Cursor International executes projects and collaboration activities across several industries.
By John Lee.
According to a report from Reuters, oil production in Iraqi Kurdistan could almost halve by 2027 if there is no new exploration or major investment in the sector.
Click here to read the full report.
(Source: Reuters)
The post Kurdistan Oil Output “Could Halve without Investment” first appeared on Iraq Business News.
Gulf Keystone Petroleum (GKP) has today announced its results for the half year ended 30 June 2022.
Jon Harris (pictured), Gulf Keystone’s Chief Executive Officer, said:
“With the strengthening oil price and increased production, we have delivered strong profitability and cash flow generation in the first half of the year. As we progress towards approval of the Field Development Plan, we have continued to develop the Shaikan Field and recently resumed drilling with the spud of SH-16. We have paid a record $190 million of dividends in 2022 and are pleased today to announce an incremental interim dividend of $25 million, increasing total dividends declared this year to $215 million. While delivering a sector leading dividend yield, we have also maintained a strong balance sheet, redeeming our $100 million bond leaving the Company debt free.
“Looking ahead to the rest of the year, we are focused on progressing towards FDP approval and achieving our production and opex guidance as we continue to optimise production from the field while maintaining a rigorous focus on costs. We have raised our 2022 capex guidance to $110-$120 million as we have added the drilling of SH-16 and are progressing initial procurement activities for the installation of water handling facilities, which will enable us to unlock additional production from our wells in the future.
“We remain focused on balancing investment in growth with shareholder returns. Continued robust cash generation provides flexibility to consider funding future capital expenditures and further distributions to shareholders, while preserving adequate liquidity.“
Highlights to 30 June 2022 and post reporting period
Operational
Financial
Outlook
Shareholder distributions
(Source: GKP)
The post GKP Profits more than Double first appeared on Iraq Business News.
From the Kurdistan Regional Government:
The Kurdistan Regional Government strongly condemns the letter issued on 23 August 2022, by Iraq’s State Oil Marketing Organization (SOMO) that threatens legal action against buyers and traders of crude oil produced in the Kurdistan Region.
SOMO’s letter is nothing more than another drip in a stream of disinformation published by federally-owned state organisation as part of a political fight, a fight which sadly includes an attempt by certain parties in Baghdad to undermine the Federal Constitution of Iraq. The letter is also intended to undermine the continuing good-faith dialogue between the Kurdistan Regional Government and the Federal Government. That dialogue seeks to agree on a plan for the future management of Iraq’s energy resources and revenues in line with the Federal Constitution.
SOMO’s letter relies on a politically motivated opinion by a panel of lawyers pretending to be the “Federal Supreme Court of Iraq”.
But there is no Federal Supreme Court and there is no binding decision. This is because the Federal Supreme Court has not yet been formed in accordance with the Federal Constitution. The panel in Baghdad therefore is not the Federal Superme Court and the opinions of the panel of pretenders carry no legal weight in Iraq or elsewhere. To suggest otherwise, as SOMO and others in Baghdad do, is to further a deception. It is a deception that undermines the Federal Constitution and threatens the republic. This political assault on the Federal Constitution is motivated by a desire to return Iraq to the centralisation of unconstrained power from a horrific past era.
Article 92(2) of the Constitution requires that the Iraqi Council of Representatives enact a law – by a two-thirds majority – to determine the workings of the Federal Supreme Court. No such law has been enacted. Iraq therefore does not have a constitutionally established Federal Supreme Court. The panel of lawyers that issued the 15 February 2022 opinion has no constitutional authority to do so.
The Kurdistan Regional Government has neither acquiesced nor stood aside. On 15 February 2022, the day of the so-called Federal Supreme Court decision, the Government issued a statement describing the decision as unjust, unconstitutional, and illegitimate.
On 28 February 2022, a joint statement was issued from Kurdistan Region Presidency, from the Kurdistan Region Parliament, and from the Judicial Council of the Kurdistan Region of Iraq. The statement was supported by KRG’s Prime Minister. The statement described the so-called Federal Supreme Court decision as unconstitutional and called for the establishment of a legitimate Federal Supreme Court in accordance with Article 92 of the Constitution. Similar statements followed in March.
On 4 June 2022, the Judicial Council of the Kurdistan Region of Iraq issued a further statement setting out that Iraq does not have a constitutionally established Federal Supreme Court, that the body that issued the 15 February 2022 decision had no authority to do so, that the management of all of the oil and gas fields of the Kurdistan Region fell within the exclusive jurisdiction of the Government, and that Kurdistan Oil and Gas Law was fully in accordance with the provisions of the Federal Constitution. The Judicial Council is an independent body made up of leading jurists in the Kurdistan Region.
On 5 June 2022, the Kurdistan Regional Government started proceedings before the courts of the Kurdistan Region against Federal Minister of Oil. It seeks a comprehensive declaration of the constitutionality of the Kurdistan Oil and Gas Law and related matters and of the illegitimacy of opinion of the panel pretending to be the Federal Supreme Court.
Neither SOMO nor any other spokesman in Baghdad has even attempted to justify the legitimacy of the so called Federal Supreme Court. This is because the Federal Supreme Court is obviously illegitimate. This inconvenience is understood in Iraq, but perhaps less understood outside of Iraq. Given the fatal weaknesses in Baghdad’s institutions, and the fatal weakness in Baghdad’s arguments, Baghdad’s strategy is to fabricate a story to create market uncertainty outside of Iraq in respect of the Kurdistan Region. The statements and threats from Baghdad should be understood as such and should be dismissed. The truth is found clearly and unequivocally in the Federal Constitution and the hope of the Iraqi people that Iraq remains a truly federal republic.
The rights of the Kurdistan Region to develop and produce hydrocarbon resources within the boundaries of the Region continues as provided by the Federal Constitution and Kurdistan law. Oil produced in the Kurdistan Region continues to be produced, to be shipped, to be sold, to be refined, and to be consumed. Investment interest remains and production is expected to increase.
The Kurdistan Regional Government remains fully committed to the process of mediation and dialogue to resolve outstanding differences with the Federal Government on the management of oil and gas in Iraq. Those differences, like any other differences of opinion, must be resolved in accordance with the Federal Constitution and the constitutional rights of the people of the Kurdistan Region and all of Iraq. Until that time, the Kurdistan Regional Government will continue to take vigorous steps to defend those rights.
(Source: KRG)
The post KRG Condemns SOMO Threats to Buyers of Kurdish Crude Oil first appeared on Iraq Business News.
Writing in Oil Price, Simon Watkins argues that while Iraq’s plans to increase oil production are, in broad terms, entirely realistic, the extent of Iraq’s ultimately recoverable oil resources is subject to a large degree of uncertainty.
Click here to read the full article.
The post Are Iraq’s Ambitious Oil Production Goals Feasible? first appeared on Iraq Business News.
DNO ASA, the Norwegian oil and gas operator, today reported strong second quarter operational and financial results powered by high oil and gas prices and by solid production in its operated flagship Kurdistan Tawke license.
Spurred by quarterly revenue of USD 361 million and free cash flow of USD 167 million, the Company reduced debt and exited the quarter in a positive net cash position for the first time since 2018.
“DNO is committed to put its capital to work in its core competency and capture new opportunities created as peers and even some of the largest European companies scale back spending and focus instead on harvesting,” said Executive Chairman Bijan Mossavar-Rahmani. “We believe in the oil and gas business and in our responsibility to all stakeholders, including host governments who want to capitalize on current prices and consumers who now call for more production, not less,” he added.
Operational cash flow totaled USD 341 million, including USD 50 million towards arrears built up by Kurdistan from non-payment of certain 2019 and 2020 Tawke invoices. These arrears, which stood at USD 259 million at yearend 2020, were reduced to USD 87 million as of 30 June 2022, excluding interest.
The Company’s operational spend in the second quarter totaled USD 198 million in line with the USD 800 million projection for the year. During the quarter, operational spend of USD 81 million in Kurdistan was divided between the Tawke license (USD 66 million) and the Baeshiqa license (USD 15 million); operational spend in the North Sea stood at USD 117 million.
Operating profit dropped to USD 81 million from USD 236 million in the previous quarter due to asset impairments of USD 127 million primarily related to the Ula area in the North Sea and expensed exploration of USD 48 million.
The Company reduced its interest-bearing debt through a USD 200 million bond redemption and exited the quarter with cash deposits of USD 801 million. With USD 671 million in bond and reserves-based lending debt, net cash stood at USD 129 million.
Gross production at the Tawke license averaged 106,900 barrels of oil per day (bopd) during the second quarter, of which Peshkabir contributed 62,300 bopd and Tawke 44,600 bopd, the latter representing the first quarterly production increase since 2015 at this legacy field as new wells are drilled, workovers conducted on existing ones and gas injection continued.
Of total Kurdistan production, 80,400 bopd were net to DNO’s interest. North Sea net production averaged 11,600 barrels of oil equivalent per day (boepd), bringing the Company’s total quarterly net production to 92,000 boepd.
In the second quarter, four new production wells were brought onstream in the Tawke license with three at Tawke and one at Peshkabir. Together with wells drilled in the first quarter, natural field decline has been arrested and reversed, including at Tawke, raising the Company’s full-year projection to 107,000-109,000 bopd.
Following government approvals, DNO commenced trucking of production in mid-June from the Zartik-1 discovery well in the operated Baeshiqa license for export at an average rate of 600 bopd. Production from the well has been choked back as the Company targets zones with lower gas-to-oil ratios to avoid flaring. Development of the license continues with the drilling of Zartik-2 and Zartik-3, to be followed by Baeshiqa-3 in the fourth quarter.
In the North Sea, operated Brasse field development progressed into front end engineering and design ahead of planned project sanction by yearend 2022. The Company remains an active North Sea explorer with three more exploration wells to be drilled this year in addition to the four already drilled in the first half of 2022, one of which, Kveikje (DNO 29 percent), is considered a likely commercial discovery, as previously reported.
Key figures
| Q2 2022 | Q1 2022 | Full Year 2021 | |
| Gross operated production (boepd) | 107,178 | 106,465 | 108,713 |
| Net production (boepd) | 91,937 | 92,548 | 94,477 |
| Revenues (USD million) | 361 | 339 | 1,004 |
| Operating profit/-loss (USD million) | 81 | 236 | 321 |
| Net profit/-loss (USD million) | 72 | 140 | 204 |
| Free cash flow (USD million) | 167 | 152 | 362 |
| Net debt (USD million) | -129 | 27 | 153 |
(Source: DNO)
The post DNO Raises Kurdistan Output Forecast first appeared on Iraq Business News.
Genel Energy notes that DNO ASA, as operator of the Tawke PSC (Genel 25% working interest), has today issued an update on licence activity.
Gross production at the Tawke licence averaged 106,900 bopd during the second quarter, of which Peshkabir contributed 62,300 bopd and Tawke 44,600 bopd, the latter representing the first quarterly production increase since 2015 at this legacy field as new wells are drilled, workovers conducted on existing ones and gas injection continued.
In the second quarter, four new production wells were brought onstream on the Tawke licence with three at Tawke and one at Peshkabir. Together with wells drilled in the first quarter, natural field decline has been arrested and reversed, including at Tawke, raising DNO’s full-year projection to 107,000-109,000 bopd (previously 105,000 bopd).
Genel’s production guidance for 2022 is unchanged, with net portfolio production currently expected to be between 30-31,000 bopd for the full-year.
(Source: Genel Energy)
The post Tawke Oilfield: First Quarterly Production Increase since 2015 first appeared on Iraq Business News.
By John Lee.
The First Vice President of the Iraqi National Oil Company (INOC), Hamid Younis, has said that oil production in Iraq can be increased to 5-to-8 million barrels per day (bpd) “during the coming years.“
He is quoted in a statement from the Iraqi Ministry of Oil, following a meeting that he chaired with officials from Iraqi oil companies to discuss plans to maintain and increase oil production and export.
The Director-General of the Iraqi Oil Exploration Company, Ali Jassim, said that the next phase will see remarkable activity in the exploration sector, including operations in the Western Desert and Nineveh Governorate.
(Source: Ministry of Oil)
The post Iraq Planning Increased Oil Production in “Coming Years” first appeared on Iraq Business News.
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 |
Summary
Outlook
(Source: Genel Energy)
The post Genel Energy: Strong Results, but Shares Down first appeared on Iraq Business News.
By John Lee.
The CEO of the National Iranian Oil Company (NIOC) has said that Iran is ready to export technical and engineering services to Iraq.
Addressing a meeting of the Joint Working Group on Iran-Iraq Oil Cooperation, Mohsen Khojastehmehr, said:
“Iran wants to benefit from Iraq’s participation in the development of the oil and gas industry …
“It is time for Iran and Iraq to take practical steps to cooperate in the field of oil and gas activities and the scientific, technological and educational sectors.“
The Iraqi delegation to the meeting was led by Deputy Minister of Oil, Bassem Mohammad Khedir,
(Source: Shana)
The post Iran “Ready to Export Technical, Engineering Services to Iraq” first appeared on Iraq Business News.
Writing in Oil Price, Simon Watkins examines recent statements by Iraq’s Oil Minister, Ihsan Abdul-Jabbar, that the country aims to increase its crude oil production to 6 million barrels per day (bpd) by the end of 2027.
Click here to read the full article.
The post Could Iraq Dethrone Saudi Arabia as Largest Oil Producer? first appeared on Iraq Business News.