Date posted today 09:14
Votes for this Posting Voted 2 times.
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http://www.proactiveinvestors.co.uk/companies/news/35501/gulf-keystone-petroceltic-and-vallares-shares-higher-as-super-major-exxon-enters-kurdistan-35501.html
9:01 am Oil giants are on the march to stake a claim to highly prospective tracts of Kurdistan.
Shares in the Kurdistan focused explorers were up sharply in early trade as the first of the super-majors made its move into the semi-autonomous region of Northern Iraq.
ExxonMobil (NYSE:XOM) has signed contracts with the Kurdistan Regional Government for six blocks.
While it is seen as a massive vote of confidence is the area, it is also being view as a potentially incendiary(capable of causing fire) move which may provoke a political backlash from the Iraqi authorities in the south.
The Exxon move comes at a delicate time as Baghdad and the KRG attempt to pass legislation that would support the award of these potentially lucrative oil and gas contracts in Kurdistan.
Of late the region has become a magnet for mid-tier players such as Marathon, Hess (NYSE:HES) and Repsol (MCE:REP).
But Exxon’s entry takes the interest to a different level.
Not surprisingly the shares in the companies that blazed a trail in the area were up strongly.
Gulf Keystone Petroleum (LON:GKP) advanced 13.9 pence, or almost 10 per cent, to 155.65 pence, and Petroceltic (LON:PCI), which gained acreage in the latest contract round, advanced 0.18 pence to 6.68 pence.
Vallares (LON:VLRS), which is in the process of merging with Turkey’s Genel, was also on the risers’ list, up 15 pence at 1,000 pence.
The company’s chief executive, Tony Hayward, described Kurdistan as the last great oil frontier.
The American investment bank Citi was one of the first look at the development of Kurdistan, and it is predicting a period of “major period of news flow”.
Based on data from the US Geological Society, Citi suggest the region could hold over 50 billion barrels of oil – which means it is comparable in scale to Libya.
Counterbalancing this excitement is uncertainty over the production sharing contracts being issued by Kurdistan, which are still being disputed by the authorities in Baghdad.
These concerns are further exacerbated by the news that some oil companies aren’t receiving full payment for their oil exports.
“Both issues are unlikely to be resolved until an Iraqi oil and gas law is ratified, in our view,” Citi said in a note penned by Michael Alsford and Mukhtar Garadagh.
“While some progress has been made with both sides resuming talks for the first time since 2007, there is no visibility on the timing of this legislation.”
The pair suggest that consolidation could be on the cards as the big boys go after a larger slice of the action.
Indeed, we are already witnessing the first significant move in this regard with US$4 billion merger of the Nat Rothschild vehicle Vallares (LON:VLRS) with Genel Energy.
“The approval of an Iraqi oil and gas law and resolution of the outstanding issues between Erbil and Baghdad could be the trigger for the oil majors (currently focused in southern Iraq) to enter the region and consolidate the smaller names with large resource positions,” the Citi pair said.
Largely unexplored prior to 2004, recent drilling has resulted in the discovery of around 5 billion barrels of oil in Kurdistan, the analysts point out.
They expect exploration and appraisal drilling to accelerate into 2012, and estimate that more than 25 E&A wells will be drilled over the next 15 months.
“Based on current production sharing contract terms, Kurdistan has the potential to be a low-cost operating environment in the first or second quartile of our industry cost curve,” Alsford and Garadagh observed.
Gulf Keystone’s progress to date won’t have escaped the notice of the big hitters looking to enter the region in Exxon’s wake.
Earlier this week the explorer unveiled a significant upgrade to the oil in place volumes for the Shaikan block in Northern Iraq.
An independent review by Dynamic Global Advisors estimates the Kurdistan field contains 8 billion barrels of crude calculated on a P90 basis – meaning the oil has a 90 per cent certainty of being produced.
The figure rises from 4.9 billion barrels previously.
Following the analysis carried out by Houston-based DGA the P10 value has increased to 13.4 billion barrels and the mean value to 10.5 billion barrels.
This is the second very significant upgrade to the Shaikan resource estimate this year and the third since 2009.
It is based on preliminary data acquired from Shaikan-4 and 3D seismic taken from the Shaikan and Sheikh Adi blocks. DGA also included the new Triassic discovery made with the Shaikan-2 appraisal well.
Separately, Petroceltic’s chief executive Brian O’Cathain said recently the company was “very fortunate” to grab its highly prospective acreage in Kurdistan.
And he reckons the door has now slammed shut on smaller firms attempting to stake their claim in this emerging oil territory.
In late July the junior explorer teamed up with American firm Hess Corp to snap up two licences in the semi-autonomous region of northern Iraq.
“We were delighted to pick up the two blocks,” O’Cathain said in an interview with Proactive Investors.
“They are excellent blocks with five anticlines – three on one and two on the other – any one of which could potentially contain in excess of 1 billion barrels of oil in place.
“It is the same petroleum system and target horizon as in the adjacent Gulf Keystone’s Shaikan block.
“It is the Shaikan type play that we are chasing, particularly in the Triassic which has been proved up by Gulf Keystone, and other operators in the area.”
“We are only a few kilometres away from Shaikan so we are very optimistic.”
He added: “The Kurdistan assets have the potential to be absolutely huge for Petroceltic, even though our equity in the projects is relatively modest at 20 per cent.
“The fact that we have 20 per cent of what could potentially be 4 or 5 major discoveries is very significant.
“We are very excited about it and we are delighted to have acquired these assets just before the door effectively closed for smaller companies.”
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Reuters:
"The KRG has for the last few months been in discussions with A NUMBER OF MAJOR OIL COMPANIES. This resulted in the recent signing by EXXON MOBIL of contracts to explore in six blocks," KRG adviser Michael Howard said.
Hmmm..... I wonder what happened to all of the OTHER oil companies who were not immediately successful. I can't see them simply walking away, just because Exxon has snapped up licenses in several of the Kurdis blocks, can you?
IMHO, this is likely to be just the beginning.... just the beginning of the COMPETITION/ BIDDING WAR/ AUCTION - call it what you like, that we have all been craving for!
Oddly, this idea was first mooted in September when TH/Vallares moved in to town:
http://www.thejakartaglobe.com/business/21b-deal-may-spark-oil-fight-in-iraqi-last-great-frontier/464739
Extract; "While post-Iraqi war tensions between the government in Baghdad and Kurdish authorities deterred entry by EXXONMOBIL, ROYAL DUTCH SHELL and BP, improved relations and a series of discoveries now may draw them in."
Interesting too how that article was so specific, and that these companies, along with the Chinese and ConocoPhillips, have often been rumoured to be sniffing around some of the Kurdistan assets.
2 months on, it is beginning to look as though what was once almost a one-horse (GKP) town is all set to become something akin to the headquarters of the Aga Khan's thoroughbred horse-racing stable!
IMO, the starting pistol has sounded, and the race has just begun. And it is great to see so many punters (who placed their bets on GKP when the odds were stacked against them) finding those odds turning in their favour.
GLA, scaramouche
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Re: KRG Exxon Signs..->Shari's warran...
livic1971
33
Exxon are a $377 billion company, they aren't going to piss off Bagdhad for the small change of minority stakes in unexplored blocks.
The entire value of the acquirable listed companies in Kurdistan probably stands at less than $10 billion. Once you strip out cash its possibly nearer $5 billion. There are some mid cap players but I doubt they are after them as the bulk of their assets won't lie in Kurdistan.
VST $10 million
LFD $10 million
WZR $250 million
SNM $250 million
GKP $2500 million
HOIL $750 million mostly cash
Genel/Valleres $4000 million much of which is cash
PCI $300 million mostly for Algeria
DNO $1000 million
GKP, DNO or Genel are really the only ones that even vaguely look worthwhile for a company the size of Exxon.
Its also possible that Exxon feels it can't work in the South once the US army leaves and the returns from the South don't justify the expense. Shaikan has to be a target for Exxon IMHO as there is little point to this move otherwise.
I think KNOC may well have been trumped for Shaikans BIRs and a major player like Exxon is almost certainly going to want a majority stake and to operate Shaikan.
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10:33
Thoughts on Exxon's Entry
Gramacho
85
Wow! That qualifies as shock and awe. I got back in last night and 11:40 after going to see Rock of Ages (good show BTW) and thought “Shall I switch on? Nah there was nothing happening at 3:30pm when we left home.” LOL! As many posters have said when things happen they will happen quickly.
What blocks will Exxon have taken? Even though they are the 1000 lb Gorilla of the industry the KRG hold most of the aces and I would not be surprised to learn that they have asked Exxon to take one or two of the high mountain blocks in West and North West that border with Iran. For strategic reasons who else would you want operating the border blocks with Iran but the US Government’s de facto oil company?
Looking at the SNM map pretty much every block in the northern part of Kurdistan within 150km of the Iranian border has a US operator.
http://www.shamaranpetroleum.com/i/pdf/Kurdistan_Oil_Gas_Activity.pdf
Sindi-Amedi = Perenco
Sarsang = HKN (+Marathon)
Dinarta = Hess
Harir = Marathon
Shakrok = Hess
The KRG has ensured that the US will continue to have a very significant strategic interest in Kurdistan going forward and that interest is focused in a ring towards the Iranian border. It will be interesting to see if Exxon has taken one of the southern blocks bordering Iran which are politically more active but are likely to be less prospective from an oil standpoint.
Whilst the high mountain blocks may well be prospective they will be even more challenging from a logistical perspective and will require someone like Exxon with deep pockets to drill. Additional infrastructure (roads etc) may be needed to cope with winter conditions.
To balance the more challenging unlicensed exploration blocks Exxon may also have been allowed to secure some back in rights in the sweet spot blocks with discoveries. Although the interest levels are not as high as Exxon would like, the seismic and well data that comes with those back in rights is extremely valuable. It would help its regional understanding of Kurdistan geology immeasurably and place Exxon in a great position when the period of consolidation commences.
What of BPs position now? Exxon snatched their Rosneft Arctic deal from under their noses. With Exxon leading the charge into Kurdistan and Heyward also having taken has taken some of the prime producing acreage there must be extreme pressure from within and externally for it to match Exxon’s entry into Kurdistan and/or secure more Iraqi exploration acreage.
I had mistakenly assumed that the supermajors would put pressure on the Iraqi government to agree to end the blacklist only after the upcoming Iraqi exploration licence round. From Baghdad’s perspective, leaving aside political differences with the KRG, it made sense for them to discourage supermajor participation in Kurdistan until they had successfully licensed their own exploration acreage. After all they would want to see large seismic and exploration well commitments made by the supermajors and majors to ensure a successful round and to provide more substance to the optimistic long term production forecasts they have touted. The ICG would have seen investments in Kurdistan as potentially diverting funds that would have otherwise been spent in Iraq.
IMO Exxon’s entry to Kurdistan could not have been made without assurances having been made that this will not in any way diminish its appetite for Iraq’s 4th licence round which contains very substantial tracts of both gas and oil prone acreage.
The implications for GKP are great. It will be particularly interesting to hear whether KNOC has had the rug pulled from under it for the AB rights. Exxon seem to be good at doing that these days. GKPs AB interest together with the back in rights is represents sufficient contingent and prospective resources to interest any company even one the size of Exxon.
Great times and well done all holders
Regards,
Gramacho
=====================
Keep that 380p in mind...
Robbean
22
As I recall, Goldman's target price was 380p after they reduced the risk discount to 15%. This was before Exxon entered the region and before the latest very large increase in Shaikan OiP.
We also have the current valuation of something in the region of $1 per barrel that contrasts with the typical takeover valuation of $8 / boe (Macquarie report). And the drill bit turning rather quickly on Ber Bahr with the potential there exciting enough to get the former head of BP hot-footing it to Kurdistan. His case must have been compelling as he very quickly managed to raise a couple of £££ billion from his mates.
That's the beauty of the current share price, it's ludicrously easy to hold because the valuation, by any measure, is absurdly cheap. Exxon entering is as good as Maliki declaring the Oil and Gas Law is a done deal. In fact, given the nature of Iraqi politics, it's probably better!
In the current market, this is as near to "no brainer" as you can get. If you're tempted to sell / get spooked by a drop of a few pence here and there, just take a look at the 3 year. Then try to extrapolate from there given all the above news. It won't be a straight line but the next leg up has just begun. IMHO.
Good luck all.
Robbean
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Re: Additional Industry Interest Imminen...
Bah Bah Black Sheep
8
Holy carp, so that's what 'Imminent' means
Thought they would have 'dropped it' at the Conference, but then again, that starts the day after tomorrow! Very nice. Very very nice.
Sorry Gram, but I have to disagree with your Iran border Blocks theory. I think it will be much more about Blocks close to - or even within - the "Disputed Territories". The priority for KRG and ICG is to amicably resolve these lands, and what better reason for US to keep a few thousand 'security people' in-country (to look out for their 'national interest')? As you point out the Blocks in the south-east close to the Iran border are not so prospective (gas prone), but I would add that, IMO, the high mountain zone (next to Iran border in the north-east) is also a question mark with regard to 'over-folding' / lost reservoir seals / potential 'oilfield graveyard'. At the end of the day XM is an Oil Company - and they will be after the 'sweet spot'. Guess who's got that?!
So let me join in the 'which 6 Blocks?' guessing game, with reference to Shamaran's map:
http://www.shamaranpetroleum.com/i/pdf/Kurdistan_Oil_Gas_Activity.pdf
1. That 'open' 'Block-with-no-name', just to the left of Headless Horseman (Duhok Central), might that just be called 'something River' or 'something Creek' as the entire western boundary follows the Tigris. How about 'Moore fooking oil Creek' ??
2. Headless Horseman (Duhok Central) itself of course (read some of my past posts). I was always intrigued about why Murphy only got 50% here (and that the KRG 'reserved' the other 50%. Well, I think we may now know who this was reserved for....
3. Shaikan of course, maybe just BIR initially.
4. Akri Bijeel. 20% BIR plus GKP's 20%, a nice chunky 40% WI (undiluted) there.
5. Sheikh Adi ?
6. Ber Bahr ?
The last-two mentioned (SA and BB) would of course require that 'someone' gives-up a bit of interest. Is Todd's 'explosion' also 'Imminent'??
GLAH, we've been through the ups and downs together - about time we had the 'big-up'.
BBBS
=================
Mind your stops guys...
doctorh
9
I have probably grown quite cynical about the machinations of the market in recent years.
However, in my experience when you get a daily price rise at this pace and with further big news anticipated, the cheeky MMs will often orchestrate a quick dip of the price just before close of play to wipe out any tight stops.
Tempting as it is to lock in profit, I would be extra careful with setting trailing stops too close at this stage - it would very easy to end up locked out at the last minute, be unable to re-enter a position over the weekend and possibly miss out a significant gap up on Monday.
IMHO
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http://screencast.com/t/BXxxTMb4xEM
6:42
Daily Volumes & Auction Video
MikeyAdmin
29
By Billy Gruff voice
http://screencast.com/t/BXxxTMb4xEM
34,531,305, LSE and Total
AT's 16,369,202
UT, 144,264
SP, 177.25p
Excellent finish IMO, leaves a good springboard for Monday
If I have made mistakes with my interpreation of the Auction, then sorry folks.
Maybe STM can explain better.
Mikey,
==============
Exxon Deal - Baghdad Comments
oilysteve
Well what a day, just catching up and catching my breath. One story on the news wires that may or may not have been posted with a few nice comments from Baghdad as you would expect
AFP - Oil giant ExxonMobil has signed a deal with Iraqi Kurdistan, possibly jeopardising its contract for the giant West Qurna-1 field in southern Iraq, an Iraqi oil ministry official said on Friday.
"Yes, ExxonMobil signed a contract," said Abdelmahdi al-Amidi, director general of the oil ministry's petroleum contracting and licensing directorate, citing an adviser in the Kurdistan ministry of natural resources.
Asked if the deal with Kurdistan would mean Exxon could lose its contract for the West Qurna-1 field, Amidi said the company "must lose it."
Baghdad regards any oil contracts not signed with the central government as invalid. Amidi did not provide additional details about the deal.
According to an oil ministry source, the Kurdistan Regional Government (KRG) a few weeks ago gave Exxon 48 hours to make a decision on investing in an oil field in the region.
Exxon asked the Iraqi government for authorisation to sign the deal, said the source, who spoke on condition of anonymity.
But Hussein al-Shahristani, the deputy prime minister for energy affairs, demanded that the ministry send a letter to Exxon saying Iraq's oil belongs to all Iraqis, and that companies wanting to work in the country must sign contracts with the Iraqi government only, said the source.
Shahristani also asked the ministry to tell Exxon that it would lose its existing contract with the Iraqi government if it signed a deal with Kurdistan.
Shahristani met with an Exxon representative last week, the source said, but the results of that meeting are not known.
A source in the Kurdistan ministry of natural resources said the deal with Exxon was signed in London.
ExxonMobil would not comment on the agreement when contacted by AFP.
The Kurdistan Regional Government (KRG) also posted a Financial Times article about the deal on its website.
"The KRG has for the last few months been in discussions with a number of major oil companies. This resulted in the recent signing by ExxonMobil of contracts to explore in six blocks," the article quoted Michael Howard, an adviser to the KRG, as saying.
It is a ground-breaking deal, Ruba Husari, the editor of the Iraq Oil Forum, told AFP.
"For the first time, a company -- and not just any company but a major -- decided to break the red line of signing a contract that is not recognised by the federal government as legitimate after it has obtained a major one from Baghdad," Husari.
She estimated that Exxon took the contract because "what it was offered was a production-sharing contract (PSC) that is a lot more lucrative" than the service contract it had signed with Baghdad.
In January 2010, the Iraqi oil ministry completed the deal with ExxonMobil and Anglo-Dutch giant Shell to develop production at West Qurna-1, which has reserves of around 8.5 billion barrels and is the country's second-biggest field.
http://www.france24.com/en/20111111-exxon-inks-oil-deal-with-iraqi-kurdistan-official
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Iraq threatens Exxon with blacklist
Senior ExxonMobil officials attend the signing of the West Qurna 1 contract in Baghdad in January 2010. (BEN LANDO/Iraq Oil Report)
By BEN LANDO of Iraq Oil Report
Published November 13, 2011
Iraq's top energy official threatened Saturday to oust ExxonMobil from the super-giant West Qurna 1 oil field, after the super major signed deals for six blocks in the semi-autonomous Kurdish region.
Baghdad considers illegal all oil deals made without central government approval. Former Oil Minister and current Deputy Prime Minister for Energy Hussain al-Shahristani has enforced a strict blacklist policy, banning any firms signed with the Kurdistan Regional Government (KRG) from oil deals wi...
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The Hard Part
bonobo77
35
The hard part was done when you took a chance on an AIM junior exploring for oil.
The hard part was done when you watched it multibag on first oil at Shaikan and you resisted the temptation to sell.
The hard part was done when you did your research.
The hard part was done when you stuck to your belief in much more to come.
The hard part was done when you ignored the derampers.
The hard part was done when you watched your investment halve but didn’t panic.
The hard part was done when you absorbed world events and factored them sensibly into your odds.
The hard part was done when you added when you could, according to your means.
The hard part was done when you bought in before the World’s No.1.
And now they are here, you will not sell until you are properly and rightfully rewarded for all your hard work.
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10:20
Re: Exxons blocks
peakyblack
15
Atrocity
Whilst it is alway good to manage one's expectations with GKP and the Euphoriua that has occurred on many other weekends and turned out to be a damp squib. I think one can afford themselves a little pat on the back this weekend. This news is simply huge and with the likes of Exxon signing and Chevron on their way, Kurdistan uddenly become legitimised as a region for investment not just for us 'pain in the butt' PI's but also for the more risk averse II's and M & A strategy funds. When a region has so much oil, relative stability and a governing body, KRG, that gets the joke you have all the ingredients for a frenzy of M & A.
That being the case, it's not going to just be Chevron running the slide rule over Shaikan, but now every big bank Oil desk analyst will be running the numbers. I fully expect over the next few weeks we move from the 'small and beautiful' broker ratings to the 'giant and magnificent' (to coin an eloquent phrase from this morning) a place where only Goldmans moved into early.
Kurdistan is very close to being legitimised! That changes everything on this investment.
If this share price doesn't plough straight through previous highs by lunchtime Monday I will eat my mouse
Good luck all
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10:15
There will be sellers on Monday.....
ChapinAfrica
16
its only natural,............But there will be buyers falling over themselves on Monday morning even at the current SP, the more weakness that is shaken out,.. the stronger the holding and higher the SP will climb.
As for some of the comments the IIs will not be interested,......i would be amazed if they were not jockeying for position now to grab more, this is still a multi bagger even now.
I expect Goldman Sachs have been sharpening there pencils and tweaking the figures all weekend, a large upgrade expected, they cannot stay silent much longert,....and the likes of EVO and Co will follow like sheep,..boy did they get this one wrong spectacularly....GKP simply cannot be ignored or fobbed off any longer.
Always been long and very, very, strong,.....here till the fat lady dances!
AIMOVHO,
CiA
====================
Author SpikeyDT View Profile Add to favourites Ignore
Date posted today 10:18
Subject US companies get slice of Iraq’s oil pie
Votes for this Posting
Message
Sunday 13 November 2011
http://www.deccanherald.com/content/171767/us-companies-get-slice-iraqs.html
US companies get slice of Iraq’s oil pie
Andrew E Kramer, NYT
When Iraq divided up its oil pie two years ago, the Russian company Lukoil won a slice equivalent to about 10 per cent of Iraq’s known reserves.
It was part of a trend: Five of the six major fields, together representing several million barrels per day of potential output, went to European, Russian and Asian oil companies. It looked as though not much was going to companies from the US, the country that took the leading role in the war.
But read the fine print of those contracts, and companies more familiar to Americans are now poised to benefit handsomely as the oil business picks up in Iraq.
The oil services companies Halliburton, Baker Hughes, Weatherford International and Schlumberger already won lucrative drilling subcontracts and are likely to bid on many more in one of the world’s richest markets for companies that drill oil wells. These days, that is not the oil majors.
Halliburton and Baker Hughes are American, while Schlumberger is based in Paris though its drilling subdivision is headquartered in Houston. Weatherford, though founded in Texas, is now incorporated in Switzerland. “Iraq is a huge opportunity for contractors,” Alex
Halliburton has won drilling and well refurbishment contracts at three of the six major fields, Weatherford International, Schlumberger and Baker Hughes at two others. One Chinese oil-services company is also working on these projects, as is a domestic Iraqi subcontractor, the Iraq Drilling Co.
Iraq signed the production contracts with international oil companies with the goal of increasing its oil output from about 2.4 million barrels a day in 2009 to as much as 12 million barrels a day within six years. So far, output has risen to 2.7 million barrels of oil per day.
Unrealistic optimism
Experts have dismissed the initial Iraqi target as unrealistically optimistic; last week, Iraq’s oil minister said it could be revised down to between seven and eight million barrels per day. Still, even the smaller increase from Iraq in coming years could ease global supplies and provide the Iraqi government with much needed funds for reconstruction.
The awarding of this vast new oil frontier to mostly non-American oil majors deflected criticism that the US had invaded Iraq for its oil. The Russian oil concession in Iraq shows how geopolitics shaped the awarding of the primary contracts but is not preventing US oil services companies from winning business today.
Lukoil struggled to hold onto its Saddam-era contract in a sprawling, geopolitical chess game over a decade. It wrapped in US oil companies, the Russian government, and threats by Moscow to cancel post-war Iraqi debt relief if the Iraqis followed US advice and stripped Lukoil of its license.
When Lukoil finally secured rights to the field by re-bidding for it, the company quickly subcontracted the drilling.
The more sweeping drilling tendering for this field, called West Qurna 2, is just getting under way now. Under its contract, Lukoil committed to produce 1.8 million barrels of oil per day from the field by 2017; it was unclear whether that would be revised along with the broader revision of output targets under way in Iraq now.
In any case, Lukoil says it will need to drill more than 500 wells to develop the deposit, which is underneath agricultural, scrub and dry clay land west of the Euphrates River in the southern Basra province. Along with the contract already granted, Lukoil has tendered for 23 production wells, and plans another tender this year for another 50 or so. Analysts estimate drilling an oil well in Iraq costs between $10 and $20 million.
Munton said US oil-services companies were poised to win much of the drilling work at West Qurna, as at other Iraqi fields, though other capital outlays such as for processing facilities and pipelines would go to a more international cast.
Joost R Hiltermann, deputy programme director for the Middle East and North Africa with the International Crisis Group, which is monitoring the security implications of Iraq’s oil policies, said Iraqi officials are unlikely to try to diversify away from US companies at the less politically sensitive subcontracting level.
US oil-services companies are well positioned to win the work because they have been in Iraq for years on contract with the US occupation authorities and military. Rather than scaling back as the US military pulls out, Halliburton is planning to expand.
The company has 600 employees in Iraq today and said in a statement it intends to hire “several hundred” more before the end of the year. “We continue to win significant contracts in Iraq, and are investing heavily in our infrastructure,” Halliburton said.
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Re: SP
investor48
35
Hi All,
Let's stick to some yardstick.Feb this year GKP's board announced stock options for GKP's senior management and board of directors for 2010 performance.
What was GKP's milestone in 2010?OIP Shaikan P90 of 1.9billion barrels.
The options are: to subscribe for new GKP shares at 175p,exercisable in equal tranches only when GKP's SP reaches 275p,325p and 375p.
Todd and the board must have been extremely confident of GKP's fundamentals for him to set such high SP for his own and the board's stock options.But since the 2nd upgrade of Shaikan's OIP to 4.9billion P90 in April,the SP has hardly blinked!
Then we had OIP upgrade from Sheikh-Adi of P90 of 1billion barrels in Aug and the share price again hardly blinked.
Last week we had another OIP upgrade of Shaikan to 8billion barrels P90 the SP moved 9p.It took an ExxonMobil entry into Kurdistan to move it to close at 177.25p which is only 2.5p above TK's stock option for 2010 performance set in Feb this year,but no where can this be exercise yet!!
Today we have confirmation of these 6concessions at the Erbil Oil and Gas conference.But we are not done yet,as Shaikan's BIR will be announced,IMHO fairly soon!!
The SP is ridiculously undervalued as markets are never perfect!Many consider Kurdistan risky because of Shahristani and his cronies rhetorics!But all these oil companies,including Exxon has never bothered about what Shahristani says because he does not make the Law in Iraq and it is the Iraqi Parliament that makes the Oil and Gas Law.
The Oil and Gas Law will be passed,because Baghdad needs it more now, that no Majors will invest billions in secondary recovery projects in Southern Iraqi oil fields.
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golfguy31
14
Anyone currently not in GKP has to be reading all this info today and saying to themselves...."If I buy GKP shares at 8:00am on Monday morning, I am likely to double my money within a couple of weeks....maybe even x 4 if the offer for Shaikan comes in before December."
Massive news....Massive derisking of GKP assets / other majors will swoop in now.
imo, we have now had the door unlocked to the beginning of the official re rate of GKP shares.
Ps - DTL....I'm not even interested with the 222p technical target.....this news is too massive.
245p to 285p tomorrow imo...UNLESS we get another RNS that triggers even higher prices.
Our time has come....well done to all the holders.
=======================
Sun 15:05
Re: Exxon Our New Next Door Neighbour
PCI.L
20
Stokie,
Exxon have taken operatorship of the block north of Shakrock and South of Dinarta. They are the filling in a PCI sandwich lol!
Welcome neighbour.
Whilst I think consolidation will take place, I believe it would take some very aggressive bidding to dislodge some of the early entrants to Kurdistan. They have taken the political risk and that seems to be receding at a rapid rate. That is leading to rises in SPs and should improve the ability of a company like PCI to raise capital to fund the seismic and drilling.
If your major risk has been mitigated and there is the prospect of company making discoveries ahead then the management of PCI is unlikely to support any takeover offer. Would they accept say $250MM or about 7p/share for the Kurdistan interests at this stage, versus the $53MM paid recently in signature and capacity building bonuses? It might be tempting to take a fivefold return on your investment in the space of a few months (wouldn’t we all like that lol!) but I would hope they hold out until more value is created at least until the end of discovery and appraisal.
There is a range of possible outcomes for the 6 blocks. I believe the composition of the 6 blocks Exxon have been awarded will give a good indication of where the balance of power lay in the negotiations and that in turn would be influenced by their respective views of the risks of Exxon losing its current and future potential position in the south.
This is more Scaramouche’s business analyst territory but I have taken a shot lol! The attached link represents a possible range of outcomes.
[IMG]
http://i43.tinypic.com/152zw3b.png
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I agree the northern frontier blocks adjoining Iran will carry additional risk due to greater intensity of folding. The initial problem will be whether it is possible to obtain decent seismic over the anticlines. The surface rock is probably not going to be conducive to eliminating noise and if the geometry is also more complex then I suspect any award will not carry a well commitment in the first phase, just seismic. A well decision can then be made once it is determined whether the seismic can define the structure.
I agree Dohuk Central is the most likely block to be included in all outcomes. I would put money on them having got a piece of Dohuk but I am less sure about Shaikan. The KRG will see the case for holding out on the BIR until Sh-6 has proven fill to spill to maximise the price. Will Exxon have persuaded them to do otherwise? I guess we may find out in the next few days.
One thing that struck me about Exxon’s decision to go ahead is that it has the reputation of being the supermajor with the most focus on legal issues. They have a very hierarchical structure and legal has a big input in major decisions. They must feel the risk of losing the southern position is manageable from a legal standpoint. Dalemann's point this afternoon about "which law" (or TSC contract clause) enables Baghdad to terminate the southern TSC is very relevant.
The interesting thing will be to see how the IIs react to any offers that come in.
Meanwhile here is a selection of mid tier, majors and supermajors qualified to bid in the Iraq 4th licence round who will now be considering how to acquire acreage in Kurdistan.
BP
Chevron
CNOCC
CNPC
Gazprom
Japex
Lukoil
Mitsubishi
Occidental
ONGC
Petro Vietnam
PetroChina
Petronas
Premier
Shell
Total
Add to this KNOC, Marathon and Murphy who would probably like more acreage and not forgetting Sinopec this looks like the right mixture for some fierce competition for consolidation of existing positions and acquisition of the remaining acreage and BIRs.
Regards and GLA,
Gramacho
More View thread 6 Respond Vote up
Sun 11:28
Re: Exxons blocks
GKP.L
108
The KRG has announced blocks that Exxon will be the operator. Al Qush was the only block with operatorship available in the northern sweet spot. I agree that today’s news does not discount future award of BIRs in and around GKP blocks.
The next question is what operating interest has Exxon been awarded in each of these blocks? Is it 80% Exxon and 20% KRG and has the KRG retained any back in rights? This will give a better perspective on how much of an opportunity Exxon has captured and whether the KRG has left room for the participation of other majors/supermajors in the Exxon operated blocks.
It appears Exxon has decided that it needed to do something to change Baghdad’s policy regarding the exploration licence round. Let’s see... as a major oil company do you participate in the next Iraqi exploration licence round under TSC terms or join the scramble to obtain the last of the exploration acreage in Kurdistan under PSC terms. Exxon has shown you do the latter.
Baghdad is forced to rethink its approach to the next exploration round if it wants the participation of the supermajors and major oil companies. A bold and brilliant move by Exxon. They get acreage in Kurdistan and force a change in Baghdad’s exploration terms.
The KRG also appear to have played this brilliantly. Have they secured Exxon’s entry without having had to award them a piece of Dohuk Central and BIRs in GKP blocks? Time will tell where the balance of power lay in the negotiations.
Exxon’s first operational move is going to be very, very interesting. Will they drill Sh-8? Perhaps Exxon will find the oil water contact for us lol!
There is 2-D coverage of Shaikan’s extension into Al Qush and GKP were careful to get good coverage in the nth east of Al Qush.
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Exxon to Todd: “Eh can we buy a piece of your 3-D we would like to prove up our share of Shaikan ASAP?”
Todd: “Sure for $20MM and a 10% W.I. in Al Qush you can have it tomorrow!”
Great times,
Regards and GLA
Gramacho
=============================
O/T Taiji
PCI.L
3
Taiji
I have a similar, detailed note for BPC that I put together in the summer for a friend I am collaborating with. However I am not going to release it as it is about 3-4 months out of date and I got stick for the PCI note being 1 week out of date lol!
Suffice to say I think BPC has tremendous potential and eagerly await the 3D fast track interpretation given that the 2D was extremely encouraging and the CPR included surprisingly high COSs for that stage of prospect maturity.
I sold a few shares on the way down but retained a large majority and hope to repurchase some in 2012.
Good luck whatever your strategy.
=====================
Fri 20:45
Re: caution - maybe not!
PCI.L
19
osammyboy - there is no such thing as a certainty in exploration. However I am having difficulty in finding any dry exploration holes in the area around the PCI blocks in Kurdistan.
Of the 11 nearest structures to PCIs Dinarta and Shakrock Blocks 9 have been discoveries, 1 (Bekhme) is currently being tested and 1 (Shorish) is marked on SNMs map as a discovery but the operator OMV with 100% WI is being remarkably quiet about it. The Bekhme-1 well test results have not yet been released and we have to await confirmation that commercial hydrocarbons have been found but IMO a discovery is probable.
That would put the success rate at over 90% in this part of Kurdistan. This is quite simply, from a technical perspective, the best place to explore in the world right now.
Take a look at the SNM activity map:
http://www.shamaranpetroleum.com/i/pdf/Kurdistan_Oil_Gas_Activity.pdf
DINARTA BLOCK
To the South:
• Bekhme-1: Testing a possible discovery
• Akri-Bijeel: Discovery 2.4 Bn bbl OIP
• Sarta 1: Oil discovery, Reliance out to tender for 10,000 bbl/d EWT facilities
http://www.ril.com/downloads/pdf/eoi_2010_01_bidders.pdf
To the South West:
• Rovi Discovery: Classified by OMV as one of its two exploration successes in Kurdistan in 2010
To the West:
• Atrush: Oil Discovery
• Shaikan: Oil Field in Appraisal 10.5 Bn bbl OIP with every chance of another increase
To the North West:
• Swara Tika oil discovery 7000 bbl/d light oil from three zones, rate limited by equipment
SHAKROCK BLOCK
To the North:
• Bekhme-1: Testing a possible discovery
To the North West:
• Sarta 1: Oil discovery, Reliance out to tender for 10,000 bbl/d EWT facilities
To the West:
• Erbil Field
To the South West:
• Bina Bawi-3: OMV Oil discovery June 11(Bina Bawi-1 and 2 were drilled by a previous operator with indications there was no/minimal seismic. “Two earlier wells in the structure had failed to prove or disprove the presence of a hydrocarbon accumulation in this upper section,” Colin Higgins Advisor Well Operations OMV. Both wells believed to have suffered enormous fluid losses which OMV with the benefit of hindsight were able to better manage than the previous operator.)
• Shorish-1: OMV tested oil in the Cretaceous (ref Sterling Energy Presentation) though OMV does not include it alongside Rovi and Sarta in its list of successes
To the South:
• Taq Taq Field: "Taq Taq is probably a billion-barrel oil field.” Tony Hayward
PCI has highly prospective acreage in the best part of Kurdistan. The principal risks here are not technical but political and today saw yet another very significant step forward in that area. I would say the euphoria is more than justified.
2012/13 should be momentous for PCI as exploration proceeds in the Kurdistan acreage. They look to have played a blinder in securing this acreage.
Regards and GLA,
Gramacho
===================
14:24
Bloomberg - Devil is in the Details
occams
1
http://www.businessweek.com/news/2011-11-14/gulf-keystone-petroceltic-surge-on-kurdistan-iraq-agreement.html
Nov. 14 (Bloomberg) -- Gulf Keystone Petroleum Ltd. and Petroceltic International Plc led share gains among explorers operating in Kurdistan after the regional government was said to agree on drilling contracts with central Iraqi authorities.
Gulf Keystone climbed as much as 14 percent to 201.5 pence in London trading, the highest intraday price in nine months. Petroceltic rose as much as 13 percent, the highest in three.
Iraqi Prime Minister Nouri Kamil al-Maliki agreed to recognize drilling contracts signed by the semi-autonomous Kurdistan Regional Government, or KRG, after weeks of talks with Kurdish leader Barham Salih, two people with knowledge of the negotiations said last week. The accord followed an Exxon Mobil Corp. agreement to explore six blocks in the northern region.
“Until now Baghdad had refused to recognise the contracts that the KRG had signed with oil companies,” Phil Corbett, an analyst at Royal Bank of Scotland Group Plc, wrote in an e- mailed report. The “devil will be in the detail, particularly with respect to the treatment of cost recovery and profit share, but there doesn’t look like anything up front to suggest that the KRG has had to give significant ground.”
Gulf Keystone was up 9.25 pence at 186.5 pence by 12:32 p.m. in London. Petroceltic rose 0.8 pence to 8.3 pence and DNO International ASA advanced 0.28 krone to 8.36 kroner in Oslo.
--Editors: Tony Barrett, Will Kennedy
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
========================
Exclusive: ExxonMobil's blocks in the KRG
KRG Minister of Natural Resources Ashti Hawrami at the CWC Kurdistan oil and gas conference Nov. 13, 2011, where he confirmed the location of the blocks signed to ExxonMobil. (BEN LANDO/Iraq Oil Report)
By BEN LANDO AND BEN VAN HEUVELEN of Iraq Oil Report
Published November 13, 2011
Iraq Oil Report has obtained the exact location of the blocks Iraq's Kurdistan Regional Government has signed with Exxon Mobil.
They are:
* Al Qush: located immediately west of Shaikhan (Gulf Keystone Petroleum), northwest of Erbil city, and formerly assigned to Komet Group but withdrawn for lack of development.
* Baeshiqa: located immediately south of Ain Sifni (Hunt Oil), southeast of Al Qush.
* Pirmam: located immediately north of Mala Omar (OMV). The ancestral home and headquarte...
==============
Gulf Keystone, Petroceltic Surge on Kurdistan-Iraq Agreement
November 14, 2011
http://www.businessweek.com/news/2011-11-14/gulf-keystone-petroceltic-surge-on-kurdistan-iraq-agreement.html
Exxon’s Tillerson Follows Ex-BP CEO Hayward Into Kurdish Bonanza
Iraq Government Says Accord Made With Kurds on Oil Contracts
Emerging Stocks Rise on China Lending, Europe Debt Speculation
Afren Rises After Completing Nigerian Oil Asset Purchase
Syria Crackdown Prompts China-Russia Appeal to Prevent Violence
By Eduard Gismatullin
(Updates with analyst comment in fourth paragraph.)
Nov. 14 (Bloomberg) -- Gulf Keystone Petroleum Ltd. and Petroceltic International Plc led share gains among explorers operating in Kurdistan after the regional government was said to agree on drilling contracts with central Iraqi authorities.
Gulf Keystone climbed as much as 14 percent to 201.5 pence in London trading, the highest intraday price in nine months. Petroceltic rose as much as 13 percent, the highest in three.
Iraqi Prime Minister Nouri Kamil al-Maliki agreed to recognize drilling contracts signed by the semi-autonomous Kurdistan Regional Government, or KRG, after weeks of talks with Kurdish leader Barham Salih, two people with knowledge of the negotiations said last week. The accord followed an Exxon Mobil Corp. agreement to explore six blocks in the northern region.
“Until now Baghdad had refused to recognise the contracts that the KRG had signed with oil companies,” Phil Corbett, an analyst at Royal Bank of Scotland Group Plc, wrote in an e- mailed report. The “devil will be in the detail, particularly with respect to the treatment of cost recovery and profit share, but there doesn’t look like anything up front to suggest that the KRG has had to give significant ground.”
Gulf Keystone was up 9.25 pence at 186.5 pence by 12:32 p.m. in London. Petroceltic rose 0.8 pence to 8.3 pence and DNO International ASA advanced 0.28 krone to 8.36 kroner in Oslo.
--Editors: Tony Barrett, Will Kennedy
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
====================
Maliki to IOCs: us or them
Kurdistan Regional Government Prime Minister Barham Salih gives a keynote speech at the first CWC Kurdistan oil and gas conference in Erbil, Nov. 13, 2011. (BEN LANDO/Iraq Oil Report)
By BEN VAN HEUVELEN AND BEN LANDO of Iraq Oil Report
Published November 14, 2011
Iraq's central government indicated Sunday it will make an example of ExxonMobil by punishing the company for signing deals with the semi-autonomous Kurdistan region.
Prime Minister Nouri al-Maliki's spokesman in Baghdad, Ali Musawi, accused ExxonMobil of violating Iraqi law and breaching its West Qurna 1 contract when the company signed production sharing contracts (PSCs) with the Kurdistan Regional Government (KRG).
The prime minister's position is consistent with statements already iss...
==============
Iraq Government Says Accord Made With Kurds on Oil Contracts
November 14, 2011, 9:04 AM EST
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Iraq Hasn’t Agreed to Recognize Kurdish Oil-Drilling Contracts
By Joe Carroll, Nayla Razzouk and Kadhim Ajrash
(Updates with Kurdish relationship to central government in 10th-11th paragraphs.)
Nov. 12 (Bloomberg) -- Iraq, home to the world’s fourth- largest oil reserves, has reached a tentative agreement on crude exploration and revenue with the semi-autonomous Kurdish region, according to an adviser to Prime Minister Nouri Kamil al-Maliki.
The central government and the Kurdish Regional Government have reached “mutually acceptable” solutions to long-standing disputes over oil, territory and Kurdish armed forces, Adal Barwari, al-Maliki’s adviser on Kurdish affairs, said in a Radio Free Europe/Radio Liberty interview published today on the U.S.- government funded news outlet’s website.
Barwari said in the interview that al-Maliki and Kurdish Prime Minister Barham Salih held talks in Baghdad in late October and appointed a trio of committees to hammer out their differences. Those committees completed their final reports on Nov. 5 and submitted them to al-Maliki and Salih, Barwari was cited as saying in the interview.
Barwari told Radio Free Europe/Radio Liberty that he didn’t know the details of the agreements because the committee recommendations had been submitted only to the prime ministers, according to the report.
Comments Conflict
Barwari’s comments conflict with central government denials of any deal over the past two days after Exxon Mobil Corp. signed contracts with the Kurdish authority to drill for crude on six blocks in the northern part of the country.
“The Iraqi government will treat any company breaching its laws in the same way it has treated similar companies in the past,” the media office of Hussain al-Shahristani, the country’s deputy prime minister for energy affairs, said today in an e-mailed statement. “The ministry of oil has informed Exxon Mobil of this position.”
Alan Jeffers, a spokesman for Irving, Texas-based Exxon, declined to comment. The Baghdad-based central government and Kurdish authorities have clashed over how to oversee drilling and allocate revenue from the Persian Gulf nation’s crude reserves since the fall of Saddam Hussein in 2003. Relations reached a low point in 2009 when oil exports were temporarily suspended.
Accord, Committee
The accord will be approved by the Iraqi parliament’s Oil and Energy Committee as soon as it’s received, committee member Bahaa al-Din Ahmad was cited as saying in the Radio Free Europe/Radio Liberty article.
The agreement “neither undermined the powers of the central government nor undercut the rights of” the Kurdish authority, Ahmad said, according to the article.
Kurdistan includes three regions in the country’s north: Erbil, Dohuk and Suleimaniah, governed by an elected parliament and 19 government ministries overseeing everything from agriculture to education to tourism, according to the regional authority’s website.
The central government counts the Kurdistan Regional Authority as one of its 19 administrative divisions, according to the U.S. Central Intelligence Agency’s website.
The accord has ended the risk that foreign oil producers such as Exxon, Marathon Oil Corp. and Gulf Keystone Petroleum Ltd. would be stripped of some oilfield projects as punishment for signing contracts in the Kurdish-controlled region, two people familiar with the talks told Bloomberg News yesterday.
Exxon, the world’s biggest company by market value, is the latest Western entrant into Kurdistan. Others include Vallares Plc, the explorer founded by former BP Plc Chief Executive Officer Tony Hayward, Afren Plc, Hess Corp., Murphy Oil Corp., Marathon Oil Corp. and Repsol YPF SA.
Iraq’s 115 billion barrels in estimated crude reserves are exceeded only by those of Saudi Arabia, Venezuela and Iran, according to BP’s annual statistical review of global energy. Canada’s oil sands are counted as a different category from so- called conventional resources in the BP statistics.
--With assistance from Glen Carey in Dubai, Mourad Haroutunian in Riyadh and Catherine Airlie in London. Editors: Rob Verdonck, Alastair Reed.
To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net; Nayla Razzouk in Amman at nrazzouk2@bloomberg.net; Kadhim Ajrash in Baghdad at kajrash@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
========================
Author chief66 View Profile Add to favourites Ignore
Date posted today 14:41
Subject Has the tsunami settled
Votes for this Posting Voted 28 times.
Message
As the SP settles at around 182p most familiar to GKP may wonder if that was it, is this the best we could have hoped for, and those that did will have sold this morning. Others i'm sure will have realised a monumental shift in the landscape due to events over the weekend.
What Exxon has brought to the table is a position of no return - a position where:
1.The iraqi government cannot return to publicly declare blacklisting (note, maliki nor shahristani have themselves come out and said the same rhetoric we are used to.
2. The iraqi govt cannot return to continue to delay an oil and gas law.
3. Kurdinstan cannot be ignored by the investing world by the largest players
By the virtue of the Exxon deal all three points have changed in the level of risk associated with them.
Key triggers for big rises in the SP is not an ops update, although that will help are:
1.Genel Energy trading 21st Nov.
2.Lack of official announcement denouncing the Exxon deal
3.Other IOC to follow suit (most likely if no.2 materialise this week, cheveron may make a move, cant see KNOC or Chinese NOC to move until iraqi govt approve such a move.
4.Excalibur settlement
Those that were nervy before are now accumulating, landscape has changed, risk has changed, Broker reports are probably written just waiting to see official govt reaction - if no negative reaction then its BOOM BOOM time.
GLA to patient investors, just sit back and hold off the sell button until Dec atleast.
======
16:22
Chevron Looking for Kurdistan Oil Deal D...
seakelp
16
http://www.trefis.com/stock/cvx/articles/85195/chevron-looking-for-kurdistan-oil-deal-despite-iraqs-objections/2011-11-14#footnote_0_85195
Oil major Chevron (NYSE:CVX) is said to be in talks with the Kurdish government to being exploration activity in the semi autonomous region of Iraq. [1] Kurdistan Regional Government (KRG)’s natural resources minister Ashti Awrami revealed that his government was in talks with 3 major oil companies to begin exploration in the region which is said to hold 45 billion barrels of oil and 100 – 200 Trillion cubic feet of natural gas. The minister revealed earlier that Exxon Mobil (NYSE:XOM) will be exploring six areas in the region at the risk of frustrating the Iraqi government. Oil company executives and analysts suspect that Chevron and Italian major Eni may be the other two firms in talks with the KRG.
The revelation from KRG prompted a strong response from the Iraqi government which questioned the legality of such contracts in the past. Deputy prime minister Hussain al-Sharistani has hinted that the Iraqi government may force Exxon to choose between its plans in Kurdistan and its expansion of the West Qurna super giant field. [1] Firms have been banned from operating in other regions of Iraq for exploring deals with Kurdistan in the past. However with large players such as Exxon and Chevron trying to enter both regions, analysts expect the governments to compromise over the long run.
Click here for our full analysis of Chevron.
Output from Kurdistan is expected to jump from the present levels of 100,000 barrels/ day (b/d) to 175,000 b/d in 2012.
Exploration is also expected to pick up in the U.S. Gulf of Mexico where the Department of Interior will hold the sale of oil and gas leases to boost production in the region. [2] Chevron has drilled 3 wells in the GoM region this year and plans to drill more in the near future to boost domestic output.
========================
http://www.ft.com/cms/s/0/4565d858-0e1a-11e1-91e5-00144feabdc0.html#axzz1dhLT2NAd
Kurdistan is in talks with at least two other major international oil companies after signing a landmark deal with ExxonMobil that has inflamed the political climate between the semi-autonomous region and Iraq’s federal government.
The revelation by Ashti Awrami, the natural resources minister of the Kurdistan Regional Government (KRG) came as he confirmed that Exxon had agreed a landmark contract to explore six areas in the region, sparking a furious backlash in Baghdad which has considered the move illegal.
More
ON THIS STORY
Exxon signs Kurd exploration contracts
Syria stops payments to Shell and Total
Keystone decision pushed beyond election
UK mission seeks to benefit from Iraq oil boom
Kurdistan oil hopes rise with new ventures
“We have during the past few months been talking to at least three significant companies,” Mr Awrami told the Financial Times in an interview in Erbil.
“We have space for one to three international oil companies to come to us,” he added, declining to name the other two. Oil industry executives have speculated that Chevron from the US and ENI from Italy have been looking at the region which has been described as one of the last great hydrocarbon frontiers in the world. It is estimated to hold 45bn barrels of oil – about the same as Libya – and large amounts of gas.
If the KRG is able to attract another international major it could intensify the pressure on the federal government to allow the contracts. Baghdad has in the past banned companies that have ventured into Kurdistan from operating in the oil-rich southern region of the country where Exxon is already developing the giant West Qurna field.
Hussain al-Sharistani, the Iraqi deputy prime minister in charge of oil affairs, suggested at the weekend that Exxon would have to choose between Kurdistan and West Qurna.
“The Iraqi government will deal with any company that breaks its laws in the same way that it has dealt with similar companies in the past,” he said in a statement in reference to the ban.
Officials in Erbil, however, played down the rhetoric. Barham Salih, the prime minister of the KRG, urged “dissenting voices” in Baghdad that it was time to “move on”.
Oil executives are watching the spat closely because of its influence on other companies venturing into Kurdistan, even as they predicted Exxon’s move would spark consolidation.
Tony Hayward, the former chief executive of BP who has emerged at the head of Genel Energy, a Kurdistan-focused player, sounded an optimistic note about Exxon’s entry, saying that he suspected it would “ultimately ... hasten progress towards compromise” between the two governments who had yet to agree on a long-awaited oil and gas law.
Mr Awrami defended the legality of the contracts the KRG has signed, adding that the protests were “the same standard reaction” he had expected.
“We are a federal state, we adhere to the constitution,” he added.
He revealed that Exxon had approached the KRG in late May or early June and that negotiations moved relatively quickly. Both parties signed the deal on 18 October. Among the exploration areas is “a prize block” about 50km north of Erbil by the town of Salahadin.
Mr Awrami said Kurdistan would be exporting 175,000 barrels a day in 2012 from a current level of 100,000 barrels per day.
“It reminds me of the early days of the North Sea,” he said, in a reference to the way in which it was eventually developed through consolidation.
===============================
15:57
GKP The biggest gap up ever in
Nimomastik
7
...trading history...
That will probably be the headline we read one morning this week/month/year *
*Hindsight Traders - Please delete as applicable.
GKP - Is about to make trading history IMHO with one of the biggest ever gap up (and i mean ever) in whole the history of stocks and shares trading.
Why
1. This is an exception amount of oil by all measuring incidents, most PIs here can't even work out how much we are worth and the experts certainly can't agree, £10/£20/£40 current OIP.
2. Very large sums of money are currently invested in other FTSE 350 oilies and these investments are doing okay and may continue to do okay. Most of them however have 2 x very big problems.
a) High extraction costs and overhead in general
and
b) VERY little frickin oil especially when you consider how overpriced the shares are in comparison to GKPs.
So this is how it will play out IM-Guessed-O
1. Suddenly the penny will drop that GKP is going to blast up.
2. Suddenly the worlds NON - Iraqi oil companies will realise either how over valued they are or how undervalued GKP is. There simply has to be a massive SP re-rating.
3. People will sell other shares and money will pile into GKP.
I see GKP at £10 - £13 this year.
Even Joe blogs on the street knows that when 13 billion barrels of oil starts selling GKPs true worth will be know.
Tell your friends.............................. NEVER risk more than they can afford to lose. Its still a high risk game no matter how much oil GKP may have.
GL - DYOR
================
ExxonMobil stirs the pot by signing deal with Iraqi Kurdistan
Robin Mills
http://www.thenational.ae/thenationalconversation/industry-insights/energy/exxonmobil-stirs-the-pot-by-signing-deal-with-iraqi-kurdistan
Nov 15, 2011
ExxonMobil has never been one to be scared of governments.
It famously took Venezuela to arbitration rather than negotiate over nationalisation of its assets. It hung on to licences in Russia and Indonesia for so long without activity that the governments took them over.
But now, in the Kurdish region of Iraq, the oil company may have stirred up one of its most momentous tussles.
Last weekend, the Kurdistan Regional Government (KRG) confirmed it had signed contracts with the US giant to explore six blocks. This marks an important shift in the relationship between the Kurdish region and the central government in Baghdad.
The blocks themselves are contentious enough. Two of them, Baeshiqa and Qara-Hanjeer, at least partly overlap the Green Line (or the 140 line after the relevant article in the Iraqi constitution) that was the ceasefire line reached in 1991 after the First Gulf War.
Baeshiqa and Qara-Hanjeer are near the flashpoint cities of Mosul and Kirkuk respectively.
A third block, around the important Penjwin border crossing, lies along the Iranian frontier, which has seen recent attacks by Iran against PKK Kurdish guerrillas.
Kurdish armed forces crossed the Green Line during the 2003 US invasion. Parts of Nineveh, Kirkuk, Salahuddin and Diyala provinces are claimed as historically Kurdish, although many Kurds were driven out during Saddam Hussein's brutal campaign against them in 1988, and by his policies of displacement aimed at securing control over oil-rich areas.
ExxonMobil is not the first company to be awarded blocks in the disputed area, but it is by far the most prominent. Article 140 is intended to lay out steps for resolving the status of these areas, but the issue has so far proved too thorny.
The wider significance of the ExxonMobil deal, however, lies in its impact on the relationship between Erbil, capital of the Kurdish region, and Baghdad.
The central government, and in particular the formidable deputy prime minister (and former oil minister) Hussain Al Shahristani, have resolutely maintained that the oil exploration contracts signed by the KRG are illegal.
The central government has maintained that it should approve all deals, and that they should follow its "technical services" model. A comprehensive national hydrocarbon law has been in discussion since 2007, but has still not been passed.
With some short-lived exceptions, Baghdad has refused to allow companies to export oil from Iraqi Kurdistan, or to be paid their share of costs and profit. Companies operating in the Kurdish region have been blacklisted from work in the south, as befell the US oil company Hess recently, although it had already qualified to bid under Baghdad's rules.
But ExxonMobil has played the game in reverse. It is already the operator of the massive West Qurna-1 project in southern Iraq, which with reserves of 8.5 billion barrels is Iraq's second-largest field.
The widespread supposition has been that ExxonMobil had reached agreement with Baghdad. But it is notable that it is the only one of the largest oil majors to have taken the plunge in Kurdistan, although three of its blocks were reportedly first offered to a rival. ExxonMobil toured Baghdad before Eid, seeking approval, but Dr Shahristani denied on Saturday that any deal had been reached.
In the fractious world of Iraqi politics, different parts of the government may have different views. Nouri Al Maliki, the prime minister, is dependent on Kurdish votes to stay in power, but the Kurds are increasingly frustrated with failure to conclude the hydrocarbon law.
The Kurds may be using ExxonMobil, usually strongly backed by the US government, to send a signal to Mr Al Maliki that he is not indispensable.
This presents Baghdad with a difficult dilemma. It could set an example by expelling ExxonMobil from West Qurna-1, and appointing another company. But that risks delays to its ambitious production targets, even if it passed the project to Shell, which is already a minority partner in West Qurna-1.
However, if it does not act, any other large company present in southern Iraq will effectively have a green light to enter the Kurdish region.
Given that ExxonMobil has snapped up the most attractive remaining blocks, that would probably mean acquisitions of smaller players.
What is clear is that this deal greatly strengthens the KRG's hand.
Resolution of its disputed borders now has to take into account the interests of politically well-connected oil companies.
Following the adventurous wildcatters who entered after 2003 have come strong, credible investors, attracted by Kurdistan's possible 45 billion barrels of oil. This, with a resolution to the hydrocarbon law, offers Erbil the resources to continue its economic growth and keep its autonomy intact.
=========================================================
KRG Confirms ExxonMobil Contract at Erbil Oil and Gas Conference
15 NOVEMBER 2011 11:22 CET
http://scrollpost.com/blog/2011/11/15/krg-confirms-exxonmobil-contract-at
Erbil, Kurdistan Region – Iraq (KRG.org) – The Kurdistan-Iraq Oil and Gas Conference in Erbil heard confirmation that the Kurdistan Regional Government has signed an oil exploration contract with ExxonMobil,
=================
11:59
Shell's $17bn Iraq deal 'approved'
SpikeyDT
Shell's $17bn Iraq deal 'approved'
http://www.upstreamonline.com/live/article289070.ece
The Iraqi cabinet has reportedly given its approval for the massive Iraq South Gas deal for Shell and Mitsubishi to develop three giant gas fields.
Bill Lehane and news reports 15 November 2011 11:57 GMT
A government spokesman told Reuters the cabinet had given the go-head on Tuesday.
The country's oil minister, Abdul Kareem Luaiby, had predicted in mid-October the agreement would be approved within weeks.
The deal was sent to cabinet for final approval in September after it was backed by an Iraqi energy committee chaired by Deputy Prime Minister for Energy Affairs Hussein Shahristani.
In July, the oil ministry initialed agreements for the massive deal, which will allow Shell to capture and process gas from three giant southern oil fields - Rumaila, West Qurna 1 and Zubair.
The 25-year venture calls for an investment of $17.2 billion to create the Basra Gas Company, in which Baghdad will have a 51% stake to Shell’s 44% and Mitsubishi’s 5%.
Some $12.8 billion would be spent on infrastructure and $4.4 billion on construction of a liquefied natural gas facility, according to a document distributed by the Iraqi parliament.
Under the agreement, the company must first meet local demand but can export any gas not used by Iraq's fuel-starved power plants. The planned LNG terminal would handle the export of 600 million cubic feet a day.
"We are committed to supply the venture with 1.6 billion cubic feet a day from the fields", Luaiby previously said.
The joint venture would sell processed gas to Iraq's state-owned South Gas Company.
An Iraqi oil expert previously told Dow Jones that Iraq stood to make nearly $100 billion from the venture because the gas would substitute for the oil currently used to fuel Iraq's power stations.
Iraq would tax Shell and Mitsubishi profits at 35%, the expert said,adding that Shell and Japan's Mitsubishi will make a 7% profit on the whole venture.
Iraq has natural-gas reserves totaling 112.6 trillion cubic feet, the 10th largest in the world. But it produces only around 1 billion cubic feet a day, some 700 million cubic feet of which is being flared because of a lack of infrastructure.
Published: 15 November 2011 11:57 GMT | Last updated: 1 minute ago
================
Ashti Hawrami, the Kurdish minister of natural resources, in his office. (BEN LANDO/Iraq Oil Report)
By BEN LANDO of Iraq Oil Report
Published November 15, 2011
The Kurdistan Regional Government (KRG) made international headlines late last week when it confirmed ExxonMobil signed production sharing contracts for six exploration blocks, marking the first foray of a super-major into Iraq's semi-autonomous northern region.
Ashti Hawrami, the KRG's Minister of Natural Resources since 2006, says he's looking beyond that. He's in constant talks with Exxon's colleagues for the few remaining unsigned blocks. And he's keen on seeing bigger companies come into...
===============
uy Time's running out for Maliki.
woooody
19
BBBS, thank you for your post this morning. An excellent summary of why Shari and Maliki simply cannot afford to prolong their charade for too much longer. Kurdistan has always conducted itself with decorum and diplomacy in the face of self-interested, shabby politicking from their ‘colleagues’ in the South. If Kurdistan were an entirely independent nation then they’d be an awful lot richer and we’d no doubt be upwards of £5 a share.
However, Kurdistan is not independent, yet.
We’re all aware that Maliki’s position is entirely due to the Kurds stepping in to give him the required majority. We’re also aware of the deadline for ratification of the Oil & Gas Law by the end of 2011. The heat is now firmly on Maliki to end this debacle and, in doing so, retain his premiership (No 1 priority!); avoid the potential for full Kurdistan independence; and to give the Iraqi people the standard of living commensurate with the staggering wealth of their nation.
We’re frustrated, the Iraqis are frustrated, and now the World’s largest oil company has shown that it too has had enough of the posturing from Baghdad.
Tick tock.
==================
Rising criticism of Shahristani's positi...
seakelp
22
http://www.aknews.com/en/aknews/2/272624/?utm_source=twitterfeed&utm_medium=twitter
Rising criticism of Shahristani's position in Exxon Mobile dispute
15/11/2011 15:06
Baghdad, Nov.15 (AKnews) - Deputy Prime Minister for Energy Hussain al-Shahristani gets hammered from all sites for his position on oil giant Exxon Mobil's oil contract with Kurdistan Region to explore six fields in the region for oil exploration.
After criticism from Kurdish politicians yesterday, also Aref Tayfur, deputy speaker of the Council of Representatives, and Uday Awwad, member of the Council's Oil and Energy Committee, bashed Shahristani.
"The country is witnessing hard times with the close withdrawal of U.S. military and the Iraqi people shouldn't endure more crises and problems caused by incompetent officials in the Iraqi government, such as Shahristani," Tayfur said.
After Kurdish Minister of Natural Resources Ashti Hawrami said on Sunday that the Kurdistan Region signed a contract with Exxon Mobil, Shahristani gave Exxon Mobil the choice either to work in the West Qurna field or the fields of Kurdistan, thus threatening to cancel existing contracts with the U.S. supermajor.
It is unclear, if the Iraqi government is really willing to do that. Samuel Ciszuk, an oil analyst at IHS Global Insight quoted in the London Independent, said,"Exxon is developing one of the biggest oil projects in the south and is the lead on a huge water injection system that will be used by oil companies all across the region. To kick Exxon out would be a very powerful statement because it would effectively derail most of its production boosting program for a good year or two."
Although Shahristani is not Iraq's oil minister -- that is Abd al-Karim Luaybi -- he seems to have control over the country's oil policy. The Council's Energy Committee has been repeatedly criticizing that.
Today, Committee member Awwad said that the Oil Ministry's position is a violation on the agreements between the Kurdistan region and the federal government. He personally blamed Shahristani for that. "Shahristani is putting pressure on the Oil Ministry," Awwad said.
Tayfur voiced his concern that the conflict could ultimately hurt the country and its citizens. He urged Shahristani to ensure the development of suitable solutions of the electricity and oil shortage, now that the winter is about to begin.
Meanwhile, Shahristani and officials from the Oil Ministry confirmed their position. Abdul Mahdi al-Amidi, head of the Contracts and Licensing Department at the Oil Ministry, said during an interview with Radio Free Iraq that the contracts between Exxon Mobile and the Kurdistan Region violate the laws and regulations in Iraq.
Shahristani's office issued a statement, in which he repeated his threat to "re-consider" current contracts with the company in other parts of the country.
There have been tensions between the Kurdistan Regional Government and the federal authorities about the oil policy for a long time. They recently increased after the KRG rejected a draft Oil and Gas Law approved by the Iraqi government in August. The region believes the draft law gives too much power to the Federal Government to manage the oil wealth and would be at the expense of the region.
In the past Baghdad has prevented companies operating in the Kurdistan Region from participating in licensing rounds to develop Iraqi oil fields. Other supergiant oil companies working in southern Iraq, like BP and Royal Dutch Shell, have held off from moving into Kurdistan Region for fear of antagonizing the Iraqi government.
Reported by Raman Brosk
========================================
off to the shops
GRH1
57
Well...it is that time of year...
so I am being dragged out by my beautiful Wife...shopping...
I know it's not a man's thing ...
but she has put up with me spending 'a few' hours reading all there is to read on GKP ...
so it is a small trade-off
I thought you would all like to know that
oh...BTW...I have previously posted to the effect that NO super-major
can possibly afford NOT to bid for at least Shaikan...
it is TOO damaging to the losers...
the competitive bar would be raised very high...in one stroke
(The perpetualoptimist posted a terrific post a while ago
in which he looked at the % effect upon the reserves of several named companies were they to buy Shaikan...
may I suggest please that such post be re-posted...he was SPOT on in my view)
so...draw your own conclusions...
but my view is as ever very simple...
all the while you are talking to each other on these BBs...
and all the while I am smiling gamely whilst being dragged around the shops...
there IS a parallel 'universe'...
and it is in Erbil...
it is right now...
and it does involve the mother of all bun fights for the riches of AT LEAST Shaikan
just because news does not appear on OUR timetables...it does not mean that ,shall we say, 'quite major' evenst are not unfolding ....RIGHT NOW
Think on this...
very few of us have any idea what the end game will look like...
and thus it is hard to spot it...
but again...IMO...it is happening now...but of course NOT before ouyr eyes
I forgot to mention...my grand daughter will be at the shops too...
those girls of mine do know how to tempt me away from the screens
Best of luck to all genuine holders
Regards
GRH 1
==============
Like to see the contract with Exxon. Can't believe they have signed up to a clause agreeing no contracts with Kurdistan. Should be an interesting court case, if it gets that far before the Iraqi public decide they have had enough waiting. Independant Kurdistan looming!<<<<< The Constitution guarantees the right of regions to contract for oil licences. From a Kurd standpoint, therefore, and in the absence of an oil law framework, any such clause would be deemed unconstitutional and open to challenge. From Exxon’s standpoint, of course, it’s a no-brainer. =============== Re: ExxonMobil - Reuters GottaLottie TT2 - win, win for Exxon, sue Baghdad for compensation but not to perform the contract and get to invest in more profitable PSCs in Kurdistan. Not so great for the Southern Iraqi people but imho, infrastructure problems could have hampered Exxon's future performance of the West Qurna contract anyway. ========= "Exxon", think "US Govt". They are practically the same thing. Exxon wont have made this decision without being part of a wider strategic move by US government.. SoM =========== Seems obvious to me Bagdad are holding on by their finger tips. Their contracts are less attractive than KRG and their treatment of multi nationals is appalling. Exxon will be the first of several to move north and with those pipeines to Turkey the writings on the wall C'mon Chevron Shell BP ================ ghostriderinthesky Like to see the contract with Exxon. Can't believe they have signed up to a clause agreeing no contracts with Kurdistan. Should be an interesting court case, if it gets that far before the Iraqi public decide they have had enough waiting. Independant Kurdistan looming! ================ ghostriderinthesky Like to see the contract with Exxon. Can't believe they have signed up to a clause agreeing no contracts with Kurdistan. Should be an interesting court case, if it gets that far before the Iraqi public decide they have had enough waiting. Independant Kurdistan looming! ============== And do you think Shell and BP are going to just sit there with handcuffs put on them by Maliki and Sha - for service contracts paying $2 p/b ... contracts that could be rescinded on a whim and with no recourse to any law - and watch Exxon, Chevron, Conoco, Sinopec, KNOC acquire all the oil in Kurdistan? I don't even think they can afford to wait around to see what happens now. If I was them, I'd be thinking about following Exxon pretty sharpish. There won't be anything left. ================ By Kadhim Ajrash and Nayla Razzouk Nov. 16 (Bloomberg) -- Iraq is taking steps to cancel an agreement with Exxon Mobil Corp. after the company breached regulations barring it from working in the country’s semi- autonomous Kurdish region, an Oil Ministry official said.
“Exxon Mobil violated the contract and the regulations of
the Oil Ministry which prevent it from working with the
Kurdistan province,” Abdul-Mahdy al-Ameedi, the head of the
ministry’s licensing department, told reporters today in
Baghdad. “The ministry has to end the contract and is now
undertaking measures toward that.”
Exxon, the world’s biggest company by market value,
recently signed contracts with the Kurdistan Regional Government
to explore six areas, or blocks, in KRG-controlled northern
Iraq, Michael Howard, an adviser to the regional authority, said
Nov. 11. A dispute between Baghdad and the Kurdish government
over oil contracts led to a temporary suspension of crude
exports from Kurdish fields in 2009.
Exxon, with its partners Royal Dutch Shell Plc and Iraq’s
Oil Exploration Co., boosted production last month from the West
Qurna oil field in southern Iraq to 370,000 barrels a day from
about 250,000 barrels a year earlier. The companies are
injecting water into the field to flush more crude to the
surface, under the terms of a 20-year development deal signed in
January 2010.
=============
| Author | SpikeyDT View Profile Add to favourites Ignore |
|---|---|
| Date posted | today 17:08 |
| Subject | Oil Contracts and Revenues |
| Votes for this Posting | |
| Message | |
http://www.iraq-businessnews.com/2011/11/17/new-deals-and-a-better-future-for-iraq/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=DTN+Iraq:
Posted on 17 November 2011.
New Deals and a Better Future for Iraq
The past week has seen two of the biggest oil stories in recent times in Iraq — the approval by the Iraqi cabinet of the $17 billion project with Shell and Mitsubishi to capture gas from Iraq’s main southern oilfields, and the confirmation that the KRG has signed an exploration agreement with the giant ExxonMobil.
The Shell contract has been very broadly welcomed, and it brings us closer to the day when Iraqi homes and businesses will have a reliable supply of electricity, powered by the gas that is currently flared off into the atmosphere.
Exxon’s project, on the other hand, is more politically sensitive, and the full implications of it remain to seen.
But it is very clear that significant deals such as these in the energy sector will be required to push Iraq forward towards greater prosperity and stability. And as the UK’s Ambassador Michael Aron said this week:
“A combination of stability, economic development and the creation of a competitive private sector offer huge opportunities for international and Iraqi business. And it puts Iraq right back at the centre of the global economy it left 20 years ago …
“Ultimately, business will go where conditions are best.“
Few would argue with that.
Posted on 17 November 2011.
New Deals and a Better Future for Iraq
The past week has seen two of the biggest oil stories in recent times in Iraq — the approval by the Iraqi cabinet of the $17 billion project with Shell and Mitsubishi to capture gas from Iraq’s main southern oilfields, and the confirmation that the KRG has signed an exploration agreement with the giant ExxonMobil.
The Shell contract has been very broadly welcomed, and it brings us closer to the day when Iraqi homes and businesses will have a reliable supply of electricity, powered by the gas that is currently flared off into the atmosphere.
Exxon’s project, on the other hand, is more politically sensitive, and the full implications of it remain to seen.
But it is very clear that significant deals such as these in the energy sector will be required to push Iraq forward towards greater prosperity and stability. And as the UK’s Ambassador Michael Aron said this week:
“A combination of stability, economic development and the creation of a competitive private sector offer huge opportunities for international and Iraqi business. And it puts Iraq right back at the centre of the global economy it left 20 years ago …
“Ultimately, business will go where conditions are best.“
Few would argue with that.
==============
BBC iPlayer - The World Tonight: 16/11/2011
And we'll hear a special report from Iraq, with Gabriel Gatehouse and Charlotte Ashton. ... Who got those oil contracts? On The World Tonight, with David Eades. Broadcast on BBC Radio 4, 10:00PM Wed, 16 Nov 2011
And we'll hear a special report from Iraq, with Gabriel Gatehouse and Charlotte Ashton. ... Who got those oil contracts? On The World Tonight, with David Eades. Broadcast on BBC Radio 4, 10:00PM Wed, 16 Nov 2011
==================
Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/87b4dbe8-107f-11e1-8010-00144feabdc0.html#ixzz1dznIMVLb
Royal Dutch Shell has pulled out of oil-development talks with the Kurdistan regional government in an effort to protect lucrative investments in southern Iraq, including a potential $17bn natural gas deal..........
Royal Dutch Shell has pulled out of oil-development talks with the Kurdistan regional government in an effort to protect lucrative investments in southern Iraq, including a potential $17bn natural gas deal..........
=================================================
| Author | scaramouche View Profile Add to favourites Ignore |
|---|---|
| Date posted | Sunday 08:47 |
| Subject | Balancing the EXXON Risks... |
| Votes for this Posting | Voted  72 times. |
| Message | |
====================
Exxon confirms Kurdistan deals
Iraqi workers walk in West Qurna oilfield in Iraq's southern province of Basra November 28, 2010. (ATEF HASSAN/Reuters)
Iraqi workers walk in West Qurna oilfield in Iraq's southern province of Basra November 28, 2010. (ATEF HASSAN/Reuters)
By Ben Van Heuvelen of Iraq Oil Report
Published February 25, 2012
ExxonMobil has publicly acknowledged its activities in Kurdistan for the first time, though it stopped short of confirming that any contracts have been finalized, testing the U.S. legal reporting requirements meant to protect shareholders.
Ever since Oct. 18, 2011, when the company signed six production sharing contracts with the Kurdistan Regional Government (KRG), Exxon has declined to discuss or even confirm the existence of the deals. That silence was broken late Friday afternoon, in a sh...
===
Why the U.S. should reverse course on Iraq
By Danielle Pletka and and Gary Schmitt, Published: February 24
Danielle Pletka is the vice president for foreign and defense policy studies at the American Enterprise Institute. Gary Schmitt is a resident scholar at AEI.
this month, Obama administration officials revealed plans to dramatically reduce embassy staff in Baghdad, the largest U.S. diplomatic mission abroad. Along with the announcement in December of the withdrawal of all U.S. troops from Iraq — the message President Obama is sending is clear: The sooner we put Iraq in the rearview mirror, the better.
But this is a mistake. Far from distancing ourselves from Iraq, we should draw it, and its Shiite prime minister, closer still. Iraq could be the linchpin of a new U.S. strategy for the Middle East at a time when one is desperately needed.
1
A year ago, it appeared that the United States was committed to Iraq for the long term, with a small but necessary troop presence and an overwhelming diplomatic one. But American ambivalence and Iraqi politics got in the way of maintaining a U.S. military footprint. Not to worry, senior administration officials said; troops in camouflage would be replaced by “troops” in pinstripes. But the commitment was little more than rhetorical; after the military exited, U.S. officials quickly decided that Iraq was too unstable for a full, continuing engagement with its government.
Unfortunately, the administration has mistaken cause and effect. Although ethnic and religious differences undoubtedly make working with Iraqis difficult, it was the U.S. vote of no confidence in Iraq’s future that helped precipitate renewed sectarian violence, breathed life into al-Qaeda in Iraq, empowered Tehran to stir the Iraqi political pot and gave vent to Prime Minister Nouri al-Maliki’s worst instincts. He feels insecure — rightly so — and is casting about for patrons in a neighborhood where any will exact a heavy price.
Washington has lost a valuable opportunity to nurture and support a key counterweight to Iranian influence among Shiites in the Arab world.
Great hopes were once vested in Grand Ayatollah Ali Sistani, the senior-most cleric in Shiite Islam and leader of its most influential seminary, in Najaf, Iraq. Sistani is everything that the leaders of the Iranian regime are not: sage, venerated and opposed to the doctrine — “velayat e-faqih,” or the jurisprudence of the clerics — that underpins Iran’s theocratic system.
Faced with this challenge, Tehran has taken great pains to constrain Sistani and his “quietist” Shiite tradition — aggressively promoting its own, more politicized seminaries, subsidizing education for Shiite clerics throughout the Persian Gulf region and attempting to install Ayatollah Mahmoud Hashemi Shahroudi, a former Iranian judiciary chief, in Najaf as a counterweight to Sistani.
If Iran succeeds in sidelining Sistani, any chance of Iraq assuming the mantle of leader of the Arab Shiites and providing a model distinct from the Iranian/Hezbollah recipe of extremism and violence will be lost.
Yet, because Iraq’s Shiites have historically rejected both Iranian leadership and Iranian models of governance, there remains the possibility of an alternative Shiite vision. That vision, and Sistani’s influence in shaping it, ultimately depends on the success of Iraq itself.
Washington can reclaim the partnership with Maliki and once again set Iraq on the path to a stable future. How? First, the president must rethink his decision to drastically downsize the U.S. Embassy. It’s easy to understand his decision, as many are hard-put to imagine how thousands of diplomats, contractors, aid managers, security officers and spooks can manage in a complex and increasingly turbulent political situation in Baghdad.
Ideally, they could do so if Obama were willing to reverse course on keeping U.S. troops in Iraq. Why revisit the failed negotiation that preceded the troops’ withdrawal? For one thing, while the Iraqi government was undoubtedly a difficult negotiating partner, nearly all the major parties in Iraq stated publicly that they wanted U.S. troops to remain. For Maliki, an American presence would offer a chance to sustain outside investment, restore stability and renew regional confidence in Iraq. And, most important, it would give him greater confidence in dealing with Tehran.
Realistically, however, Obama is unlikely to risk the ire of his base or take on the complicated task of reopening the troops agreements with Iraq. But this does not mean that any U.S. enterprise in Iraq is doomed. Rather, it will require a redoubled commitment to Iraq’s democratic government and urgent efforts to knit Iraq into the gulf community.
As Sunni gulf nations look with growing concern toward Iran, they must be convinced that supporting Iraq’s government and empowering Maliki against Iranian predations and Sunni extremists is in their vital interest. Americans, working in concert with Iraq’s neighbors, including Turkey and countries along the gulf, must fight diplomatically and economically to retain the territory that was won militarily.
None of this will be easy. But with so much of the Muslim world in turmoil, the last thing we need is to compound that turmoil by turning our backs on Iraq.
=====
09:29
Re: THE MORE WE HOLD THE HIGHER THE END ...
joseki
Aye, buy in if you can, actual shares count. voting rights. not derivatives. spread betting and getting £8 is much riskier than buying the actual share for £17-20+
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theshipscook
6UP
so, it appears that Exxon use the Bahamas as a tax 'efficiency' :
Exxon Azerbaijan Caspian Sea Limited 100 Bahamas
Exxon Neftegas Limited 100 Bahamas
ExxonMobil Abu Dhabi Offshore Petroleum Company Limited 100 Bahamas
ExxonMobil de Colombia S.A. 100 Bahamas
ExxonMobil Kazakhstan Inc. 100 Bahamas
ExxonMobil Middle East Gas Marketing Limited 100 Bahamas
ExxonMobil Oil & Gas Investments Limited 100 Bahamas
ExxonMobil Qatargas (II) Terminal Company Limited 100 Bahamas
ExxonMobil Ras Laffan (III) Limited 100 Bahamas
ExxonMobil Yugen Kaisha
Must be a new company set up in the Bahamas, as I cant find reference to it yet on the Bahamian Govt website.
So, Exxon have set up a brand new company in the Bahamas, purely for Kurdistan. Would be interesting to track back all the history of the above companies, and if they were part of a merger/takeover between another party and Exxon at some stage.
p.s. III is carp....would be nice to think...no, I wont go there, any conspiracy theories will get us in trouble with the trolls.
-
Using Adobe reader, it's p166/175. tsc.
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an excellent post by LostinLao, I think, saying a merger with another Bahamas company only needed a 50% approval vote.
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theshipscook
3UP
looks like (and was only a brief look), that the companies listed are either a. minority partners in JV's, or the result of a takeover of another company, with what appears to be the exception of Colombia.
No idea if it helps, far too complex for me.
That Tillerson chap CJ was mentioning, gets a mention here and there.
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a4tlo
2UP
Great to switch on after a week of a huge paper loss for all (longs) and read this article below posted by Basementgeek.Great that's something to discuss over the weekend. This could be why the huge volume over the recent weeks and disgracefull damm right Robbery (Raids).
Exxon clearly knew they only have a short window to biy buy buy. Before they have publish their EOY Report, and let the cat out of the bag. Which we knew Exxon were in Kurdistan. Setting up Offics etc.
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MikeyAdmin
1UP
you need a special 'Mikey Refresh' button
iii went off for me last night aound 10.30pm, and was not on this morning at 8am.
Then my PC did an auto update again, and I got the bloody aweful IE9 again, so I had to find the damn thing and uninstall it.
Everythings fine now, and iii seems a little faster, but Monday morning will be the test.
For those with L2. Please keep an eye on the Ask Volumes & Depths and the weights onn Monday morning, as I expect or hope that we are free to rise (and thats not dirty speak from the weights being removed
==
Investors in Iraq can get ultra-high risk-reward bets
Baghdad bourse has outperformed all its Middle East counterparts
Reuters
Published: 00:00 February 25, 2012
Gulf News
0
Are you a global investor looking for an ultra-high risk-reward option? Consider Iraq. The perils are well known — possible civil war at the top of the list — but the Baghdad main index is still up 32 per cent over two years, outperforming its Middle East rivals. This year has started less well — drops are hardly a surprise for a fractious country in a volatile region — but this frontier market has many of the ingredients of success.
Contenders
The two-year performance is remarkable, well above the 6 per cent gain for the FTSE All World Middle East and Africa index. Within the region, only very peaceful Qatar has come close, returning 28 per cent. Saudi Arabia's index has risen 11 per cent. Investors in Egypt, Kuwait, and the UAE lost money. And unlike some peers, Iraq's bourse welcomes foreign investors and there are no capital controls.
Security has deteriorated within Iraq since US troops withdrew last year. Fears are mounting the country could split along provincial lines. Amid serious political infighting, oil majors ExxonMobil and France's Total are testing Baghdad's resolve in a bid to improve direct investment conditions in the oil sector. But Abu Dhabi's Invest AD Iraq-focused fund remains up almost 8 per cent since its inception in late 2010 around the same time the unity government was formed.
Article continues below
GDP growth forecasts
Despite violence and acrimony, reconstruction continues. The International Monetary Fund forecasts 12 per cent GDP growth for 2012. That is twice as fast as gas-rich Qatar, which is in a construction frenzy ahead of the 2022 soccer World Cup. The population is young — almost half under 14.
The bourse is small: the $4 billion (Dh14.7 billion) market capitalisation is less than 5 per cent of GDP. That ratio is 60 per cent in Saudi Arabia. But foreign investors may be attracted by the IPOs of Iraq's telecom operators if they happen later this year.
Iraq is a long-play, according to local-brokerage Rabee Securities. Small investments could reap strong returns. John Templeton had huge success investing in post-war Japan. The security and political risks are clearly greater in Iraq but oil, demographics and reconstruction are a powerful trio.
========
Iraq’s First Oil Transparency Report Fails to Include $2.5 Billion in “Signature Bonuses”
http://publicintelligence.net/unreported-iraq-oil-signature-bonuses/
February 25, 2012 in Featured
Iraq's Prime Minister Nuri al-Maliki (C) cuts a ribbon during the inauguration of a new Single Point Mooring (SPM) outlet in Iraq's southern province of Basra February 12, 2012. Iraq opened a new Gulf crude export outlet in the southern oil hub of Basra on Sunday, clearing the way for Baghdad to increase exports by around 300,000 barrels per day soon after crude begins loading. REUTERS/Atef Hassan
The missing pieces in Iraq’s first EITI report (Open Oil):
On December 20th, 2011, Iraq published its first EITI Reconciliation report, a report which was heralded as “a historic step toward oil sector transparency” by the international community, as the report outlined in great detail the money received from export sales by the Baghdad government. However, as already noted by Johnny,there were many questions raised by the report itself, and over the past couple of days I’ve been seeing how much information already in the public domain can answer just some of those questions.The sole revenue stream covered in the EITI report is that of export sales. At the time that the terms of reference for the this EITI report were agreed, in 2009, the Iraqi oil industry was entirely state run and without foreign participation. However, with the re-entry of international oil companies in 2009, revenue streams into the Baghdad government are no longer limited to export sales.
The first licensing round, which began proceedings in 2008 and was concluded in 2009, saw only one field- Rumaila- being awarded, although two further fields, Maysan and West Qurna Phase 1, were subsequently awarded in bilateral negotiations.
Under the second licensing round which took place in December 2009, seven of the ten oil fields offered in the round were awarded to various consortia of companies. The technical service contracts (TSCs) signed under this licensing round included a number of clauses that have created multiple revenue streams. These TSCs included clauses for cost recovery mechanisms, signature bonuses, and remuneration fees, none of which were included in the EITI report.
I began looking at the most clear cut of these revenue streams; the signature bonuses. These bonuses, which were widely reported upon in the media, ranged from $100 million, which Sonangol paid for the Qayara field, to $500 million, paid by a consortium led by BP for the Rumaila field.
One point of uncertainty was the form in which these payments were made. Some, such as the $500 million Rumaila field signature bonus, was reportedly paid by the company as a ‘soft loan’, to be paid back in 20 quarterly payments, in either crude oil or cash as decided by the company. Others appeared to have been renegotiated, such as the $300 million paid by Eni and Oxy for the Zubair field, reportedly slashed to $100 million in April 2010.
Bearing in mind these uncertainties, the total of the signature bonuses reported to have been paid by international oil companies to the Baghdad government during the period of November 2009 until January 2010 comes to $2.25 billion, as you can see in the spreadsheet I created. Even taking into account the discrepancy of reducing the Zubair field signature bonus, that still leaves a figure of around $2 billion dollars that is unaccounted for in the EITI first report.
==========
10:00
Back to reality- why the sp fall?
five hundred yds ahead
Good Morning
May I suggest the majority of posters here should sit back, have a nice cup of tea , relax and use their common sense this weekend.
With the geopolitical tensions still rising daily in the Middle East I can't see any other company putting in a take over bid for GKP. The oil reserves don't enter into this during the current tensions in that area and the implications it may have on GKP's operations.
Just ask yourselves a simple question , why has the sp been falling over the last few days?
My view is because of the concerns over what may soon transpire in the Middle East. If I am correct and the concerns remain then the sp of GKP will continue to fall.
You need to seriously start asking yourself the question as to whether or not you should take at least some of the profits now by selling before you lose your shirt on this increasingly high risk share.
imho etc
Best wishes
Harold.
Ignore Harold . The sp has not fallen
Najork
5UP
Harold,
Get back into your cell .
For those who sail close to the wind of sanity and believe even a muon of what you write I will spell it out to them:
1. The sp has made a correction because it rose so high. See chart.
2. Tensions are not rising in the Middle East anymore than they have been for the last twenty years. Plus ca change.
digibobdeluxe
1UP
Dear Cameronian,
OK, the first few posts were funny, I'll give you that. We all had a great laugh at the aliens, the Keystone pipe etc etc…
But now it's getting very tedious as your bitterness towards GKP holders shines through on a daily basis.
Just get over it mate. You called it incorrectly. You lost money. We all lose some time.
But please don't log in with one of your aliases and come here and snipe at the people who have (correctly) held over all this time - it's very boring.
Please change the record. Dump Harold and be a man and admit defeat. If you are a man that is. There's been Graham and Harold…. but then there's been Dotty too….. god, you must be one confused individual. Just be yourself and dump the other aliases!!
Enjoy the rugby everyone else!!
=
11:23
Since the start of new 2012
investor48
Hi All,
GKP's SP has had a great run from 190p at the end of 2011,to a high of 450p achieved last monday.This run has been accompanied by massive volumes,and at least 500million shares have been traded since the beginning of the year!
If these volumes to not tell us a story,we better pause for awhile and think!At the rate the SP was running,profit taking inevitably happens,dispite the fact that a few of our very respected posters have given values way above 450p as a possible TO price!
IMHO,GKP is worth alot of money if we had a 50-100year concession!Many have assumed that whoever buys GKP,can extend the concession easily,which i differ.The reason being:
1.On expiry of the concession period of Shaikan,it will no longer be an exploratory concession for the incumbent,it becomes a provened field.
2.The KRG will renegotiate the terms of the concession,and this is no rocket science contract,it has been practised by Pertamina,Petronas,etc,etc and new oil companies can also participate in the renewed concession pending whoever gives the best terms to the KRG.
3.There exists a depletion policy in most countries,and anyone operating Shaikan,cannot ramp up production as and when they like,subject to the needs of Kurdistan/Iraq.This means the buyer of GKP has to take this into consideration!However,there will be a minimum production target that will be agreed by GKP and the KRG over the entire duration of the concession,any shortfall which is due to the KRG(assuming that there is excess crude in the market.and the KRG/Baghdad want to comply with OPEC)the concession period will be extended.
4.Whoever buys GKP,the market cap,at the TO price will now be the cost of the acquirer.However NOC's may still pay a much higher TO price to ensure that they can get supply of the oil and commercial terms may not necessary apply.
However,at the current prices,i am of the opinion that we still have some way to go, to achieving a fair price for the buyer with our concessions of Shaikan.Sheikh-Adi,Ber Bahr and our small stake in Akri-Bijeel.Shaikan has been provened,Sheikh-Adi has great potential,Ber Bahr is yet to be known,but based on optimism,it should be just as good as Sheikh-Adi worst case scenario or Shaikan!But we will never know until we get the results from Genel,but then, it is only the first exploration well.
A bidding war is what we need,that will be good for all investors.Now that ExxonMobil is officially in Kurdistan,with the 10-K filing to SEC,and TOTAL could announce their concessions with Kurdistan anytime soon,it will be more expensive for whoever that has been running a slide rule over GKP the last few months,if that first bid does not come in soon,IMHO.
Whilst all PI's would want the TO price to be as high as possible,including me,it has to be equitable to both the buyer and the seller,in this case the shareholders of GKP.Only when the first offer comes in,more bids will come in, like what happen to COVE where the Thai National Oil Company PTT offered 220p,to Shell's 195p.
GKP has a prized asset in Shaikan and thats why all the long term shareholders of GKP have remained steadfast,because the daily fluctuation of the SP are for those that want to trade,but ultimately the final TO price of GKP,IMHO will be a good premium to the highest price traded last Monday.
The volumes traded since the year,tells me that alot of PI shares have been transferred to very safe hands and probably institutions or HNWI's.Whilst the current correction and consolidation could also see more PI's shares been transferred,as most PI's become fearful seeing the SP drop!
I urge all PI's to be steadfast and do not bother with the daliy fluctuation of 20-40p,unless one is trading!But,you do not want to be caught short,if GKP is suspended,midway in the trading session,pending a corporate announcement!!
Goodluck and best wishes to all
===
joseki
GKP will be over before political tensions result in any major deterioration that it offrails takeover.. ie Israel-Iran war immediately following US elections.
Israel isn't yet battle-ready and dialogue with Iran isn't yet closed.
We will look to list on FTSE by June and prove up all Shaikan the next month or so. Takeoever from any parties will be soon, especially Exxon are officially in Kurdistan and Sinopec already there.
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ExxonMobil plans $37bn annual spend
Exxon Mobil said Friday it plans spend a record $37 billion annually in capital projects for the foreseeable future, becoming the latest oil giant to unveil an eye-popping capital budget aimed at boosting production and reserves.
News wires 24 February 2012 23:22 GMT
"The corporation anticipates an investment profile of about $37 billion per year for the next several years," Exxon Mobil said in an annual report filed with the Securities and Exchange Commission, Dow Jones reported. "The corporation's financial strength enables it to make large, long-term capital expenditures."
The figure is slightly higher than the record $36.8 billion the Texas-based oil major invested in 2011 and a jump from the $32.2 billion it spent in 2010.
The announcement marks the rebirth of a trend towards bigger spending by the oil majors that was interrupted by the financial crisis, which caused oil prices to tumble in 2008.
A recovery in crude prices has led the majors to shrug off the uncertainty and keep boosting spending as they seek to fund the projects that will drive production growth and replenish reserves for decades.
But part of the increased spending comes from higher costs for equipment, materials and labor. These projects are getting increasingly expensive as companies push technological boundaries to tap reserves in hard-to-reach places such as the deep-water and the Arctic.
Rival Chevron said in December it plans to spend $32.7 billion in capital projects this year, 12% more than in 2011, while ConocoPhillips said its 2012 budget of $14.8 billion will be 11% higher than in 2011.
Texas-based Exxon Mobil is the world's largest publicly-traded oil company.
Published: 24 February 2012 23:22 GMT | Last updated: 24 February 2012 23:28 GMT
===
Beyond the Headlines: Feb. 13-19
Deputy Prime Minister for Energy Hussain al-Shahristani (center-right) meeting with Finance Minister Rafa al-Issawi and other key officials discussing problems facing foreign oil companies.
Missan threatens Luaibi with ban
Zubair residents prepare protest
New drilling in Kirkuk and Hamrin
Q&A: Akkas project chairman
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http://youtu.be/ddymJUTDOoY
The United States' intelligence community has ruled out allegations that Iran is creating a nuclear bomb. The Los Angeles Times reports that 16 separate agencies have all reached the same conclusion. Sasan Fayaz-manesh, from California State University, says similar intelligence reports a few years ...
======================
Fri 10:38
Re: The share price will fall below 300p
GKP.L
101UP
Cameronian,
Oh dear! Oh dear! You really are an odious individual. I see you are still here trying to find fault with everything you possibly can about GKP.
But perhaps I might remind you of a post you wrote on 23 February 2011, almost exactly one year ago, in reply to my question then concerning your perpetual negativity on this stock.
http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&threshold=0&action=detail&id=7855086
It is there in black and white. You said quite categorically: “I WANT THE SP TO RISE TO AT LEAST £3 WHICH IS MY EXIT POINT. (clear enough?)........unfortunately I don't think that will be any time soon given you think my entire list of negayives currently applies to GKP.”
So, my question today, one year on, is why you are still here, continuing to harangue everyone who invests in GKP, and why you continue to be SO negative about everything to do with this company?
The share price is not even the £3 at which YOU SAID QUITE CATEGORICALLY THAT YOU WOULD EXIT.... but now well over £3.60. It has recently been even higher.
And you obviously can’t be an Investor, because most would be overjoyed at how well the share has done since one year ago.
Incidentally, at the time of your post last year, GKP’s SP was standing at about 150p, so we are now about 140% UP.... since only 12 months ago.
It makes you think, doesn’t it! And it makes you wonder why any fair-minded individual would not see you for what you are, and even tick you up as well!
Back to 'the sin bin' for you.
scaramouche
=====
Author scaramouche View Profile Add to favourites Ignore
Date posted Thursday 10:31
Subject The Grand Old Duke of York....
Votes for this Posting Voted UP 214 times.
Message
Some time ago, a friend postulated the theory that the City HATES Private Investors.
Emotive stuff, but the more you think about it, the more you realise that it is true.
In the bad old days, investing was largely a closed shop. If you had substantial money to invest, you put it in the hands of Financial advisers and Fund Managers - those who presumably knew much better than you did where it might do best.
Okay, occasionally the Government might do some kind of privatisation, like British Telecom or an Electricity company, and a few small investors would try their hands at holding a very small share in a very large company.
A few of the more adventurous ones might even buy one of the many speculative offerings after reading about it in one of the growing number of penny share publications covering the subject. But the private investor 'market' was tiny.
But, with the advent of the Internet, everything changed....
Retail Investors, as the City now like to call us, could research stocks in detail and reach their own conclusions as to where to put their money. Internet discussion boards like iii offered ordinary people, just like you and I, the opportunity to share their knowledge and experience, to provide extensive research FREE OF CHARGE for the benefit of others, and even to share information heard through the grapevine from someone close to the action (and I don’t mean people like SF!)
In short, we no longer NEEDED to pour our money into funds, some of whom were populated by so-called ‘financial analysts’ who were barely out of short trousers.
But, even so, the amount of information available to us was much more limited than that available to professional traders and large institutions. And most of all, THEY still had the financial fire-power to move share prices up and down almost at will if they wanted.
Still, the AIM market offered many would-be investors the chance to get in at the ground floor, before any in-depth data was freely available to the bigger institutions who, after all, concerned themselves mainly with the FTSE100 companies.
Indeed, in the latter part of 2009, a new phenomenon was born. Many who invested in ‘risky’ oil stocks saw their initial investments multiply in a very short space of time. One such company was Gulf Keystone, an intrepid oil explorer with activities in the hitherto almost unknown province of Kurdistan.
There were experts on this board then who saw the potential long before their counter-parts in the City ever did. And Gulf Keystone’s early investors saw what had been a 10p share a few months earlier increase in value to around 100p by year end on the back of the prolific Shaikan discovery.
GKP had a large ‘retail investor’ base and, as time went on, that number grew ever larger and with it the skills to analyse, to research, and to provide information about a whole host of relevant factors. The Geology, the Geography, the Politics, the Infrastructure, the Contract terms, the means of Valuation.... and a whole host of other factors which the City, even with their wealth of analysts, reasearchers, sophisticated charts and trading tools, simply could not match.
What was also becoming abundantly clear was that Gulf Keystone had found a vast oil resource which was likely to soon have far-reaching, even Global, implications.
So, what was the City to do?
They used all the tools in their armoury (and believe me there were quite a few tools!) to help suppress the share price whenever news like major OIP upgrades (in April 2011 and November 2011 ) was announced.
They used their pals in the media to report negatively on anything GKP-related, and attach the mupp-et tag to GKP investors in general, showing scant regard for the unsurpassed knowledge contained by some in their ranks. And they infested the discussion boards with hordes of trolls ready to pour cold water on anything remotely positive.
And if there was ever an opportunity to fully exploit their massive financial fire-power they would employ short-term bear raids to shake out a few of those less well-researched or resolute.
The tactic worked and, despite the announcement of 10.5 BILLION barrels of oil at Shaikan in November, they managed to keep the SP below 150p until 10 November 2011.
But then, unexpectedly, Exxon the world’s largest Oil company put down its enormous roots in Kurdistan, breaking Shahristani’s seemingly unshakeable hold over the prospect of super-majors choosing to invest and explore outside the control of Baghdad.
There was then little to stop the SP rising and the City chose to give it a helping hand, driving the SP up to near 450p nearly triple its value of only 3 months before, on the back of rumours of potential takeovers and the company’s own admission that it was looking for a FTSE listing and early accession to the real old boys’ club - the FTSE100.
There was however one last chance for the City to get one over on those irritating little retail investors... the ultimate in ‘orchestrated’ bear raids.
Having only just helped to march the SP up to the top of the hill, 450p and a market cap in the top 80 of the FTSE rankings, some of the City firms decided to indulge in some rather dodgy behaviour combined with an inexplicable broker downgrade to half the present SP, in a blatant attempt to march the price back down again.
This unforeseen assault was to take £425 million off the market cap of GKP in a single day ... on no significant news.
The timing was crucial. In one fell swoop it took out many of those who had recently bought in on the rise or those retail investors who had unwisely over-leveraged themselves. And the following day, in just 10 minutes from the start of the trading session, a further £250 million had been knocked off GKP’s market cap.
It wasn’t pretty. The battle-field quickly saw enormous bloodshed and not a few casualties. And meanwhile, the architect of the fiasco was no doubt sitting there in pipe and slippers, sipping champagne, with one eye surveying the results of the carnage... and the other a substantial increase in his bank balance.
The evidence was there for all to see – the SP then started rising again from a low of 336p, and within the next 90 MINUTES had risen over 375p gain, and recovered a missing £350 million in market cap.
And all just ahead of news that was widely anticipated from Genel about Ber Bahr, and a likely further update from GKP about Shaikan-4, 5 and 6.
Of course, we still don’t yet know what that news will be, but it is very apparent that the City (in the shape of the Grand Old Duke of York) has been moving the SP up and down to its heart’s content.
This level of ‘orchestration’ is no doubt nothing short of criminal, and if the regulatory authorities were not completely toothless it would have been stamped out long ago.
Fortunately though, the retail Investor is now becoming much more street-wise and much harder to shaek out of their shares, and discussion forums like this are on the rise. So, IMO it can’t be very long before PIs take the upper hand over the City and the level of expertise shown by many investors in this fantastic company becomes something closer to the norm.
The days of the ‘Grand Old Duke of York’ are surely numbered... and, in my book, it can’t come a day too soon!
AIMHO and please DYOR
GLA, scaramouche
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2/25/2012 @ 3:52PM |1,088 views
Watch For Exxon And Other Oil Majors To Buy Out Smaller Players In Northern Iraq
Christopher Helman Christopher Helman, Forbes Staff
English: Map of the Autonomous Region Kurdista...
The Kurdish region of northern Iraq. Image via Wikipedia
This guest article is by Robert E. Gillon, director of energy company research at IHS, and co-author of the IHS Herold Kurdistan Regional Play Assessment
The Zagros Foothills exploratory play in Kurdistan is the highest potential onshore area in the world, especially to be looking for oil. The drilling results there from the last several years easily justify the high ranking given to the area by my colleagues at IHS Global Insight. However, in our just published report, the IHS Herold Kurdistan Regional Play Assessment, we found that
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much of the acreage in the highly prospective Zagros Fold Belt region in Kurdistan, which ranks among the best basins in the world for large oil prospects, has been licensed for exploration and production (E&P), and the area is now entering a period of consolidation. Despite the discovery of seven billion barrels of oil during the past five years, the majority of the known geological structures remain to be drilled.
In our report, which I wrote along with my colleague Katherine M. Flynn, an energy company equity analyst at IHS, we found the key here is that with the exception of some distant blocks on the Iranian border, nearly all the exploration licenses have been issued since 2007 — there is no more land available. Despite the uncertain geopolitical situation, the play is ripe for consolidation, particularly for larger companies who wish to take advantage of the potential of this huge play and who have the financial resources and intestinal fortitude to stomach the significant risks.
The play, which is located in the Northeastern part of Iraq, occupies almost nine million acres or 35,000 sq. kilometers, which is about one-third the size of Pennsylvania or one-half the size of Abu Dhabi. Petroleum exploration began in the Kurdistan region more than 100 years ago and the Kirkuk field, which has produced more than 11 billion barrels of oil, was discovered in 1927. Kirkuk is southwest of the more geologically complex structures of the Zagros Fold Belt, as are numerous other discoveries that have been developed. While some of the large structures within the core of the fold belt were drilled and proven to be productive, none were commercially developed prior to 2006 due to internal political considerations.
The initial production sharing contract (PSC) was issued by the Kurdistan regional government to Genel Energy in July 2002 covering lands that included the Taq Taq structure. During June 2004, DNO International was awarded a production sharing agreement that included the Tawke structure. Since that time, 47 additional PSCs have been granted, for a total of 49 licenses awarded to date in the region.
These licenses all have a five-year exploration period with a two-year extension possible. The play is at the stage now where the operators must make declarations of commerciality or relinquish the acreage without going to production. Secondly, many of these licenses are held by smaller companies with limited financial resources. Their need for capital should make this region of interest to E&P clients, to their capital providers, and to equity investors.
While many structures remain untested and unproven in the region, the first two blocks to be awarded, drilled and bought into production — block 2 (in the Tawke field), and block 33 in the Taq Taq field, have been credited with reserve estimates of 600 million barrels of oil apiece. At 10,000 acres per field, that works out to an amazing 60,000 barrels per acre, which is a very good field. The potential is immense, but the risks are quite pronounced.
The geopolitical risks are especially daunting, but they offer the best explanation for why the large valuation gap exists between both the equity market and transaction values of Kurdistan reserves and a net present value of existing fields. According to our valuation analysis of energy companies, several of the companies currently operating in the play are significantly undervalued in the market–by as much as one-fourth to one-half, which is likely due to several risk factors, although the reported entrance into the play by ExxonMobil and the interest shown by Total has clearly been a benefit to the equity pricing of these smaller producers. Taking into account the size and geographic spread of their acreage positions, as well as drilling results to date, there are several companies that stand to benefit most as the play evolves. They pose very attractive acquisition targets.
Aside from the continued geopolitical instability in the region, several technical risks present challenges to operators in Kurdistan. The first relates to the estimation of potential reserves, which, at this point, are subject to enormous variability, since few of the discoveries have had appraisal wells drilled. The second technical hurdle relates to infrastructure, especially the pipeline system in the region, which will need to be expanded if the play area is to produce at rates the reported discoveries indicate is possible.
In addition, existing operators in the play are going to be greatly challenged, the report said, to exploit and appraise the fields they currently have in hand as well as their other licenses in the play because the service industry capacity is just not there yet. The value in the play is there, that is clear. What is not clear is whether that value will be realized in a timeframe that is acceptable to investors. The key to success for E&P companies operating in Kurdistan is that they must have a very high tolerance for risk, and they must be patient in waiting for a payday. The rewards may be great, but they may not be realized for some time.
The IHS Herold Kurdistan Regional Play Assessment includes insight into the E&P activity in the region, discoveries to-date and estimated reserves, as well as company valuations for some of key acreage holders in the play. The IHS Herold Kurdistan Regional Play Assessment is available to IHS subscribers at herold.com/research/jsh_client.home
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Bob Gillon is director of energy company research at IHS (NYSE: IHS), a provider of information, insight and analytics. His experience, prior to joining IHS in 1995, includes six years in exploration geology and geophysics with Phillips Petroleum and 17 years as geological and financial consultant to investment and exploration
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