Category: Oil News

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Genel Energy Updates on Oil Reserves

Genel Energy has issued an update on oil reserves and resources across its portfolio.

Bill Higgs (pictured), Chief Executive of Genel, said:

“The quality of our reserves is the foundation of our resilient business model, providing us with low-cost production that can generate cash for many years to come.

“Drilling at Sarta this year has the potential to add to our reserves, with Qara Dagh adding the possibility of opening up another field in the Kurdistan Region of Iraq, as we look to further build our cash generative portfolio for the benefit of all stakeholders.“

Net oil reserves (MMbbls) 1P 2P 3P
31 December 2019 68.8 123.8 194.9
Production (11.7) (11.7) (11.7)
Technical revisions 12.2 5.0 (6.0)
31 December 2020 69.4 117.2 177.2

International petroleum consultants DeGolyer and MacNaughton assess that, at the Tawke field on the Tawke licence (Genel 25% working interest), gross year-end 2020 1P reserves stood at 173 MMbbls, compared to 176 MMbbls at year-end 2019, after adjusting for production of 21 MMbbls and an upward technical revision of 18 MMbbls. Tawke field 2P reserves stood at 245 MMbbls (261 MMbbls at end-2019) and 3P reserves at 359 MMbbls (376 MMbbls at end-2019).

The Enhanced Oil Recovery project at the Tawke field has started to deliver a positive impact on production. Pending further work on the project, the 23 MMbbls of 2P and 45 MMbbls of 3P gross reserves that DeGolyer and MacNaughton previously included in their figures continues to be maintained by Genel in 2C and 3C resources.

At Peshkabir, also on the Tawke licence (Genel 25% working interest), year-end 2020 gross 1P reserves were assessed at 61 MMbbls (51 MMbbls at end-2019), 2P reserves at 116 MMbbls (125 MMbbls at end-2019) and 3P reserves at 201 MMbbls (220 MMbbls at end-2019). The upward revision of 1P and 2P reserves by 29 MMbbls more than offsets production of 19 MMbbls, and is the result of continued outstanding field performance in 2020.

At Taq Taq (44% working interest, joint operator), 1P gross reserves stood at 18 MMbbls at year-end 2020 (20 MMbbls at end-2019), following a minor technical upward revision of 1 MMbbls and production of 4 MMbbls. Gross 2P reserves stood at 33 MMbbls (44 MMbbls at end-2019), with a downward revision of 8 MMbbls following a reduction to the number of wells planned for the future, and their associated expected productivity. McDaniel & Associates carried out the independent assessment of the Taq Taq licence.

Genel’s gross 2P reserve estimate relating to Phase 1A of the Sarta development remains unchanged at year-end 2020, standing at 34 MMbbls.

CONVERTING RESOURCES TO RESERVES

Net oil resources (MMbbls) 1C 2C 3C
31 December 2019 66.5 152.0 345.8
Technical revisions (8.6) (8.6) (8.0)
31 December 2020 57.9 143.4 337.8

There has been no change to the ERCE view on Sarta (30% working interest), with an estimated mid-case total recoverable oil resource of 593 MMbbls, of which 258 MMbbls are classified as 2C resource. Production performance in 2021, and the results of the upcoming three well campaign in 2021, will inform the quantity of conversion of these resources into reserves.

At Qara Dagh (40% working interest, operator) the QD-2 well will test the crestal portion of the prospect, which has a mean prospective resource estimated by Genel at c.400 MMbbls. Genel continues to estimate that the downdip segment tested by the QD-1 well defines a 2C resource of 47 MMbbls.

(Source: Genel Energy)

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GKP issues Update on Shaikan Field

Gulf Keystone Petroleum (GKP) has provided a Competent Person’s Report (“CPR”) update on the Shaikan Field in which it has an 80% working interest.  

The CPR, an independent third-party evaluation of the Company’s reserves and resources as at 31 December 2020, was prepared by ERC Equipoise (“ERCE”).

Jon Harris, Gulf Keystone’s Chief Executive Officer, said:

“The updated CPR demonstrates the continuing long-term strong performance of the Shaikan Field with gross 2P+2C reserves and resources volumes in line with the 2016 CPR, after adjusting for production over the period.   

“Prior Company estimates are reaffirmed with gross 2P+2C reserves and resources of c.800 MMstb at 31 December 2020, including over 500 MMstb of gross 2P reserves.  

“We have a deep understanding of the Shaikan Field that has produced over 80 MMstb to date and are pleased that the latest CPR matches our interpretation and understanding of the geological model, underlining the considerable untapped potential of the field.”

“We had a strong start to the year in January, which saw GKP’s highest monthly average daily gross production of 44,405 bopd.  As conditions continue to improve, we look forward to resuming the 55,000 bopd expansion project and shareholder distributions.”  

Highlights

  • The CPR incorporates significant incremental information, including an updated development plan, new wells, production data and further technical analysis, since the last CPR was prepared by ERCE in 2016.
  • Gross 2P reserves + 2C contingent resources1 of 798 MMstb2 at 31 December 2020 are consistent with volumes as at 31 December 2019, adjusted principally for 2020 production.
  • Gross 1P reserves increased to 240 MMstb, up 33% after adjusting for 2020 production.
  • Gross 2P Jurassic reserves were revised down marginally (2%) to 505 MMstb, after adjusting for 2020 production. 
  • Gross 2P Triassic and Cretaceous reserves of 47 MMstb were reclassified to gross 2C contingent resources1, while the Field Development Plan is progressed with the Ministry of Natural Resources.
  • Shaikan continues to deliver stable production with average gross production in January of 44,405 bopd, the highest monthly average to date from the field.
  • The Shaikan Field has significant future production potential with a gross 1P reserves life index3 of c.15 years and a gross 2P reserves life index3 of over 31 years, assuming January 2021 production levels.

Gross reserves and resources based on the Company’s estimates at 31 December 2019 and the CPR at 31 December 2020 were:

31 December 2020

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

  Reserves

Resources

Jurassic

240

505

80

585

Triassic

–

–

157

157

Cretaceous

–

–

56

56

Total – Gross

240

505

293

798

31 December 2019

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

  Reserves

Resources

Jurassic

  175

  531

  80

  611

Triassic

  18

  44

  106

  150

Cretaceous

  1

  3

  53

  56

Total – Gross

  194

  578

  239

  817

The reconciliation of changes in reserves and resources between the Company’s estimates at 31 December 2019 and the CPR at 31 Decemer 2020 is as follows:

 

 

1P

2P

2C 1

2P+2C 2

Gross (MMstb)

  Reserves

Resources

31 December 2019

  194

  578

  239

  817

Production

(13)

(13)

  – 

(13)

Reclassifications

(19)

(47)

  +47

  – 

Revisions

  +78

(13)

  +7

(6)

31 December 2020

  240

  505

  293

  798

GKP’s 80% net WI4 share of reserves and resources at 31 December 2020 were: 

1P

2P

2C 1

2P+2C 2

Formation (80% WI) (MMstb)

  Reserves

Resources

Jurassic

  192

  404

  64

  468

Triassic

  – 

  – 

  125

  125

Cretaceous

  – 

  – 

  45

  45

Total – Net WI

192

404

  234

638

1.  Contingent resources volumes are classified as such because there is technical and commercial risk involved with their extraction. In particular, there may be a chance that accumulations containing contingent resources will not achieve commercial maturity. The 2C (best estimate) contingent resources presented are not risked for chance of development.

2.  Aggregated 2P+2C estimates should be used with caution as 2C contingent resources are commercially less mature than the 2P reserves.

3.  Reserves life index is calculated as gross 1P reserves or gross 2P reserves, as appropriate, divided by annualised January 2021 gross production.

4.  Net working interest reserves and resources do not represent the net entitlement resources under the terms of the PSC.

 (Source: GKP)

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DNO Adds New Oil Reserves

DNO ASA, the Norwegian oil and gas operator, has announced it replaced 87 percent of 2020 production through additions to its proven (1P) reserves notwithstanding reduced activity in the wake of low oil prices.

In the Kurdistan region of Iraq, the Company replaced 111 percent of last year’s production through additions to 1P reserves.

Yearend 2020 Company Working Interest (CWI) 1P reserves totaled 201 million barrels of oil equivalent (MMboe) compared to 206 MMboe at yearend 2019, after adjusting for 35 MMboe of production and 30 MMboe of upward technical revisions.

DNO exited the year with 332 MMboe of CWI proven and probable (2P) reserves and 507 MMboe of CWI proven, probable and possible (3P) reserves. DNO’s CWI contingent (2C) resources stood at 152 MMboe.

At yearend 2020, DNO’s 1P reserves life stood at 5.8 years, its 2P reserves life at 9.6 years and its 3P reserves life at 14.6 years; all were up slightly from 2019 levels.

On a gross basis, yearend 1P reserves at the Tawke license in Kurdistan containing the Tawke and Peshkabir fields climbed to 234 million barrels of oil (MMbbls) from 228 MMbbls a year earlier. Tawke license 2P reserves stood at 394 MMbbls at yearend 2020 (400 MMbbls in 2019) and 3P reserves at 605 MMbbls (641 MMbbls in 2019).

Across its North Sea portfolio at yearend 2020, on a CWI basis, DNO’s 1P reserves stood at 41 MMboe, 2P reserves at 64 MMboe and 3P reserves at 96 MMboe. The Company’s North Sea 2C resources totaled 120 MMboe.

At yearend 2020 and on a gross basis, at the Baeshiqa license in Kurdistan containing two large structures with multiple independent stacked target reservoirs, 2C resources stood at 43 MMbbls, following successful drilling and testing of the exploration Baeshiqa-2 and Zartik-1 wells. No reserves were recorded at the Baeshiqa license at yearend 2020 pending conclusion of the ongoing appraisal activities to determine commerciality.

“All things considered, from a reserves replacement perspective DNO had a stellar year in 2020 notwithstanding the sharp cuts in our spend and the challenges of keeping operations going in the face of Covid restrictions in movement of our people, contractors and supplies,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman.

International petroleum consultants DeGolyer and MacNaughton (D&M) carried out an independent assessment of the Tawke and Baeshiqa licenses in Kurdistan. Gaffney, Cline & Associates (GCA) carried out an independent assessment of DNO’s licenses in Norway and the United Kingdom.

(Source: DNO)

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Iraq plans 20GW Solar Power by 2030

By John Lee.

Iraq’s Minister of Oil has his Ministry’s goal is to support the Ministry of Electricity to have 20 gigawatts of solar energy capacity installed by 2030.

In a promotional video issued by the Government of Iraq, Ihsan Abdul Jabbar added that the recently-announced partnership with French energy company Total will include the production of clean solar energy in Southern Iraq.

He said the Ministry was in discussion with other oil producers, including BP, to use their sites to produce solar power.

(Source: Govt of Iraq)

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Iraq receives First Batch of Turkish Rail Tankers

By John Lee.

Iraq has reportedly taken delivery of its first batch of rail tankers from Turkey.

According to Daily Sabah, the first 50 units, manufactured by Cryocan, were sent by truck, with a further 400 units still to be made.

The tankers will be used by Iraq Republic Railways (IRR) to transport oil and fuel.

More here.

(Source: Daily Sabah)

(Stock image via Pixabay)

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Video: Where has Iraq’s Oil Wealth gone?

From Al Jazeera. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Decades of plundering: Where has Iraq’s oil wealth gone?

Ranked as the fourth-biggest oil producer in the world, many would assume that Iraq has the financial resources to weather the pandemic.

But that is not the case – its fragile economy is struggling to cope and it may turn to the International Monetary Fund for assistance.

It has already devalued its currency by almost a fifth, enabling it to eke out more dinars for dollars. Ahmed Tabaqchali, the chief investment officer of AFC Iraq Fund, helps explain where all of Iraq’s money goes:

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DNO Buys Exxon’s Stake in Iraqi Oilfield

DNO ASA, the Norwegian oil and gas operator, has announced the acquisition of ExxonMobil‘s 32 percent interest in the Baeshiqa license in the Kurdistan region of Iraq, doubling DNO’s operated stake to 64 percent (80 percent paying interest), pending government approval.

The Company plans to continue an exploration and appraisal program on the license while fast tracking early production from existing wells in 2021.

DNO has already demonstrated proof of concept of producing through temporary test facilities, having delivered 15,000 barrels of 40o API oil and 22o API oil for export from the Baeshiqa-2 and Zartik-1 wells, respectively.

In November 2019 DNO issued a notice of discovery on the Baeshiqa license after flowing hydrocarbons from several Jurassic and Triassic zones to surface in the 3,204 meters (2,549 meters TVDSS) Baeshiqa-2 exploration well. Following acid stimulation, the zone flowed variable rates of light oil and sour gas.

Two zones flowed naturally at rates averaging over 3,000 barrels of oil per day (bopd) of light gravity oil each and another averaged over 1,000 bopd also of light gravity oil. Subsequent analyses on surface samples collected during testing confirm that the Triassic reservoirs contain saturated oil with a gas cap.

An exploration well was completed in 2020 on a second structure (Zartik) some 15 kilometers southeast of the Baeshiqa-2 discovery well. The 3,021 meters (2,322 meters TVDSS) well tested hydrocarbons to surface from several Jurassic zones, with the uppermost zone flowing naturally at rates averaging over 2,000 bopd of medium gravity oil.

The Company currently estimates gross license contingent recoverable resources from three of the tested zones in the two wells ranging from 12 million barrels of oil (mmbbls) (1C) to 156 mmbbls (3C), with a 2C volume of 43 mmbbls.

“By increasing our stake in the Baeshiqa license now, we demonstrate our belief in its ultimate potential,” said Bijan Mossavar-Rahmani (pictured), DNO’s Executive Chairman. “Following the stabilization of oil prices and export payments in Kurdistan, DNO is stepping up spending on new opportunities,” he added.

DNO acquired its first 32 percent interest from ExxonMobil and assumed operatorship of the Baeshiqa license in 2018.

The 324 square kilometer license is situated 60 kilometers west of Erbil and 20 kilometers east of Mosul. The license contains two large structures, Baeshiqa and Zartik, which have multiple independent stacked target reservoir systems, including in the Cretaceous, Jurassic and Triassic. The remaining partners in the license include TEC [Turkish Energy Company] with a 20 percent paying (16 percent net) interest and the Kurdistan Regional Government with a 20 percent carried interest.

In addition to the Baeshiqa license, DNO also operates the Tawke license containing the Tawke and Peshkabir fields in Kurdistan. Gross operated production from the Tawke license averaged 110,300 bopd in 2020.

(Source: DNO)

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Dana Gas to Increase Drilling in Iraqi Kurdistan

Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, today announced its Preliminary Unaudited Financial Results for the full year ended 31 December 2020.

The Company reported a Net Profit of $36 million (AED 131mm) versus $88 million (AED 322mm) in 2019, excluding one-off non-cash impairments and other income. Including these one-offs, the Company reported a Net Loss of $376 million (AED 1.4bn) versus a Net Profit of $157 million (AED 575mm).

A total of $412 million (AED 1,51bn) of impairments were incurred mostly related to the sale of Dana Gas Egypt onshore assets.

Dana Gas’s continued operations (Kurdistan Region of Iraq) contributed an annual net profit of $32 million reflecting the profitability of the remaining business despite the challenging year caused by the COVID-19 pandemic.

Revenue was $349 million (AED 1.27bn) in 2020 compared to $459 million (AED 1.68bn) in 2019 due to both lower realised prices and lower production in Egypt.

The Company’s robust, long-standing programme to control operating expenses helped to effectively navigate the challenging market environment in 2020. G&A costs were reduced by a further 20% year-on-year.

Dana Gas fully redeemed its outstanding Sukuk on schedule in October 2020. The Company closed the year on a strong financial footing, and maintains a positive financial outlook for 2021.

Dr Patrick Allman-Ward (pictured), CEO of Dana Gas, commented:

“The world experienced unprecedented shocks in 2020 with the COVID pandemic and its impact on the global petroleum markets with prices collapsing to levels not seen for over 20 years. Nevertheless, Dana Gas has shown real resilience both from an operational as well as financial perspective.

“When the pandemic struck, our first priority was the health and safety of our staff. However, we managed to keep our operations on-stream by implementing the most stringent health and safety measures. We not only managed to keep production levels up, but we also carried out a de-bottlenecking project on our Khor Mor plant in July which added a total of 50 MMscf/d of production capacity. In December we consistently obtained record production levels of over 440 MMscf/d. This extraordinary operational performance under the most testing of circumstances is testament to the commitment, dedication and hard work of our staff who have been outstanding in this challenging time.

“Despite the challenges imposed by the global pandemic, we exited the year in a robust financial position with a strong balance sheet, having agreed upon the sale of our Egypt onshore assets, redeeming our outstanding Sukuk and entering into a new credit facility at a lower interest rate.

“In 2021, we aim to advance the development of our world class assets in the KRI, where over 90% of Dana Gas’s proven reserves of over 1 billion boe are located, while concurrently moving ahead with our plans to prepare for the drilling of the next exploration well in Block 6 in Egypt, which holds exciting, material upside potential.“

Operations & Production

Average group production declined 5% during 2020, averaging 63,200 boepd versus 66,200 boepd in 2019. Production was boosted by a 2% jump in output from the KRI, which reached 32,250 boepd. This helped to offset a drop in production from Egypt, which fell 8% to 30,300 boepd versus 33,000 boepd in 2019 as a result of natural field declines.

Fourth quarter 2020 average group production was up 2% to 63,600 boepd. The KRI added 9% to reach 33,250 boepd in fourth quarter production because of the successful completion of the plant bypass project.

The KRI and Egypt operations have continued without interruption and remain fully functioning, un-impacted by the Covid pandemic. The restarting of the expansion plans in the KRI demonstrates that all the parties working on the project are fully committed to executing the expansion project as quickly and as safely as possible. The Pearl consortium remains focused on completing the first 250 MMscf/d gas processing train in Q1 2023 and is also examining ways to bring forward the current schedule.

In 2021 the Company will prepare for the drilling of up to five development wells in the KRI which will begin the following year. It is also moving ahead on the evaluation of the highly prospective Block 6 in Egypt, interpreting the infill seismic data that was acquired in mid-2020 and planning for drilling the next exploration well in 2023.

Sale of Egypt assets

In October 2020 Dana Gas entered into a binding agreement with IPR Wastani Petroleum Ltd, for the sale of its onshore Egyptian producing oil and gas assets for a cash consideration of up to $236 million including contingent payments. The sale is on track for completion in H1 2021. The Company will retain its interests in its exciting offshore exploration concession, North El Arish (Block 6) which contains material gas resource potential in excess of 20 Tcf.

Liquidity and Collections

The Group’s cash balance at year-end stood at $108 million. The Board is considering transferring voluntary reserves into retained earnings to support dividend capacity subject to shareholder approval.

The Group collected a total of $182 million in 2020 (2019: $285mm) with Egypt and KRI contributing $80 million (2019: $138mm) and $102 million (2019: $139mm) respectively.
As of 31 December 2020, the Company’s Egypt receivables stood at $130 million (AED 477mm).

In the KRI, regular payments have been received since March 2020. The KRG maintained its commitment to pay its invoices on time despite facing fiscal challenges throughout the year. Currently, $39 million is outstanding (DG 35% share). The Company has received notification from the KRG on the mechanism for settlement of the outstanding receivables.

(Source: Dana Gas)

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DNO announces 2020 Interim Results

DNO ASA, the Norwegian oil and gas operator, today reported interim 2020 revenues of USD 615 million, down a third from a year earlier in the wake of weak oil prices triggered by the pandemic and global economic contraction.

Net production totaled 95,100 barrels of oil equivalent per day (boepd), down nine percent, as the Company cut spending to preserve cash.

For the full year, DNO reported a net loss of USD 286 million driven by the lower revenues and pre-tax asset impairments of USD 276 million, most of which were reported in the third quarter.

With solid cash flow from operations of USD 236 million and North Sea tax refunds of another USD 236 million, DNO exited 2020 with a cash balance of USD 477 million, essentially unchanged from the start of the year, following repayment of USD 161 million in bond debt.

The Company drilled six exploration wells last year leading to three likely commercial discoveries, including Røver Nord and Bergknapp in Norway and Zartik in Kurdistan’s Baeshiqa license. The discoveries will be considered for fast-track development and tie-in to existing offshore or onshore infrastructure.

DNO will drill two potentially high impact exploration wells this year, notably the much anticipated Edinburgh prospect that straddles the Norway-United Kingdom border in which the Company holds a 45 percent stake and the Gomez prospect offshore Norway in which the Company holds an 85 percent stake.

The total 2021 well count, including development wells, will increase to 27 from 17 last year.

Temporary Norwegian petroleum tax incentives are driving other stepped-up investments. The Company is proceeding to concept selection for the operated Brasse field, accelerating infill drilling at Ula, Tambar and Brage fields in 2021 and evaluating the Iris/Hades, Røver Nord, Alve Gjøk, Orion/Syrah and Trym South discoveries for project sanction in 2022.

DNO projects operational spend of USD 700 million this year, up from USD 511 million in 2020.

The Company achieved a net 2P reserve replacement ratio of 64 percent in 2020, notwithstanding limited activity, ending the year with 332 million barrels of oil equivalent (mmboe) of proven and probable reserves, down 13 mmboe from yearend 2019, according to preliminary figures.

More here:

(Source: DNO)

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