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Kuwait Energy signs Block 9 Farm-out Agreement

Kuwait Energy Signs Block 9, Iraq Farm-out Agreement with Dragon Oil

Kuwait Energy (KEC) has announced the signing of the Block 9, Iraq Farm-out Agreement with Dragon Oil (a wholly-owned subsidiary of Emirates National Oil Company Ltd, the national oil company of Dubai).

As per the Farm-out Agreement, Kuwait Energy will assign a 15% participating interest in the Block 9, Iraq service contract comprised of 8.57% participating interest in Block 9, Iraq to Dragon Oil in consideration for US$100 million in cash; and 6.43% participating interest in Block 9, Iraq to Dragon Oil in settlement of a dispute with Dragon Oil in relation to a non-controlling interest in Block 9, Iraq.

The agreement was signed on 11 February 2018 by Ali Rashid al Jarwan, Dragon Oil Chief Executive Officer (CEO); and Abby Badwi, the CEO of Kuwait Energy.

Abby Badawi (pictured), Chief Executive Officer of Kuwait Energy, said:

“This is a great moment for Kuwait Energy and Dragon Oil. The extension of our Block 9 partnership with Dragon Oil has meant that both Companies can work as equal equity partners on the concession allowing us to best utilise our joint technical expertise in delivering the submission of the Block 9 full field development plan to the Iraqi government.

“The reduction in future Block 9 capital expenditure exposure coupled with the material cash injection strengthens Kuwait Energy liquidity position going forward.“

The assignment of the 15% participating interest in Block 9, Iraq from Kuwait Energy to Dragon Oil remains subject to Iraqi government and partner approval. Post granting of these approvals, Kuwait Energy will remain the operator with a reduction in participating interest from 60% to 45%,

Dragon Oil participating interest will increase from 30% to 45% with the remaining 10% participating interest being held by Egyptian General Petroleum Company.

(Source: Kuwait Energy)

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Investments in Health can contribute to Peace Dividends

In the lead-up to the Kuwait International Conference for Reconstruction of Iraq, the World Health Organization (WHO) calls on the international community to further invest in Iraq’s devastated health sector.

In Anbar, Ninewa, Salah Al Din, and Kirkuk, 14 hospitals and more than 170 health facilities were damaged or destroyed in the three-year conflict. Water and power systems that health facilities depend on to function also need urgent repair.

Beyond physical damage, the crisis caused unimaginable mental distress for millions of people, left tens of thousands of Iraqis with severe physical injuries, disrupted the routine vaccination of millions of children, decreased reproductive health services to girls and women of child-bearing age, halted the supply of essential medicines and medical equipment, and interrupted the medical education for hundreds of thousands of aspiring medical workers.

“More than 2.4 million Iraqis are still displaced and need direct health care, and more than 3.3 million Iraqis who have returned home have gone back to areas where the health system needs to be almost entirely rebuilt,” said Altaf Musani, WHO Representative in Iraq. “Across the country, millions of Iraqis are in the process of rebuilding their shattered lives and WHO is keen on supporting the governmental health authorities to provide them with appropriate and dignified health care services.”

WHO has worked with health partners to support the Government of Iraq in providing emergency health services and strengthening the health care system to ensure vulnerable persons have access to quality health care. In 2017, partners including various departments of health provided over 6 million medical consultations across Iraq.

This was made possible by establishing and supporting at least 29 static health clinics in displacement camps and outreach through more than 64 mobile medical clinics. Notably, life-saving emergency health services were provided to more than 24,000 people through five field hospitals close to the front-lines in Mosul, Hawija and Al-Qaim.

To protect current humanitarian gains as well as reduce vulnerabilities, further investments in health are urgently needed. Support to rebuild health systems, provision of life saving medicines and upgrading medical technologies will ensure a responsive health care system.

WHO and health partners are appealing for firm commitments to Iraq’s health care system which will enable peaceful, dignified and safe returns as well as revitalization of new accessible areas.

(Source: UNAMI)

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Iraq signs Deal for Kirkuk Refinery

By John Lee.

Iraq’s Oil Ministry has announced that it has signed an agreement to build a 70,000-bpd oil refinery near Kirkuk.

The statement said the refinery would be built by “Rania international company“, which Reuters refers to as Ranya International, which it says is based in Iraqi Kurdistan.

The plant will produce high octane gasoline and other petroleum products.

(Source: Ministry of Oil, Reuters)

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Crescent Petroleum to Increase Investment in Iraqi Gas

By John Lee.

UAE-based Crescent Petroleum is reportedly planning a significant increase in its production of natural gas at its Pearl Petroleum operations in Iraq.

President Badr Jafar (pictured) is quoted as saying that there will be an investment of $1 billion to boost production to 500 million cubic feet of gas per day by 2020, up from about 330 million cubic feet  and about 20,000 barrels per day of condensates at present.

According to Reuters, Pearl is owned 35 percent by Crescent Petroleum, 35 percent by Crescent’s affiliate Dana Gas, 10 percent by Austria’s OMV, 10 percent by Germany’s RWE, and 10 percent by Hungary’s MOL.

(Sources: Gulf News, Reuters)

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DNO: Revenues and Investment Rise Sharply

DNO ASA, the Norwegian oil and gas operator, today announced a 50 percent hike in 2018 spending in the Kurdistan region of Iraq to USD 250 million net to the Company on the back of higher revenues and regular export payments.

Annual 2017 revenues stood at USD 347 million, up 72 percent from 2016, bolstered by fourth quarter revenues of USD 116 million, the highest quarterly level in more than three years.

The Company fast tracked the development of the Peshkabir field with two wells currently producing a total of 16,000 barrels of oil per day (bopd) and commingled for export with another 97,000 bopd from the other DNO-operated field, Tawke, on the same license.

DNO’s Executive Chairman Bijan Mossavar-Rahmani:

“We made the Peshkabir Cretaceous discovery early in 2017, initiated early production in June, tripled output by year’s end and already have exported two million barrels with an estimated value of USD 100 million – more than twice the investment to date. And we have only started to appraise and develop this field which continues to surprise to the upside.”

A total of six Peshkabir wells will be drilled this year with field production expected to reach 30,000 bopd by summer and continue to ramp up in the second half of the year.

At the Tawke field, plans are being finalized with partner Genel Energy plc to drill four wells in 2018, in addition to the currently drilling Tawke-48 well slated for completion by end-February.

Elsewhere in Kurdistan, DNO has re-entered and sidetracked the Hawler-1 well to appraise the Benenan heavy oil field in the Erbil license, achieving a technical milestone with the first ever multilateral well and the first ever dual completion in Kurdistan. Testing will commence shortly, and if successful, will be followed by additional wells.

The Company received 12 monthly Kurdistan export payments during 2017 totaling USD 380 million net to DNO. The landmark August 2017 receivables settlement agreement, which increased DNO’s stake in the Tawke and Peshkabir fields from 55 percent to 75 percent plus three percent of gross license revenues over five years, contributed to higher export payments.

Operational cash flow more than tripled to USD 339 million in 2017 and DNO exited the year with a net cash position of USD 30 million versus net debt of USD 139 million at end-2016.

(Source: DNO)

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DNO: Revenues and Investment Rise Sharply

DNO ASA, the Norwegian oil and gas operator, today announced a 50 percent hike in 2018 spending in the Kurdistan region of Iraq to USD 250 million net to the Company on the back of higher revenues and regular export payments.

Annual 2017 revenues stood at USD 347 million, up 72 percent from 2016, bolstered by fourth quarter revenues of USD 116 million, the highest quarterly level in more than three years.

The Company fast tracked the development of the Peshkabir field with two wells currently producing a total of 16,000 barrels of oil per day (bopd) and commingled for export with another 97,000 bopd from the other DNO-operated field, Tawke, on the same license.

DNO’s Executive Chairman Bijan Mossavar-Rahmani:

“We made the Peshkabir Cretaceous discovery early in 2017, initiated early production in June, tripled output by year’s end and already have exported two million barrels with an estimated value of USD 100 million – more than twice the investment to date. And we have only started to appraise and develop this field which continues to surprise to the upside.”

A total of six Peshkabir wells will be drilled this year with field production expected to reach 30,000 bopd by summer and continue to ramp up in the second half of the year.

At the Tawke field, plans are being finalized with partner Genel Energy plc to drill four wells in 2018, in addition to the currently drilling Tawke-48 well slated for completion by end-February.

Elsewhere in Kurdistan, DNO has re-entered and sidetracked the Hawler-1 well to appraise the Benenan heavy oil field in the Erbil license, achieving a technical milestone with the first ever multilateral well and the first ever dual completion in Kurdistan. Testing will commence shortly, and if successful, will be followed by additional wells.

The Company received 12 monthly Kurdistan export payments during 2017 totaling USD 380 million net to DNO. The landmark August 2017 receivables settlement agreement, which increased DNO’s stake in the Tawke and Peshkabir fields from 55 percent to 75 percent plus three percent of gross license revenues over five years, contributed to higher export payments.

Operational cash flow more than tripled to USD 339 million in 2017 and DNO exited the year with a net cash position of USD 30 million versus net debt of USD 139 million at end-2016.

(Source: DNO)

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Oil Minister meets with the CEO of Lukoil

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has met with Kati Al-Juboori, the CEO of Russia’s Lukoil, and his entourage.

During the meeting the two parties discussed ways to develop the oil sector in Iraq.

Mr. Al-Juboori praised the keenness of the Ministry of Oil to cooperate with global companies and provide the appropriate work environment to execute the plans of the associated administrations of the oil fields.

(Source: Ministry of Oil)

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UNICEF needs $17m to Rebuild Health Facilities for Children

Warning about the “alarming” state of Iraq’s healthcare system, especially in war-ravaged areas in and around Mosul, the United Nations children’s agency has stepped up its support to help the Government provide critical medical services so that children and families affected by violence and displacement can resume their lives.

With less than 10 per cent of health facilities in Iraq’s Ninewah governorate functioning at full capacity, the UN Children’s Fund (UNICEF) said that as many as 750,000 children in the governorate are struggling to access basic health services although violence has subsided. Those facilities that are operational are stretched to the breaking point.

“The state of Iraq’s healthcare system is alarming,” said Peter Hawkins, UNICEF Representative in Iraq, who has just completed a visit to the largest hospital in Mosul.

“For pregnant women, newborn babies, and children, preventable and treatable conditions can quickly escalate into a matter of life and death,” he said, warning that medical facilities are strained beyond capacity and there are critical shortages of life-saving medicines.

Three years of intense violence have devastated health facilities in Iraq. Over 60 health facilities have repeatedly come under attack since the escalation of violence in 2014, severely disrupting access to basic health services for children and families.

In Mosul, UNICEF has rehabilitated the pediatric and nutritional wards of two hospital centres, provided refrigerators to store vaccines for up to 250,000 children, and supported vaccination campaigns to immunize all children under five years old. Most health centres in the governorate have also re-started vaccination services for children.

UNICEF says the Reconstruction Conference for Iraq hosted by Kuwait next week is a unique opportunity for the Iraqi Government and the international community to put children at the heart of reconstruction, including through increased budget allocations to services for children.

Mr. Hawkins said what he saw in the hospitals in Mosul was both “heartbreaking and inspiring,” explaining that the ingenuity and dedication of health workers who are committed to giving newborn children the best possible start in life in the most challenging of circumstances is remarkable.

“They too deserve support so that they can continue to save lives,” he said.

UNICEF is appealing for $17 million to support rebuilding health facilities for children in Iraq in 2018.

(Source: UN)

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Jordan approves deal with Iraq on Oil, Gas Pipeline

By John Lee.

Jordan has reportedly approved an agreement with Iraq to build a twin gas and oil pipeline between the two countries.

The 1,680-km double pipeline will pump one million barrels of oil a day, and 258 million cubic feet of gas, from Basra to Aqaba.

About 150,000 barrels of the oil from Iraq is needed to meet Jordan’s needs. The rest will be exported through Aqaba, generating about three billion U.S. dollars a year in revenues to Jordan, according to the ministry.

An agreement will be signed soon by the Energy Ministries of both countries.

(Source: Xinhua)

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Rotork to supply Karbala Refinery Project

By John Lee.

British-based engineering company Rotork is to supply the Karbala Refinery project in Iraq.

According to a press release from the company, Rotork will provide large quantities of IQ3 non-intrusive intelligent electric valve actuators, designed specifically for automated flow control systems in hazardous environments.

Due to open in 2020, the State Company of Oil Projects’ (SCOP) Karbala Refinery will have a refining capacity of 140,000 barrels of crude oil per day (bpd). Production will meet the latest international standards, serving the growing domestic demand for oil in Iraq and reducing the current level of refined product imports.

(Source: Rotork)