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Weir to Deliver OPITO-Accredited Quals in Iraq

Weir Oil and Gas Approved to Deliver OPITO – Accredited Qualifications in Iraq

Weir Oil & Gas has successfully achieved accreditation from OPITO, the global skills organization for the energy industry, to provide occupational training qualifications from the Weir Oil & Gas Centre of Manufacturing and Engineering Excellence in Southern Iraq.

Weir Oil & Gas is the first training provider in Iraq to receive approval to deliver OPITO-accredited SCQF Level 4 and 5 occupational training qualifications in Basic Maintenance Practices and Maintenance Practices for Instrument, Control, and Mechanical Operations. The local delivery of these training programs will help ensure the availability of an in-country, technically skilled, knowledgeable and safety-conscious workforce.

Over the past three years, Weir Oil & Gas has delivered more than 15,000 combined internal and external training hours, mostly to Iraqi personnel, encompassing classroom-based learning and on-the-job training.

With a constant presence in Iraq since 2014, Weir Oil & Gas has increased its local content through skills development and the structured training of local nationals, focusing on oil and gas services professionals.

The collaboration with OPITO aligns with Weir Oil & Gas’ vision to become a leading provider of oil and gas industry training and skills development in the Middle East, through enhancing the delivery of training to local nationals, and supporting skills development projects in Iraq and Oman for a portfolio of companies that includes major global oil companies.

Ronan Le Gloahec, President of Weir Oil & Gas Eastern Hemisphere, said, “Our partnership with OPITO will allow us to provide unparalleled local content and training for oil and gas personnel in Iraq, creating a solid and necessary foundation for companies operating in the region to flourish.”

Richard Roberts, Regional Vice-President, MEA of OPITO, said, “Iraq’s success as an oil and gas producer will, in part, be reliant on its ability to build a strong local talent pool through ensuring the availability of vocational technical skills in-country that are commensurate with international benchmarks. Our collaboration with Weir Oil & Gas is an important step forward in ensuring the delivery of accredited training programs in Iraq and the Middle East and will help safeguard the continued development of a competent energy sector workforce.”

(Source: Weir)

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GKP Shares Rally following Update

By John Lee.

Shares in Gulf Keystone Petroleum, have rallied more than 20 percent after the company issued an operational and corporate update on Tuesday:

Jón Ferrier, Gulf Keystone’s Chief Executive Officer, said:

“We have made significant operational strides in recent months, ensuring we remain on-track to achieve our revised targets for the year. I am pleased to update stakeholders on further success in executing the previously reported, low-cost, high-impact investments that have so far increased gross production to 42,000 bopd, in excess of the initially targeted increase of 5,000 bopd.

“The Shaikan Field recently achieved an important milestone of cumulative production of 80 million stock tank barrels. This is a clear testament to not only the quality of the asset, from which there remains significant untapped potential, but also the professionalism and dedication of the team. We look forward to updating the market on further progress early in 2021.“

Operational

  • Following on from the successful work over of the SH-12 well, the Company has progressed the previously announced low-cost, high-impact investments to further increase field production.
  • The SH-9 well, on which activity was suspended in March 2020 due to COVID-19, has now been successfully tied-in to PF-1 and is on production. PF-1 is now operating at its current maximum processing capacity of c.27,500 bopd. Debottlenecking activities at PF-1 remain on-track to further increase production capacity to over 30,000 bopd during Q1 2021.
  • Gross Shaikan production is currently at c.42,000 bopd, c.20% above the November 2020 average rate.
  • Average gross production for the year is expected to be at, or slightly above, 36,000 bopd, the top end of the guidance range.

Financial

  • The Company remains on track to achieve targeted G&A and Opex savings of at least 20% compared to 2019 and 30% on a run-rate basis.
  • Net capex for 2020 is expected to be at or slightly exceed the top end of the guidance range of $48 million, following the $3 million investment in high-impact projects.
  • The Kurdistan Regional Government (“KRG”) has maintained regular payments for eight months, including the recent October receipt.
  • The Company has extended its hedging programme, establishing a H1 2021 floor price of $35/bbl on c.60% of production, based on current production levels.
  • As at 14 December 2020, the Company had a cash balance of $142 million.

Outlook

  • With completion of the debottlenecking of PF-1, GKP is expected to deliver a further increase in production in Q1 2021.
  • In line with the KRG’s commitment to review the outstanding November 2019 to February 2020 invoices totalling $73.3m (net) when oil prices reached $50/bbl, we are pleased to confirm receipt of a proposal to repay the arrears. We look forward to further engaging with the KRG on this matter and will provide an update in due course.
  • GKP is well positioned to restart its drilling programme to achieve 55,000 bopd when circumstances permit.
  • The Company remains committed to maintaining its strong financial position and aims to return to a balance of production growth and shareholder distributions, as conditions continue to improve.
  • The search process to identify a successor for CEO, Jón Ferrier, is ongoing.

AGM Update

In accordance with the 2018 UK Corporate Governance Code, the Company can confirm that following the Annual General Meeting held on 19 June 2020, where three of the proposed Resolutions did not attain the support of 80% of the votes, members of the Board and executive management team have consulted with several of the Company’s large shareholders. Mr Garrett Soden has been reappointed to the Board of GKP as a Non-Independent Non-Executive Director representing funds managed by Lansdowne Partners Austria, GKP’s largest shareholder. The Company continues to actively engage with its shareholders.

(Source: GKP)

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GE Synchronizes Gas Turbines at Zubair Power Plant

By John Lee.

GE Gas Power has said it has “marked a major milestone” by synchronizing two GT13E2 gas turbines to the national grid at the Zubair Permanent Power Generation Plant.

The facility is owned by the Basra Oil Company (BOC) and located at the Zubair oil field, about 20 kilometers from the city of Basra.

ENI Iraq B.V. is responsible for developing the oil field and had awarded a contract to GE for the engineering, procurement, installation and commissioning of the power plant.

Two other GT13E2 units at the site had previously been synchronized to the grid in summer 2020. The new additions have taken the total generation capacity of the site up to 700 megawatts (MW).

Joseph Anis, President & CEO of GE Gas Power in the Middle East, North Africa and South Asia, said:

“With Iraq’s population growing at over 2 percent per year, the demand for reliable, affordable electricity continues to increase. Every megawatt added to the grid can make a significant impact to the quality of life of the Iraqi people. 

“GE is honored to work together with ENI to support the country’s socioeconomic development by delivering much-needed electricity to power growth and prosperity for present and future generations.“

(Source: GE)

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Jordan Finds Gas Field near Iraqi Border

By John Lee.

Jordan has found new reserves of natural gas at its Risha field, close to its border with Iraq.

Hala Zawati, the Jordanian Energy Minister, said:

“… drilling operations at Well 53 in the Risha field have shown promising results, while exploration and drilling operations continue at wells 50, 51 and 52.”

(Source: Jordanian Ministry of Energy and Mineral Resources)

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KRG to Resume Override Payments to Genel

By John Lee.

Genel Energy has received notice from the Kurdistan Regional Government (‘KRG’) that override payments, whereby Genel receives 4.5% of monthly Tawke gross field revenues, will resume with the January 2021 invoice, to be paid in February 2021. Assuming the prevailing oil price, this translates into over $5 million of additional cash proceeds on a monthly basis.

This is consistent with the communication received from the KRG as announced on 17 April, which stated that the override payments would be suspended for at least nine months, and also that in a scenario where the oil price recovers to c.$50/bbl, a review of the situation would take place immediately in respect of the outstanding receivable.

In line with this communication, the KRG has now also submitted a reconciliation model for repayment of the receivable relating to amounts owed for invoices for oil sales from November 2019 to February 2020 and the suspended override from March to December 2020. We will work through this submission and update the market when appropriate, as further discussions with the KRG take place.

(Source: Genel Energy)

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China “Set to Bail Out Iraq” with Oil Deal

By John Lee.

Iraq is reportedly poised to sign a multibillion-dollar contract with China’s ZhenHua Oil, in what Bloomberg describes as a bailout from Beijing.

Under the deal, Iraq’s cash-strapped government which will receive money upfront in exchange for long-term oil supplies.

Click here to read the full article.

(Source: Bloomberg)

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Oryx Petroleum Changes Name, Plans $51m Capex

By John Lee.

Oryx Petroleum Corporation has announced that it has changed its name to Forza Petroleum Limited.

2021 Budgeted Capital Expenditures

Budgeted capital expenditures for 2021 are $51 million and dedicated exclusively to the Hawler license area.

The planned work program involves drilling five new wells into proven, producing reservoirs and reservoirs still being appraised in the Demir Dagh, Zey Gawra and Banan fields, completing a previously drilled well in the Ain al Safra field for further evaluation, and installing a gathering system to eliminate trucking in the western part of the Hawler license area to reduce environmental impact and operating expense.

Completion of the full budgeted program is dependent on available funding from one or a combination of increased revenue from oil sales resulting from higher than forecast Brent crude oil prices or production, settlement of past due receivables by the Ministry of Natural Resources of the Kurdistan Region of Iraq in respect of oil sales made between November 2019 and February 2020, and additional funding from third parties.

The Corporation is in discussions with its controlling shareholder regarding financing arrangements to fund budgeted capital expenditure to the extent internal capital is not available.

Operations Update

  • Average gross (100%) oil production of 11,100 bbl/d (participating interest 7,200 bbl/d) for November 2020
  • During November, leased artificial lift equipment used to produce the Banan-4 and Banan-3 wells was demobilized and replaced by a purchased pump in the Banan-4 well, reducing future operating expenditure related to producing the Banan field
  • The previously announced new well targeting the Tertiary reservoir in the Zey Gawra field is not expected to spud before January 2021 as the drilling rig intended for the project continues to be in use by another operator in the region and has not yet been released

CEO’s Comment

Commenting today, Forza Petroleum’s Chief Executive Officer, Vance Querio (pictured), stated:

“We are very encouraged by the rebounding crude oil market and plan to maintain an active program of drilling during 2021 to continue the progressive development of the Hawler license area in the Kurdistan Region of Iraq. We intend to increase our offtake rates from some of our proven, producing reservoirs and to continue evaluating the potential of other accumulations in the area that have not previously been produced.

“During a difficult year related to the global pandemic and other headwinds across the oil and gas industry, we have remained committed to maintaining safe operations and decreasing operating costs where possible. The installation of a gathering system to serve the western flank of the Hawler license area will support both of these objectives by dramatically reducing the potential of environmental impact and the relatively high cost of tanker transport operations in the area.

“We look forward to an improving operating environment in 2021 and to continuing our successful efforts to develop the resources of the Hawler area for the benefit of Forza Petroleum, the Kurdistan Regional Government, the employees of OP Hawler Kurdistan Limited and the citizens of the communities in which we operate.”

(Source: Oryx)

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Gazprom Neft developing Fourth Well at Sarqala

By John Lee.

Russia’s Gazprom Neft has produced its four-millionth tonne (32-millionth barrel) of oil since starting commercial development of the Sarqala field in the Kurdistan Region of Iraq (KRI).

Three wells are now in operation at this field, with daily production running at about 3,100 tonnes (24,000 barrels) per day.

Limitations arising under the COVID-19 pandemic notwithstanding, Gazprom Neft Middle East B.V. is continuing to develop this field and is implementing a number of key production projects, including drilling a fourth well, the commissioning of which will increase production to 4,100 (around 32,000 barrels) per day. The commissioning of this well is scheduled for the first half of 2021.

Gazprom Neft Middle East B.V. is involved in this project with the Government of the KRI as part of the latter’s development of the region’s energy supply system. Associated petroleum gas (APG) produced at the Sarqala field will be used as fuel for energy facilities currently under development by government authorities.

This programme envisages the construction of a 4.5-kilometre gas pipeline to connect the field to power generation facilities. Implementing this project will not only increase APG utilisation at the field, but will also facilitate energy supplies to several districts within the KRI.

(Source: Gazprom Neft)

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Saudi-Iraqi Business Forum Launched; New Projects Announced

By John Lee.

Prime Minister Mustafa Al-Kadhimi received a delegation of Saudi officials and business people in Baghdad on Monday.

Among the visitors was the Saudi Minister of Commerce, Acting Minister of Media, and Chairman of the Saudi-Iraqi Coordination Council, Dr. Majid bin Abdullah Al-Qasabi.

The delegation included businessmen representing 22 Saudi companies.

During the meeting, they discussed issues of common interest between the two countries, and ways to support and enhance them in all fields.

The two sides also signed an agreement to establish a metal silo to store wheat in Al-Diwaniya province, and a hospital in Al-Saqlawiya, Anbar province.

(Source: SPA)

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