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Iran to Boost Gas Exports to Iraq

A top Iranian energy official unveiled plans for a rise in natural gas exports to neighboring Iraq next year.

In an interview with Tasnim on Saturday, Managing Director of the National Iranian Gas Company (NIGC) Hamid Reza Araqi said the country’s exports of natural gas to Iraq will increase during the spring and summer of 2018.

Iran’s gas exports to Iraq, which now stand at 14 million cubic meters a day, are planned to reach the maximum capacity within three years, he added.

On June 22, at the beginning of summer, Iran started to export natural gas to Iraq after years of negotiations and settlement of financial problems.

Iran’s daily gas exports to Iraq are to reach 35 million cubic meters at the final stage.

Tehran and Baghdad signed a deal on the exports of natural gas from the giant South Pars Gas Field in 2013.

Under the deal, the Iranian gas is delivered to Sadr, Baghdad and al-Mansouryah power plants in Iraq through a 270-kilometer pipeline.

(Source: Tasnim, under Creative Commons licence)

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Gazprom Neft commissions New Gas Plant at Badra

Russia’s Gazprom Neft has launched the commercial operation of a 1.6 billion cubic metres capacity gas processing plant at its Badra field, Iraq.

Alexander Novak, Minister of Energy of the Russian Federation, was present at the opening ceremony for the new facility, together with the Minister of Oil of the Republic of Iraq, Jabbar al-Luaibi, and Gazprom Neft CEO Alexander Dyukov.

Dry feed gas, processed at the Badra field, is transported via a 100-kilometre pipeline to the Az-Zubaidiya power station, supplying electric power not just to provinces throughout Iraq, but also to the capital city of Bagdad.

In addition to this, gas will be used to meet the Badra project’s own needs as fuel for the gas-turbine power plant. Five gas turbines are able to produce a total 123.5 MW of electric power, supplying oil and gas processing facilities, drilling rigs and oil-producing wells. A 10-MW overhead power line will soon begin feeding into the Gazprom Neft Badra accommodation complex, as well as into the town of Badra and neighbouring population centres.

Natural gas liquids (NGLs) produced at the Badra project’s gas processing plant will be used to produce LPG to be supplied to the Iraqi state-owned Gas Filling Company. The plant also includes facilities for sulphur production and granulation.

Alexander Dyukov, Gazprom Neft CEO, made the following comment at the official opening ceremony of the gas plant:

“Gazprom Neft is continuing its development of the Badra field, in strict adherence to the field development plan. Today sees the full-cycle gas plant — built by our company using the most cutting-edge technologies available on the world market — going into commercial production.

“This is a unique enterprise for the region, at which Gazprom Neft has, since starting work, been able to monetize all of the hydrocarbons produced here, ensuring associated-petroleum-gas (APG) utilisation of at least 95 percent.”

(Source: Gazprom Neft)

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Genel Energy attempts to Refinance Bonds

Genel Energy has announced that it has instructed the trustee for the GENEL01 bonds (ISIN: NO 001 0710 882) (‘GENEL01’ or ‘the Bonds’) to summons a bondholders’ meeting to resolve a refinancing of the existing Bonds.

The Company proposes to refinance GENEL01 through a partial early redemption and debt reduction by replacing the existing Bond Agreement with a new USD 300 million bond agreement. Bondholders holding a significant proportion of the Bonds have confirmed their commitment to vote in favour of the proposal.

In the proposal, the Company seeks to reduce its existing bond debt from the currently outstanding USD 421.8 million to USD 300 million, and at the same time extend maturity through amending and restating terms to a new 5 year bond with a coupon of 10% per annum.

Bondholders will, on a pro-rata basis, receive a partial early redemption of USD 121.8 million in cash at the prevailing call premium of 103% of par value. The remaining USD 300 million outstanding Bonds will remain outstanding with the same ISIN but with new and amended terms as set out in the term sheet described in detail in the summons for bondholders’ meeting (available at www.stamdata.com).

The bondholders meeting will be held on 20 December 2017 at 09:00 CET at the premises of Nordic Trustee AS. If approved, cash settlement and amendment of terms are expected to take place on 22 December 2017, subject to approval by the bondholders’ meeting.

The Company has mandated DNB Markets and Pareto Securities as managers for the contemplated transaction.

(Source: Genel Energy)

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“Good Quality” Oil Bearing Reservoirs found at Taq Taq

Genel Energy has announced an update on activity at the Taq Taq field (Genel 44% working interest).

The TT-29w well, which was drilled to appraise the northern flank of the Taq Taq field, has been completed as a producer after successfully encountering oil bearing Cretaceous reservoirs.

The well, which was drilled to a measured depth of 3,100 metres, encountered good quality oil bearing Cretaceous Shiranish and Kometan reservoirs. Six zones were subsequently tested over a 20 day period, with test rates of up to 6,400 bpd (40/64 inch choke) of 48° API oil delivered from individual zones.

Four of the five tests in the Shiranish produced dry oil, with one test tight. The Kometan reservoir test produced oil with a 40-50% water cut, confirming the oil water contact within the Kometan reservoir at this location in the field. TT-29w production has commenced from the Lower Shiranish reservoir at a rate of 3,200 bpd of dry oil on a restricted 24/64 inch choke, with the expectation that this rate will increase following an initial observation period.

The TT-29w well has proved a current oil water contact at this location on the northern flank of the field at a level at least 145 metres deeper than pre-drill estimates. Combined with the testing results, management is optimistic for the potential of the northern flank of the Taq Taq field.

However, it is too early to estimate what impact the well result will have on reserves, long-term production rates or future investment activity in the northern flank and the field as a whole.

In addition to the positive result from TT-29w, the TT-30 Pilaspi well was also successfully drilled as a producer in November and is currently producing around c.650 bopd. A further Pilaspi development well (TT-31) is planned before the end of 2017.

Gross production from the Taq Taq field is currently 15,100 bopd. Gross field production averaged 13,700 bopd in November 2017 and has averaged 18,300 bopd in 2017 to date.

(Source: Genel Energy)

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US emphasises Importance of Sound Banking System

US Ambassador to Iraq Douglas Silliman (pictured) has  joined other distinguished guests and speakers at the Iraq Banking and Investment Summit on December 2.

The Ambassador spoke about the need to create economic opportunity for Iraq’s younger generation through a transition from a government-controlled, oil-based economy, toward a more diversified free market system that fosters and encourages private investment.

He noted the need to improve the ease of doing business in Iraq and emphasized that a sound banking system will be crucial to provide financing for aspiring entrepreneurs and business people.

The U.S. Embassy supports Prime Minister Abadi’s efforts to address these reforms and ‎is actively engaged in promoting U.S. business investment in Iraq.

(Source: US Embassy)

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Oil Exports Rise Again in October

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for November of 105,050,804 barrels, giving an average for the month of 3.502 million barrels per day (bpd), considerably up on the 3.348 bpd exported in October.

The exports were entirely from the southern terminals, with no exports from Kirkuk via Ceyhan.

Revenues for the month were  $6.008 billion at an average price of $57.194 per barrel.

October export figures can be found here.

(Source: Ministry of Oil)

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Two more charged in UK’s Unaoil Investigation

The UK’s Serious Fraud Office (SFO) has charged two further individuals in relation to the Unaoil investigation.

Paul Bond and Stephen Whiteley have both been charged with conspiracy to make corrupt payments to secure the award of contracts in Iraq to Unaoil’s client SBM Offshore.

The charges relate to alleged corrupt conduct within Unaoil, between June 2005 and August 2011.

  • Paul Bond has been charged with two offences of conspiracy to make corrupt payments, contrary to section (1) of the Criminal Law Act 1977 and contrary to section 1 of the Prevention of Corruption Act 1906.
  • Stephen Whiteley has been charged with one offence of conspiracy to make corrupt payments, contrary to section (1) of the Criminal Law Act 1977 and contrary to section 1 of the Prevention of Corruption Act 1906.

Paul Bond and Stephen Whiteley will appear before Westminster Magistrates’ Court at 10am on Thursday 7th December.

The investigation is ongoing.

(Source: UK SFO)

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Gulf Keystone appoints New Non-Executive Director

Gulf Keystone Petroleum (GKP) has announced the appointment of Jacobus (“Jaap”) Huijskes as a Non-Executive Director with immediate effect.

Jaap Huijskes was most recently a Director at OMV, the Austrian integrated oil and gas company listed on the Vienna Stock Exchange.

While at OMV, he was responsible for Exploration and Production (E&P) and oversaw the Company’s expansion into new territories. He also played a key role in OMV’s operations in the Kurdistan region of Iraq. 

Prior to this, Mr Huijskes held a number of senior positions at Shell, including Executive Vice President of Upstream Major Projects and Project Director at the Sakhalin Energy Investment Company, which was set up to develop the Sakhalin-II oil and gas project in Russia. He holds a Masters in Mechanical Engineering from Delft University of Technology in The Netherlands.

Mr Huijskes is currently a director of the Dutch state-owned integrated oil and gas company, Energie Beheer Nederland. He was a member of OMV’s Executive Board for E&P between 2010 and 2016.

Keith Lough, Gulf Keystone’s Non-Executive Chairman, said:

“We are pleased to welcome Jaap Huijskes to the Board of Gulf Keystone Petroleum. He has an impressive industry track record in the oil and gas sector, including relevant experience in the Kurdistan region of Iraq.”

(Source: GKP)

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“Unprecedented Upsurge” in Iraqis seeking Second Citizenship

By John Lee.

The escalating tensions between Baghdad and Erbil have triggered an unprecedented upsurge in applications from wealthy Iraqi nationals for second citizenship programs.

Data collected by Savory & Partners, one of the largest companies in the Middle East that provides citizenship-by-investment programs, shows that compared to the same quarter last year, interest has increased by 300 percent, while applications processed are more than 42 percent higher than last year.

Company founder and CEO Jeremy Savory (pictured) told Iraq Business News:

“The immediate days following the Kurdistan referendum saw a remarkable spike in the number of applicants from Iraq, not only from Kurdish Iraqis, but from all parts of Iraq.

“In the past, the Iraqi passport was very strong … but over recent years the number of countries which have visa-free waivers has dropped considerably; hence, the need for second passport that enables people to travel to more countries visa free has seen a great spike.

“We have done Iraqi citizenship applications for Iraqi nationals for all the five Caribbean jurisdictions, all of which have been approved by the government. We have done European citizenship applications for Malta and Cyprus for Iraqi nationals, too.”

Iraqis constitute the company’s third largest client group after Syrians and Lebanese, with St. Kitts, Grenada and Dominica in the three most popular programs with an equal demand for all three programs. The company had only one Iraqi rejection in the last six years out of total of close to 800 passports, a rejection rate of less than 1 percent.