Category: Oil News

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Recon Wins Contract at Garraf Oilfield

China’s Recon Technology has announced that it has signed a $2.8-million engineering and construction service subcontract with Grand Energy Development Limited on a heavy oil transportation system project (the “Project”) at the Garraf oilfield in Iraq for the services that Recon has provided.

Pursuant to the subcontract, Recon shall carry out all the engineering design services, provide the technical support to the procurement, construction, commissioning activities and provide the training services of the heavy oil transportation system project.

Garraf oilfield is located in the province of Thi Qar, Iraq, approximately 5km north-west of Al-Refaei city and 85km north of Nasiriya city. The oilfield is 17.5km long and 5.5km wide. It is estimated to hold 1.3 billion barrels of oil reserves.

Based on the Final Development Plan approved by the Government of Iraq in 2018, the oilfield is undergoing further development in stages to achieve crude oil production of 230,000 barrels per day by the end of 2020.

As part of the Project, the heavy oil pipeline with a total intended capacity of 275,000 barrels per day will be built to support the Garraf production target. By providing the services under the Project, Recon has played an important role in building the heavy oil pipeline.

Shenping Yin, co-founder and CEO of Recon said:

“With advanced technique and wide experiences in the automation and digitalization of oil and gas industry, Recon has a relatively competitive advantage in the engineering design and construction businesses in oilfield segment.

“With the successful completion of the project, we expect to construct more oilfield projects and hope to help more oilfields reduce costs and maintain yields at a healthy level in the near future.“

Recon Technology, Ltd. (RCON) is China’s first non-state-owned oil and gas field service company listed on NASDAQ.

(Source: Recon)

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DNO Completes Baeshiqa Testing, Prepares to Spud Next Well

DNO ASA, the Norwegian oil and gas operator, has announced completion of testing and appraisal of the Baeshiqa-2 exploration well in the Kurdistan Region of Iraq and the imminent spud of an exploration well on a separate prospect, Zartik, located 15 kilometers southeast on the same license.

The testing has proven oil and gas in three separate Triassic aged reservoirs. Evaluation of the test results will determine next steps towards further appraisal and assessment of commerciality.

As previously reported, in November 2019 DNO issued a notice of discovery to the government that hydrocarbons had been flowed to surface from the upper part of Triassic Kurra Chine B reservoir during first phase of testing. The reservoir produced between 900 and 3,500 barrels of oil per day (bopd) with specific gravity ranging between 40o and 52o API and sour gas between 8.5 to 15 million standard cubic feet per day (MMcfd).

Following a workover and acid stimulation, testing resumed in March 2020 in three other separate Triassic aged reservoirs with each flowing variable rates of light oil and sour gas, too.

During the second phase of testing, the lower Kurra Chine B reservoir produced between 600 to 3,500 bopd with specific gravity ranging between 47o and 55o API and sour gas between 4 to18 MMcfd. The test demonstrated that the upper and lower Kurra Chine B reservoirs are in communication, proving a hydrocarbon-bearing reservoir interval of around 150 meters.

The Kurra Chine A reservoir flowed between 950 to 3,100 bopd of 30o to 34o API and sour gas ranging from 1.8 to 3.6 MMcfd from a hydrocarbon-bearing reservoir interval of 70 meters.

The Kurra Chine C reservoir was the deepest encountered in the well covering only 34 meters of what is expected to be a thicker reservoir of around 200 meters. The drilled interval has been exposed to significant fracture damage due to the pumping of lost circulation material. The reservoir produced between 200 to 1,200 bopd of 52o API gravity and sour gas between 3.8 to 6 MMcfd.

Shallower Jurassic aged reservoirs were encountered during drilling and tested. However, the tested zones were not acid stimulated, and the results are inconclusive. The well was spud in February 2019 and drilled to a total depth of 3,204 meters (2,549 meters TVDSS), encountering almost a kilometer of fractured carbonates with poor to good oil shows. Baeshiqa-2 well was drilled safely, below budget and with all exploration objectives achieved.

The Zartik-1 well is anticipated to spud on 15 May 2020. Site construction was completed ten days ago on time and below budget.

DNO acquired a 32 percent interest and operatorship of the Baeshiqa license in 2017. Partners include ExxonMobil with 32 percent, Turkish Energy Company (TEC) with 16 percent and the Kurdistan Regional Government with 20 percent.

(Source: DNO)

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Know your Attorney!

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By Racha Haydar, Founding Partner, Rights and Honors.

“It’s a rough road that leads to the heights of greatness,“
Lucius Annaeus Seneca.

Thriving on challenges, my journey initially started in Lebanon in 2013, with a big dream and a big vision at heart, soon my services extended to challenging business environments across the UAE, Iraq and Lebanon, providing specialist, business focused counsel essential for clients to achieve their business goals through real world advice and market knowhow.

People often wondered, why Iraq? Although doing business in Iraq has its own set of unique and dynamic challenges, the economic potential of Iraq is enormous. Furthermore, Iraq is one of the world’s wealthiest nations that brims with potential for years to come.”

In 2013, my starting point was Kurdistan. Defying social expectations, as a female entrepreneur in a male-dominated industry, earning respect has been a struggle.

I realized that in order to succeed, we needed to build a robust support network.

Our network and services soon became imperative to provide a smooth operation to the investors.  While every business owner is interested to be in the market, they lack the legal structuring especially with the culture and language barriers.

The scope that was provided to customers back then, was based on their daily struggle whether in communication or in understanding the local laws. My expertise soon became a collaborating/ mediating link between local lawyers and foreign companies by simplifying their road map and lessening the burden and challenges of a new market.

Here are some useful tips shared:

  • Engage with the Right Lawyer, a well versed in local laws, ventured with professional experienced local lawyers who are constantly up to date with the amended regulations, abiding by FCPA or any other act. With the ability to Leverage Communication and speed up the process.
  • Ask for recommendations, reports and look for feasible fees.
  • Some business owners usually wait until something goes wrong to consult an attorney, its generally worthwhile to consult one before making any decision that could lead to legal ramifications, partnering with an attorney in Iraq is a must.
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KRG nets $4.5bn Oil Revenues for 2019

The KRG’s Regional Council of Oil and Gas Affairs has published a report containing verified statistics covering the Kurdistan Region’s oil exports, consumption and revenues for 2019.

The report, available in Kurdish, English and Arabic, provides a quarterly analysis of oil export information and average prices, together with a consolidated annual overview.

The data verification was performed by Deloitte.

The KRG regularly assesses what additional disclosures would enhance the transparency of its oil and gas sector. Accordingly, with the release of the 2019 report, the KRG is now providing information on the prepayment balances it owes to oil traders.

The Regional Council for Oil and Gas Affairs acknowledges the positive feedback received so far from domestic and international stakeholders. The council reiterates its commitment to the people of Kurdistan that Deloitte will continue to independently review the region’s oil and gas sector.

A frequently asked questions handbook (also available in Kurdish, English and Arabic) will help readers to understand the report’s contents.

Please click here to download the full report.

(Source: KRG)

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Oil Export Volumes Up in April

By John Lee.

Iraq’s Ministry of Oil has announced oil exports for April of 103,144,911 barrels, giving an average for the month of 3.438 million barrels per day (bpd), slightly up from the 3.390 million bpd exported in March.

These exports from the oilfields in central and southern Iraq amounted to 100,532,427 barrels, while exports from Kirkuk amounted to 2,287,165 barrels. Exports to Jordan were 325,319 barrels.

Revenues for the month were $1.423 billion at an average price of $13.801 per barrel.

March export figures can be found here.

(Source: Ministry of Oil)

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Negotiations Continue on Bina Bawi Oilfield

By John Lee.

Shares in Genel Energy plc were trading lower in Friday after the company said negotiations were continuing regarding the Bina Bawi field in Iraqi Kurdistan.

In a statement, the company said:

“Extensive documentation was received in mid-April from the Kurdistan Regional Government (‘KRG’) following the commercial understanding reached in September 2019. The documentation, which requires further negotiation, includes a new draft Production Sharing Contract (‘PSC’) that seeks to separate the Jurassic oil development from the deeper Triassic natural gas development, with oil being developed on standard terms for the Kurdistan Region of Iraq.

“Genel has been informed by the KRG that while negotiations are ongoing with respect to these documents it will not exercise the notice of an intention to terminate the Bina Bawi PSC. Genel continues to seek a viable and balanced commercial way forward for the development of Bina Bawi’s gas and oil resources, and is constructively engaging with the KRG to accelerate progress.

“Genel continues to minimise spending on Bina Bawi until further tangible progress is made during these negotiations.“

(Source: Genel Energy)

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GKP Directors Buy Shares

By John Lee.

Gulf Keystone Petroleum (GKP) has announced that it was informed on 30th April 2020 of the following transactions by persons discharging managerial responsibilities and persons closely associated with them.

Mr Ian Weatherdon (pictured), Chief Financial Officer, purchased 50,112 common shares in Gulf Keystone Petroleum Limited on 30 April 2020 at a price of 79.8p per share. In total Mr Weatherdon owns 50,112 common shares in the Company representing 0.024% of the issued share capital.

Mr Gabriel Papineau-Legris, Chief Commercial Officer, purchased 20,000 common shares in Gulf Keystone Petroleum Limited on 30 April 2020 at an average price of 84.225p per share. In total Mr Papineau-Legris owns 30,000 common shares in the Company representing 0.014% of the issued share capital.

(Source: GKP)

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Oil Ministry Finalises Export Figures for March

By John Lee.

Iraq’s Ministry of Oil has announced final oil exports for March of 105,118,523 barrels, giving an average for the month of 3.390 million barrels per day (bpd), essentially the same as the 3.391 million bpd exported in February.

These exports from the oilfields in central and southern Iraq amounted to 101,392,918 barrels, while exports from Kirkuk amounted to 3,287,439 barrels, and from Qayara 129,049 barrels. Exports to Jordan were 309,117 barrels.

Revenues for the month were $2.962 billion at an average price of $28.182 per barrel.

February export figures can be found here.

(Source: Ministry of Oil)

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US Renews Waiver for Iraq to Import Electricity from Iran

By John Lee.

Washington has renewed a waiver for Iraq to continue importing Iranian electricity, a US State Department official said.

“The Secretary granted this brief extension of the waiver to allow time for the formation of a credible government,” the official said, referring to US Secretary of State Mike Pompeo, and added that the waiver would expire on May 26, according to Reuters.

Washington has repeatedly extended the exemption for Baghdad to use crucial Iranian energy supplies for its power grid, for periods of 90 or 120 days.

Earlier this month, Iraq’s president named intelligence chief Mustafa al-Kadhimi as prime minister-designate, the third person tapped to lead Iraq in just 10 weeks as it struggles to replace a government that fell last year after months of deadly protests.

“Once that government is in place, the Secretary will reassess whether to renew the waiver and for how long,” the US State Department official said.

The official added that the waiver applied only to electricity and referred to the Treasury Department for transactions related to Iranian natural gas imports.

Electricity Minister Luay al-Khatteeb told S&P Global Platts last week that Iraq needs three to four years to complete projects that would provide the necessary natural gas for its power stations.

(Sources: Tasnim, Reuters, S&P Global)

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Baghdad “Halts Payments to KRG”

By John Lee.

Baghdad is said to have stopped payments to the Kurdistan Regional Government (KRG).

Writing for Argus Media, Rowena Edwards says central government will also seek to recover payments made since the start of the year, in the absence of KRG transfers of crude oil, which were part of the as-yet-unsigned 2020 budget.

More here.

(Source: Argus Media)