Category: Oil News

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DNO reports Third Quarter 2021 Results

DNO ASA, the Norwegian oil and gas operator, today reported third quarter revenues of USD 253 million, a 38 percent quarter-on-quarter increase driven by higher North Sea sales and strengthening commodity prices.

The Company’s operating profit climbed seven percent to USD 65 million, weighed down by non-cash net impairments of USD 40 million primarily related to revised Ula area cost and production profiles in the North Sea.

Cash flow from operating activities totaled USD 163 million in the third quarter. Net debt was reduced by USD 36 million to USD 360 million, the lowest level since 2018.

“Like much of the rest of our resilient industry, we are recovering rapidly from the early ravaging of the oil and gas markets by the runaway pandemic,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “We are back delivering value to our host countries, shareholders and other partners in an efficient and responsible manner,” he added.

Gross operated production at the Company’s flagship Tawke license in Kurdistan averaged 105,200 barrels of oil per day (bopd) in the third quarter, of which the Peshkabir field contributed 59,900 bopd and the Tawke field 45,300 bopd. Of the total, 78,900 bopd were net to DNO. In the North Sea, net production averaged 13,100 barrels of oil equivalent per day (boepd), bringing the Company’s total third quarter net production to 92,000 boepd.

DNO’s USD 110 million Peshkabir-Tawke gas project, which was commissioned in mid-2020, has injected eight billion cubic feet of otherwise flared gas through the end of the third quarter, capturing 480,000 tonnes of CO2 equivalent. In September, the Company initiated a USD 25 million second phase of the gas capture project to reinject and retain gas in the Tawke reservoir and avoid flaring. Having already eliminated routine venting of methane in operations in 2019, DNO recently launched a leak detection and repair initiative to measure, monitor and mitigate fugitive methane emissions.

Elsewhere in Kurdistan, commerciality was declared on the DNO-operated Baeshiqa license and plans submitted for a fast-track development.

DNO’s active North Sea exploration program notched up a success in the third quarter with appraisal drilling on the 2020 Bergknapp discovery (DNO 30 percent) resulting in a 35 percent upgrade of DNO’s recoverable resource estimate. Also during the quarter, DNO made an oil discovery on the Gomez prospect (DNO 65 percent and operator). Due to uncertainty of producibility, no estimate of recoverable volumes has been established pending further analysis. Another third quarter 2021 appraisal well, Black Vulture (DNO 32 percent), was dry. Following the end of the quarter, the Mugnetind exploration well (DNO 30 percent) encountered limited hydrocarbons and is unlikely to be commercial.

The Brasse development (DNO 50 percent and operator) is on track for a 2022 project sanction with DNO recently entering into a strategic framework agreement with Technip FMC covering subsea deliveries (SURF and SPS).

During the third quarter, the Company completed the placement of USD 400 million of new five-year senior unsecured bonds with at a coupon rate of 7.875 percent, lowering DNO’s average interest rate on its debt while extending the maturity profile.

A videoconference call with executive management will follow today at 15:00 (CET). Please visit www.dno.no to access the call.

(Source: DNO)

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Iraq Oil Exports increase in October

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for October of 96,708,660 barrels, giving an average for the month of 3.120 million barrels per day (bpd), up slightly from the 3.081 million bpd exported in September.

The exports from the oilfields in central and southern Iraq amounted to approximately 93,386,975 barrels, while exports from Kirkuk amounted to 3,011,917 barrels. Exports to Jordan by truck totaled 309,768 barrels.

Revenues for the month were $7.680 billion at an average price of $79.376 per barrel.

September’s export figures can be found here.

(Source: Ministry of Oil)

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Iraq, Saudi Arabia “to sign $billions of Energy Contracts”

By John Lee.

Iraq and Saudi Arabia are reportedly about to sign energy deals worth tens of billions of dollars.

The state-run Al-Sabaah newspaper quotes Oil Minister Ihsan Abdul Jabbar (pictured) as saying that Iraq is negotiating with oil giant Saudi Aramco to enter as a partner in contracts for gas exploration in the Western Desert.

He added that Iraq has intensified discussions with the Saudi company ACWA Power to build water desalination facilities and clean energy plants.

ACWA Power launched a successful IPO on the Saudi Stock Exchange last month, the biggest IPO on that exchange since Saudi Aramco’s in 2019.

(Source: Al Sabaah)

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Fighting Climate Change “an Economic Opportunity” for Iraq

Writing in the Financial Times, Iraqi President Barham Salih argues that addressing climate change represents an opportunity for Iraq and the region to introduce measures that will leave them on a more solid foundation as they face the challenges of the decades to come.

Click here to read the full article (subscription required)

(Picture: Tigris river in central Baghdad; Credit: Christian Lindgren)

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The Massive Challenge of Climate Action in Iraq

By Lizzie Porter, for The New Statesman. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

The massive challenge of climate action in oil-dependent Iraq

Oil provides 90 per cent of Iraq’s revenue. Even as farmland dries up, fractured governance makes reform seem almost impossible.

Click here to read the full story.

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CITIC Construction Wins $3.7bn Iraq Power Deal

By John Lee.

China’s CITIC Construction has won the bid for the first and second phases of AI Khairat heavy oil power plant in Iraq.

Yang Jianqiang, Deputy President of CITIC Construction, held talks with Mazin Wajih, Chairman of Harlow International, in Dubai representative office, and received the letter of acceptance issued by Mazin Wajih.

It is estimated that the contract value of each phase of the project is about $2.85 billion.

The AI Khairat heavy oil power plant is located in Karbala Province in south-central Iraq, about 100km away from Baghdad, next to the Karbala refinery, which provides its by-product heavy oil for the power plant as fuel.

The total installed capacity of the project consists of 8 power generating units of 400MW each, of which 4 units will be constructed in each phase and put into operation in batches.

As the EPC general contractor of the project, CITIC Construction will be responsible for designing, procurement, construction, installation, commissioning and operation and maintenance of the project for a period of ten years, and assist in financing on the premise that the owner is guaranteed by the Iraqi government.

Wining the bid has made CITIC Construction see another major breakthrough in electric energy market of Iraq following the project of Maisan combined cycle power plant. After the completion of the project, it will become an energy hub around the capital, which will provide power for the reconstruction of Iraq’s post-war industry, help ease the power shortage of residents in central and southern Iraq, improve people’s livelihood and safeguard social stability.

(Source: CITIC)

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IBBC’s Autumn Conference – Open for Business Engagement

IBBC’s Autumn conference is back with a bang and open for business engagement.

On 22nd November this year the overarching conference topic is looking to the future with ‘sustainability’- whether in terms of energy and renewables, the Iraqi economy and its diversification, or sustaining finance, logistics and training. Underpinning much of this is the application of technology and modernising ways to run a successful economy, with the tech forum’s online sessions.

With a successful election now completed and a new government being formed, it’s a good time to discuss the prospects for reform and sustainability.

IBBC members find that the Autumn conference is probably the best forum to meet the leaders in the region and those engaged with provision of supply chains and decision making. Many of Iraq’s industry sectors have regional headquarters in Dubai, which enables the high turnout and interest in the networking opportunities.

The current speaker line-up is probably the best for some years, featuring the Iraqi Minster of Oil H.E. Ihsan Abdul Jabbar Ismaael giving a keynote speech, H.E. Dr Thani bin Ahmed Al Zeyoudi UAE Minister of State for Foreign Trade. Dr Salem Chalabi, President and Chairman of the Trade Bank of Iraq, Iraqi Ambassador to the UAE H.E. Mudaffar Mustafa Al Jubouri and UK ambassador Mr Mark Bryson-Richardson, Mr Simon Penny, UK’s Consul General and Trade Commissioner for the region, and top academic Professor Frank Gunter on the economic outlook for Iraq.

For those engaged with energy, Mr Zaid Elyaseri from BP will be speaking, and Dunia Chalabi will be representing new Iraqi entrants Total, who have signed contracts to invest USD 27 billion in and plan to bring in hundreds of expatriates into Iraq to develop the Ar-Ratawi oil field and build gas capture, solar power and injection water facilities. Leading figures from Oilserve, Ms Sara Akbar, and Hydro-C, Mr Hassan Heshmat, will discuss sustainable energy, and a separate session will be voted to Basrah Gas Company.

The Finance panel includes a stella line up with Emirates Credit Insurance Co, Standard Chartered Bank and IFC. Mr Aziz Khudairi heads the Industry panel and a significant group including Martrade and IBBC Autumn Conference Principal Sponsor Sardar Group.

Finally, and in parallel, an online Tech forum session on Data and its benefits to Government, Economies, business, and citizens, will include speakers from UK’s GDS, British Water, Agri-epicentre, Serco and Mastercard with more to be confirmed.

Overall, the panels will be exploring in more detail how to ensure the current high oil and gas prices can bring investment and rebalance the economy and promote and develop agriculture and enhance the food chain to increase employment and reduce food poverty. These discussions will also address how to improve the water supply and waste reduction and consider the role of clean power generation in relation to climate change and initiatives to improve sustainability.

We look forward to welcoming you to Dubai, or even following us online if you are unable to make it in person.

A pre-conference reception will be held at the Iraqi Pavilion at Dubai EXPO2020 in the evening of 21st November.

Finally, we’d very much like to thank our sponsors: Principal Sponsor Sardar Group, Gold Sponsor: Hydro-C, Silver Sponsor: Serco and Reception Sponsor: Basra Gateway Terminal

(Source: IBBC)

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Iraq Finalises September Oil Exports

By John Lee.

Iraq’s Ministry of Oil has announced finalised oil exports for September of 92,422,485 barrels, giving an average for the month of 3.081 million barrels per day (bpd), up slightly from the 3.054 million bpd exported in August.

The exports from the oilfields in central and southern Iraq amounted to approximately 89,224,354 barrels, while exports from Kirkuk amounted to 2,922,857 barrels. Exports to Jordan by truck totaled 275,274 barrels.

Revenues for the month were $6.777 billion at an average price of $73.328 per barrel.

August’s export figures can be found here.

(Source: Ministry of Oil)

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Iraq to Invest in Greener Technology

By John Lee.

Iraq reportedly plans to invest $3 billion annually to transition from burning liquids to burning natural gas in its power plants.

Deputy Prime Minister and Finance Minister, Ali Allawi (pictured), told the Middle East Green Initiative Forum in Saudi Arabia that Iraq will also end gas flaring by 2025.

He also recommitted Iraq to working towards a greener future.

More here.

(Sources: The National, Arab News)

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Petrofac expects “Significant Upside Potential” on return to Iraq

By John Lee.

Oil services company Petrofac has said it is “anticipating significant upside potential upon return to markets in Saudi Arabia, Iraq and the UAE“.

In 2019, customers in Iraq and Saudi Arabia suspended Petrofac from bidding on new contracts, while allowing it to execute pre-existing contracts, followed by a UAE customer in 2020. This resulted from investigations into corruption involving the company.

Earlier this month, Petrofac was ordered to pay GBP 77 million [$105 million] after the UK’s Serious Fraud Office (SFO) secured further convictions in its investigation into bribery and corruption.

The company today raised £199.6 million in the bond markets, part of which will be used to pay the fine.

Iraq, Saudi Arabia and the UAE accounted for 27 percent of total revenue in the period 2015-2019, prior to the first suspension, and revenue from these countries decreased to 12 percent in 2020.

(Source: Petrofac)

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