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By John Lee.
Three companies have reportedly stopped operations at Kurdistan’s Khor Mor gas field following rocket attacks.
According to Reuters, the companies are Texas-based Exterran, and Turkish subcontractors Havatek and Biltek.
The field is operated by Pearl Petroleum, a consortium led by UAE-based Dana Gas and Crescent Petroleum.
(Source: Reuters)
The post Three Contractors “Quit” Khor Mor Field first appeared on Iraq Business News.
Dana Gas PJSC has announced its financial results for the half year ended 30 June 2022.
In the first six months of the year, the Company generated a net profit of AED 407 million ($111mm) or 5.8 fils per share, an 82% increase compared to an adjusted net profit (excluding reversal of impairment) of AED 225 million ($61mm) in H 1 2021.
The gains in Dana Gas’s profitability in the first half were driven by elevated hydrocarbon prices, the Company’s continued commitment to maintaining a low-cost base and strong operational performance in the Kurdistan Region of Iraq (KRI).
The Company’s revenue for the first six months of the year increased 31% to AED 1,041 million ($284mm) as compared to AED 792 million ($216mm) in H1 2021 and its operating costs dropped 16%. The Company’s realized prices during the first half of the year averaged $87/bbl for condensate and $44/boe for LPG compared to $48/bbl and $32/boe respectively in H1 2021.
Despite the challenging security situation, the Company’s current operations in the KRI have continued uninterrupted. Production from the KRI increased 1% in the first half and the KM250 expansion project has progressed well. During the first half, drilling of the project’s first development well was completed, and drilling operations for the second well are currently in progress. Whilst EPC construction work on KM 250 was suspended in June amid heightened security concerns, the Company is working with the authorities to address security concerns and to resume construction.
Given the strong operational and financial performance the Board expects to maintain its semi-annual dividend payment in keeping with the Company’s dividend policy. The interim dividend will be decided by the Board at its meeting in September.
Dr Patrick Allman-Ward (pictured), CEO of Dana Gas, commented:
“Dana Gas delivered strong half year results, supported by our robust operational performance, low cost base and favourable energy market conditions. Despite an increased uncertainty around the global economy amid high inflation, the outlook for the remainder of 2022 is still encouraging with both energy prices and demand remaining high.”
Operations & Production
The Group’s overall production in H1 2022 was 61,100 boepd, a 5% reduction from 64,000 boepd in H1 2021. This was due to a 9% production drop in Egypt mainly as a result of natural field decline. Production output in the KRI increased by 1%, with production averaging 34,500 boepd in H1 2022 versus 34,300 in H1 2021.
Operations have continued as normal during the period. Heightened uncertainty in the region and subsequent precautionary security measures have impacted the Khor Mor expansion project. As a result, the KM250 project remains on temporary suspension. The Company and its partners are working closely with the KRG to address all concerns and all parties remain committed to implementing the expansion project and resume construction activities as soon as possible.
Liquidity and Collections
The Company’s cash position at the end of H1 2022 stands AED 759 million ($207mm) including AED 436 million ($119mm) held at the Pearl level.
The Group collected a total of AED 660 million ($180 mm) during the H1 2022, with the KRI and Egypt contributing AED 495 million ($135mm) and AED 165 million ($45mm) respectively.
(Source: Dana Gas)
The post Dana Gas: “Strong Operational and Financial Performance” first appeared on Iraq Business News.
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)
The post Production at Khor Mor field unaffected by Rocket Attacks first appeared on Iraq Business News.
By John Lee.
Dana Gas has said that following the incident on the 22nd of June, two further small rockets landed within the Khor Mor Block in the Kurdistan Region of Iraq on Friday and Saturday, respectively.
It says there were no injuries or damage.
In a statement to the Abu Dhabi Stock Exchange, the company says that production operations continue as normal, however the work on the KM 250 expansion project has been temporarily suspended while security enhancements are carried out.
It adds:
“The company is closely coordinating with the KRG who along with the Iraqi government have shown strong support.
“As a response to these attacks the KRG has taken all necessary measures to enhance security measures in Khor Mor including the mobilisation of further armed forces to protect the facilities.“
(Source: Dana Gas)
The post Dana Gas suspends Khor Mor Expansion after more Attacks first appeared on Iraq Business News.
From the Kurdistan Regional Government:
Like citizens across the Kurdistan, I have been deeply troubled by the repeated terror attacks on our people and public infrastructure in recent months. The cowards behind the attacks have resorted to terror tactics because they have lost the court of public opinion in the rest of the country.
Rather than focus on the future, and economic integration to lift all of the country, lawless groups have resorted to rocket attacks on our villages and civilians.
I have spoken by phone with key political partners in the Kurdistan Region and Iraq, and our friends abroad. During my call with Prime Minister Mustafa Kadhimi, I emphasized the need for joint Peshmerga and Iraqi security forces to fill any remaining vacuum in the disputed territories used by lawless groups to recklessly destabilize the whole of the country.
I explained to the Prime Minister that the attacks threaten the country’s electricity provision and the investment climate for all the country, and I have urged him to take public, practical measures to rein in the groups.
I have also directed both Ministers of Peshmerga Affairs and Interior to take all measures necessary to protect critical public infrastructure and oil and gas installations. As part of the plan, we have agreed to reinforce the area with additional forces. More measures will be reviewed in the coming days.
Last night, I also spoke with White House Coordinator for the Middle East and North Africa Brett McGurk. Our American friends, and every investor must remain committed; we cannot give into fear. Over the next few days, I will urge our international friends and partners, and the UN Security Council to renew efforts with Erbil and Baghdad and explore ways for us both to protect against more terror attack.
The KRG deeply values and will defend and protect investments in its oil and gas sector and all public infrastructure. I have made it clear that an attack anywhere on Kurdistan is an attack on all of Kurdistan and its peoples.
In this moment of national concern, I urge our people to stay resolute. This is a blatant attack on our infrastructure, and part of a concerted effort to deter us from our strategic plans and reform agenda. Our resilience will not be shaken.
Masrour Barzani
Prime Minister of Kurdistan Regional Government
(Source: KRG)
The post KRG PM ‘deeply troubled’ by attacks on Khor Mor Oilfield first appeared on Iraq Business News.
Dana Gas (PJSC) informs the market that, a small rocket landed yesterday afternoon within the Khor Mor block in the Kurdistan Region of Iraq.
No damage occurred and production operations continued normally without interruption.
Two contractor staff were treated for minor injuries related to the blast but have returned to work.
The company is cooperating with local security services who are conducting a full investigation and the KRG has enhanced measures and security forces in the area.
(Source: Dana Gas)
The post Two Injured in Rocket Attack at Khor Mor Gas Field first appeared on Iraq Business News.
Dana Gas and its partner, Crescent Petroleum, have reported record sales gas production from their operations in the Kurdistan Region of Iraq (KRI), reaching 452 million cubic feet of gas per day (MMscf/d) at the end of 2021.
The production milestone is the culmination of numerous process improvements at the Khor Mor gas plant, including a bypass project completed in 2020 as well as a de-bottlenecking programme earlier in 2018. Together, the process improvements have grown the production by 50% from 305 MMscf/d in 2018.
Dana Gas and Crescent Petroleum jointly operate the Khor Mor and Chemchemal gas fields on behalf of the Pearl Petroleum consortium, supplying the gas which enables much needed electricity generation in the KRI, and also producing close to 16,000 barrels of condensate and 1,000 tonnes of LPG per day. The successful process improvements will be reinforced by the KM250 expansion project at the plant which is currently under implementation, and will increase total capacity by an additional 55% to 700 MMscf/d by April 2023.
Major works for the US$630 million KM250 expansion project resumed in April, 2021 after a delay of one year due to the COVID pandemic. The project is now on track for the new target start date of April 2023. As part of the expansion works, the Company is also preparing to drill up to five development wells, which are scheduled to commence production in March 2022.
The KM250 Gas Expansion Project is supported by a $250 million financing agreement for 7 years with the U.S. International Development Finance Corporation (DFC) which was announced in September 2021. After completion of the KM250 project, the partners also plan a further KM500 train that would raise production to almost 1 billion cubic feet per day to meet rising demand for cleaner burning natural gas and electricity generation in the Kurdistan Region and all of Iraq.
Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, said:
“The achievement of this production milestone underscores the progress we continue to make at Khor Mor to meet the rapidly growing demand for natural gas in the KRI. Despite the challenges the whole world has faced over the past two years, we are proud to have continued delivering uninterrupted supply of clean-burning natural gas to support the KRI economy and enable a healthy recovery. Meanwhile our major expansion plans at the Khor Mor and Chemchemal fields to target 1 billion cubic feet per day in the coming few years will enable improved services across the region for years to come.”
Dr Patrick Allman-Ward (pictured), CEO of Dana Gas, said:
“This milestone is testament to our people and their hard work making consistent production growth possible at our Khor Mor gas plant. Our continued investments since 2018, notably the Khor Mor de-bottlenecking and bypass projects, have allowed us to deliver reliable supplies of clean energy to support the KRI economy and its people, with enhanced economic and environmental benefits which will increase as we further grow production.”
Total investment by the Pearl Petroleum consortium exceeds US$2.3 billion to date, with total cumulative production of over 360 million barrels of oil equivalent (boe) of natural gas and liquids. The uninterrupted supply of gas to power plants in Erbil, Chemchemal and Bazian provides over 80% of the KRI’s power generation and has resulted in significant fuel cost savings through substitution of diesel representing both environmental and economic benefits for the Kurdistan Region and Iraq as a whole.
The displacement of diesel fuel for power generation in the KRI with gas has also enabled emissions savings of 42 million tonnes of CO2, thereby making a major contribution to reducing greenhouse gas emissions and reducing local air pollution in the region as well as supporting the transition to better energy sources to tackle global climate change.
(Source: Dana Gas)
The post Dana Gas achieves 50% Gas Production Growth in 3 yrs first appeared on Iraq Business News.
Pearl Petroleum, the consortium led by Dana Gas and Crescent Petroleum of the UAE, has signed a $250 million financing agreement with the U.S. International Development Finance Corporation (DFC) to support the gas expansion works currently under way at the Khor Mor gas plant in the Kurdistan Region of Iraq (KRI).
DFC is the development finance arm of the U.S government and proceeds from the 7-year DFC financing will support an increase in gas production capacity by 50% to 690 million standard cubic feet (scf)/day to meet rising demand for clean natural gas for electricity generation and industry in the KRI. The total project cost is $630 million and the remaining financing has already been secured through a regional bank facility and the EPC contractor.
The KM-250 project is the first stage of a two-train expansion project at Khor Mor that aims to boost total production capacity to approach 1 billion scf/day. Work resumed in April 2021 after onsite construction was halted last year due to the COVID pandemic and is currently on track for completion by April 2023.
Total investment by Pearl Petroleum at Khor Mor to date exceeds US$2.1 billion with total cumulative production of over 341 million barrels of oil equivalent (boe) in natural gas and liquids. The uninterrupted supply of gas to power plants in Erbil, Chemchemal and Bazian has resulted in significant fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole.
The gas produced to date has enabled emissions savings of 42 million tonnes of CO2 by displacing diesel fuel in power generation in the KRI, thereby making a major contribution to reducing greenhouse gas emissions and local air pollution in the region as well as supporting the transition to better energy sources to tackle global climate change.
Between 2018 and 2021, the Khor Mor Gas Plant also benefitted from a 45% production increase through an optimization of the facility bringing current total production to 106,000 barrels of oil equivalent per day (boepd). The project is today the largest regional private sector upstream gas operation in Iraq.
Mr. Majid Jafar (pictured), CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:
“This financing agreement with DFC underscores the importance of developing the natural gas resources in the KRI to support regional economic development and growth. Despite the global challenges presented by the COVID pandemic, we have continued to maintain our record of uninterrupted operations and even managed to grow production. The DFC agreement is a testament to our successful track record and further highlights the potential of these resources and the bright future for the KRI.”
Dr. Patrick Allman-Ward, CEO of Dana Gas, added:
“With our partners in Pearl Petroleum we are proud to be further developing the gas sector of the Kurdistan Region of Iraq, delivering expanded supply of cleaner energy, and supporting local economic development. This agreement underscores our continued confidence in the region and its long-term prospects.”
Mr. Dev Jagadesan, Acting CEO of DFC, said:
“DFC’s investment in the Khor Mor expansion will substantially increase access to energy for people all across the Kurdistan Region of Iraq. This highly developmental project represents the United States’ continuing investment in the KRI.”
In April 2007, Dana Gas and Crescent Petroleum entered into an agreement with the KRG for exclusive rights to appraise, develop, produce, market, and sell petroleum from the Khor Mor and Chemchemal fields in the KRI. Production from a newly built plant at Khor Mor began just 15 months later, in October 2008, an industry record. In 2009, Pearl Petroleum was formed as a consortium with Dana Gas and Crescent Petroleum as the majority shareholders, and with OMV, MOL, and RWE joining the consortium subsequently with a 10% share each.
Full-time staff at the operation number over 500, with over 85% local staff, including many in senior management positions. The companies have implemented a corporate social responsibility program to support local communities with equipment and supplies to deal with the COVID pandemic such as ventilators, sanitizers and protection equipment, in addition to a pledge to donate 100,000 vaccines to be administered in those local communities. This is in addition to ongoing support with local education, health and power supply as well as humanitarian aid for persons displaced from conflict zones as well as orphans. These initiatives assist the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital.
(Source: Dana Gas)
The post Khor Mor gets $250m Financing from DFC first appeared on Iraq Business News.
By John Lee.
Dana Gas PJSC announced that its H1 2021 collections from the Kurdistan Region of Iraq (KRI), and Egypt have increased 106% year-on-year to $185 million (AED 678m), the highest level in more than five years.
Dana Gas, which owns a 35% stake in Pearl Petroleum, saw its share of collections from sales of condensate, LPG and gas in the KRI jump 85% to $87 million in the first half 2021 as compared to $47 million in the same period the previous year.
The Company received cash dividends of $48.3 million from Pearl Petroleum over this period. For the same period, the Dana Gas share of Pearl Revenue was $87 million, EBITDA $74 million, Net Income $57.4 million, Cash Balances $61 million and Gross Debt $93 million.
The Company share of total KM 250 expansion CAPEX is $220 million, which will be funded at the Pearl level. Dana Gas share of Pearl Petroleum production for the first half 2021 averaged 150 MMscf/d of gas, 5,250 bbls/d condensate and 350 MT/d of LPG.
In Egypt, Dana Gas collected $98 million during H1 2021, compared to $43 million received in the same period of 2020, representing a 128% increase.
Dr Patrick Allman-Ward, CEO of Dana Gas, said:
“This is one of our best collection periods in the past several years, driven and supported by the strong rebound in oil prices. The respective governments of both the KRI and Egypt are meeting their payment obligations, ensuring the petroleum industry investors are receiving their current monies on time and catching up on overdue payments.
“This provides us with the confidence to reinvest in our operations, notably in the KRI where our expansion plans are well underway. We are in the process of constructing our new KM250 gas train which is on track for first gas in Q2 2023. In Egypt, we continue to work diligently to maintain production and to prepare for drilling our exciting exploration well in our offshore Block 6 Concession Area which holds material potential of over 20 Tcf of gas resources.“
(Source: Dana Gas)
The post Dana Gas Expansion Plans “Well Underway” in Kurdistan first appeared on Iraq Business News.
Dana Gas and its partner Crescent Petroleum have announced the full resumption of the expansion project at the Khor Mor field in the Kurdistan Region of Iraq (KRI), which the companies jointly operate on behalf of the Pearl Petroleum consortium.
The KM250 expansion involves further investment of US$600 million to add 250 million cubic feet per day of much-needed additional gas production to supply the local power stations. The project construction work had been put on hold due to the COVID pandemic but is now on track for a new target start date of April 2023, after agreement to lift the force majeure with both the Kurdistan Regional Government (KRG) and the contractor [Exterran].
Under a Gas Sales agreement signed in March 2019 with the KRG Ministry of Natural Resources, Pearl Petroleum will sell the additional quantities of gas to supply the power stations with affordable and environmentally cleaner fuel, and further enhance electricity supplies. Today over 80% of the KRI’s electricity generation is enabled by the gas produced by the companies.
Current production at the Khor Mor field is 440 million cubic feet per day of natural gas as well as 15,700 barrels per day of condensate and 1,020 tonnes of liquified petroleum gas (LPG), or a total of 110,400 barrels of oil equivalent (boe) per day, making it the largest overall producer in the KRI and the largest private sector upstream gas operation in Iraq. After the KM250 train, there are plans to add a further KM500 train which would take production to almost 1 billion cubic feet per day by 2024.
Total investment to date exceeds US$2 billion with total cumulative production of over 332 million barrels of oil equivalent (boe), which has resulted in significant fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. In addition 43 million tonnes of CO2 emissions have been eliminated by displacing liquid fuels, which in turn has made a positive contribution to tackling global climate change as well as reducing local air pollution.
Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:
“After a year of delay due to the COVID pandemic, we are pleased to fully resume the KM250 expansion project to invest US$600 million and grow the gas production almost 60% within 2 years from now, supporting the local electricity provision even further. Despite the challenges the whole world has faced over the past year we have kept our operations safe and managed to grow production and we are grateful to all our staff and to the KRG for its support.”
Dr. Patrick Allman-Ward, CEO of Dana Gas, added:
“With our partners in Pearl Petroleum we are proud to be investing further in the gas sector of the Kurdistan Region of Iraq, delivering a reliable source of cleaner energy, and supporting local economic development. The continuing receipt of payments in a timely manner gives confidence for our continued investment commitment as we enter the next exciting phase of growth with the Khor Mor expansion, which will be carried out under strict health protocols to ensure the safety of our staff and service providers.”
(Source: Dana Gas)
The post Dana Gas Resumes $600m Expansion in Iraq first appeared on Iraq Business News.