produced from the exploration Block 9 is one of the best types of oil globally.
The CEO of UEG, Sonk Yu [Song Yu, Chief Operation Officer??], said that laying the foundation stone for the development was an important moment for the company.
(Sources: Ministry of Oil, UEG)
The post Work Starts at $594m Oil Processing Plant at Block 9 first appeared on Iraq Business News.
Gulf Keystone has provided an operational and corporate update:
Jon Harris (pictured), Gulf Keystone’s Chief Executive Officer, said:
“We are pleased today to declare an additional interim dividend of $50 million, bringing distributions over the past eight months to $150 million in line with our commitment to balance investment in growth with returns to shareholders.
“Since the beginning of 2022, gross production peaked at just over 50,000 bopd and has averaged c.46,800 bopd, versus the 2021 average of 43,440 bopd. However, the lower productivity of recently completed wells, SH-13 and SH-14, and temporarily curtailed production from SH-12, have resulted in a delay in gross production increasing to 55,000 bopd. 2022 gross average production is expected to be 44,000 to 50,000 bopd.
“GKP’s substantial production base at current oil prices continues to generate significant cash flow and value for Gulf Keystone’s stakeholders. On approval of our recently submitted Field Development Plan, we are well positioned to achieve sustainable growth from the Shaikan Field, which has delivered close to 100 MMstb, and has 489 MMstb of estimated 2P gross reserves remaining.“
Operational
Financial
Outlook
(Source: GKP)
The post GKP declares Divi and gives Update first appeared on Iraq Business News.
By John Lee.
The Secretary-General of Iraq’s Council of Ministers, Dr. Hamid Naim Al-Ghazi [Hamed Al Gazi] has laid the foundation stone for a 200-bed general hospital in Shatra City, in Dhi Qar province.
The hospital will serve the inhabitants of Shatra and the surrounding areas.
UK-based Protechnique will complete the project within 36 months, under the supervision of Japanese engineering firm ITEC and the Iraqi Ministry of Health.
Funding for the $94-million project includes a loan from the Japan International Cooperation Agency (JICA).
(Source: Protechnique)
The post Construction Starts at $94m Shatra Hospital first appeared on Iraq Business News.