Independence Day: Iraq intends to replace Exxon with Russian companies - reports

Author scaramouche View Profile Add to favourites Ignore Date posted Sunday 20:18 Subject Independent's day... Votes for this Posting Voted 122 times. Message Good evening everyone, What I find most interesting about today’s article from the Independent on Sunday http://www.independent.co.uk/news/business/news/former-soldier-versus-oil-baron--in-1bn-high-court-fight-8200595.html is its TIMING and the strange LACK OF ATTENTION TO DETAIL provided by Mark Leftly, in sharp contrast to previous offerings from the same journalist. I can only speculate. But it does appear to me that his article has been put together in something of a hurry, perhaps designed to create an almighty storm and pressurise GKP into agreeing a settlement just before the trial begins. There is after all a rather distinctive pro-Excalibur, and anti-GKP slant to his comments, which I find surprising in someone writing for something called the INDEPENDENT. And personally, while I appreciate that a ‘settlement’ might be popular in some quarters, what I dislike intensely is what could easily be perceived as a kind of ‘Dirty Tricks campaign’ designed to unsettle investors and create extreme volatility in what is already a high risk share. I have therefore now shifted my stance slightly to hoping that the court case goes ahead and that Excalibur are swiftly shown to be the ‘chancers’ that I have long believed them to be. Indeed, if by some chance they go away from this with any reputation that they might have had in tatters, licking the wounds from a Judge angry at the apparent abuse of Court process, and facing an enormous legal bill, it MIGHT deter other opportunistic cases of this nature, which the admirable Ben Holland has highlighted seem to be a feature of the Oil Industry. Remember in particualr that the burden of proof rests with Excalibur – it is not enough for Mr Wempen “to argue from the witness stand that he was the one who first identified the oil potential of Kurdistan, the semi-autonomous region to the north of Iraq”, ridiculous as it is anyhow. This case is about CONTRACTS and the fact that Excalibur believe that they should have been included, even though the KRG chose not to do so - never mind the fact that there needs to be a contract agreed with all the other parties as well... which it wasn't! Of course, we have all read the deliberations by a number of our learned legal friends on this discussion board, and I have drawn a high degree of confidence from their musings. But what I have noticed lately is how very many people have concluded (or been pressed into thinking) that it might be best to give Rex and Co. a significant chunk of GKP shares or cash... just so that the case goes away. I do not share that view. If we want justice, and that is what the TRIAL will surely be about, I do not wish to see Rex getting away with a single penny that he is not entitled to. I commented on this previously in a post about one month ago. http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&action=detail&id=9970115 So, what has actually changed since then, according to the Independent article? 1. We read that the case “involves a former Green Beret and a tycoon who entertains contacts at strip clubs”. Oddly, nowhere in the article does it suggest that Rex W. himself might also have had a rather colourful and chequered history as much of the digging on this board has repeatedly identified, whereas Todd Kozel is clearly represented as the villain of the peace. Hardly a balanced piece of journalism, worthy of the Independent on Sunday, IMHO! 2. We hear that what has always been referred to in the past as “a claim for 30% of GKP’s Kurdish assets”, has somehow become a “£1 bn High Court fight”, with Wempen expected to say that “his company, Excalibur Ventures, is OWED either 30 per cent of Gulf Keystone Petroleum's Iraq assets or $1.6bn (£980m) in damages.” I find that valuation extraordinary. • On 7 November 2007 (the date that GKP signed the Shaikan contract), the market cap was around £100 million (30% = £30 million), based on Algeria alone. • Just prior to the announcement of the Shaikan discovery on 6 August 2009, GKP’s market cap had slumped to £20 million (30% = £6 million). • On 29 December 2010, when the ‘Excalibur legal claim’ RNS hit our screens, GKP had a market cap of £1.25 billion (30% = only £375 million). • And today, more than 3 years since the Shaikan discovery, and after more than £500 million has been raised separately via ‘placings’ and ‘convertible bonds’, GKP is worth £1.82 billion (30% = £550 million). I am therefore somewhat at a loss as to how the “up to 30% of GKP’s assets in Kurdistan” can translate into Excalibur being “OWED compensation” of nearly £1 BILLION, no matter what details might emerge from the case, what date is used, and especially given Excalibur’s contribution of absolutely zero towards GKP’s success. Sounds like just something to grab a few headlines, as far as I can see! Maybe of course, the article is based on the closing price of 411p on 17 February 2012, just before the Independent on Sunday (ML) published that now rather notorious article in which Todd apparently referred to the “world waking up” to GKP’s vast assets. http://www.independent.co.uk/news/business/news/oil-group-plots-elevation-into-ftse-100-index-7166384.html That price gave GKP a market cap of around £3.5 billion, of which 30% does amount to around £1 billion, so maybe it was a date that has remained in ML’s mind to this day. I suspect that most investors on this board also remember that particular day all too well! 3. We learn that “Also, there have been tensions between Baghdad and the Kurdistan capital, Erbil, over the legality of the contracts that the IRAQI GOVERNMENT has signed with foreign oil explorers and producers.” Arguably of course, that is perhaps the way it SHOULD be, but I think the reference should in fact be to KRG contracts. ML not exactly covering himself in glory with that one either! So, in conclusion, what do we actually have? A short, noticeably unbalanced article containing absolutely nothing new, conspicuously appearing just before the Excalibur trial is due to start; a peculiar and seemingly unfathomable reference to a ‘£1 billion’ High Court battle; and something that looks also to be rather hastily put together and not even accurate. Hopefully, the Judge will be looking rather more carefully at... the EVIDENCE. And IMHO, anyone who is shaikan by this particular piece of ‘sensationalist’ journalism probably needs to have their head cross-examined! As we have become very familiar with throughout its history, the GKP SP will move up and down like an out-of-control yo-yo. But what really matters to me is the final T/O price, not the day-to-day movements induced by ventures like Excalibur.... and those probably pulling their strings. AIMHO and please DYOR. GLA, scaramouche =========== grimbeaver View Profile Add to favourites Ignore Date posted today 08:01 Subject Court Case I don’t believe this will go all the way, it may start, but it won’t go all the way. Have been involved with commercial litigation and trust me not one of the people involved will want this to go in court, no one will have a glory day it doesn’t work like that. Everyone involved will be hurt, each witness will have a terrible time, each company will be embarrassed, and the only winners as usual will be the highly paid legal teams. The last litigation I was involved with was taking a much bigger company to court as they had wronged me and ripped me off, 100% ripped me off and not paid for a lot of work, I wanted a day in the sun with them and my solicitor and barrister were "supremely" confident in winning, now you people that know solicitors know they never give you huge odds of winning but mine were "supremely" confident. The case went to court, I had a full day on the stand, day 2 the whole thing collapsed and I lost, and lost badly and had to find costs and it nearly put me under. I won’t bore you with details but they had better and much cleverer legal people than I did. My barrister told me that pride and points of principle pay his wages and if possible in my lifetime only get involved with court litigation as a last ever resort. No one will want the GKP case to go ahead, they will be aware that anything could happen and they will all be ripped to bits on the stand by very very clever barristers who will have them saying all sorts of things on the stand. If I was a betting man I would say this will be done within the next 7 days Not everyone on here will have been involved with litigation and the notion of Todd ripping up the courtroom and making Excalibur suffer is just a nonsense, if it does go to court expect dirty tricks galore and every cupboard opened for skeletons, will they bring up everything they can on TK? Of course they will the Excalibur barristers will want to make him look bent and will go at him for everything he has ever done to discredit him as a witness. I tell you it’s horrible, the company I took on were crooks and everyone knew it, they had been in the national papers for ripping people off for millions, they were crooks, the MD and his cronies sat in court in jeans and hoody’s sniggering at me on the stand getting it from a very clever barrister. My company was a 40 years trading family company with an impeccable reputation and they were crooks (everyone including the judge knew all this) I still lost and it hurts to this day. I would never go to commercial court if I could possibly avoid it, it is not good. TK & Excalibur will be well aware of all it will involve. I would guess we will give them something it will all depend on how greedy Excalibur are. ============ ========== Todd Kozel will have given MC & Co every bit of Truthful info about the so called deal with Excalibur, as its not in TK's interest to say anything else. With that one certaincy I'm laying Odds that GKP will go to Court rather than settling, leaving it up to Ex and Backers to back of faced with the Costs that they can suffer ==== WisdomSeeker ' ... Is there a chance of an "undisclosed settlement" in the Excalibur case, and if so, what could this do to the SP with doubts as to the details of payments/ costs in either direction?' Yes.......but it would come out in the next accounts. I have thought about this and see it as a possibility if there are not going to be any 'next accounts' due to takeover. We would never know, in that case. ============ Thu 09:53 Immensely positive GKP.L Morning All I see this as immensely positive - it strengthens TKs hand in a TO - by announcing we can go it alone. It therefore increases the likely TO price. It can be repaid out of increasing production so none dilutive. It will sit in the bank making interest or be spent on infrastructure aimed at increasing production . As we are firmly in the cost oil phase that income will be rapid and IMO the bond will be repaid. I have spoken to a contact who has immense corporate experience and to quote him 'this is right out of the takeover 101 manual.' He is very encouraged. So am I! Kind regards, Dalesman ========= Iraq intends to replace Exxon with Russian companies - reports Get short URL email story to a friendprint version Published: 11 October, 2012, 18:52 TAGS: Oil, Russia and the global economy, Iraq Iraq, Shaikan Iraq is reportedly considering replacing US oil major ExxonMobil with Russian companies in the West Qurna-1 project, as the authorities are angered by ExxonMobil’s deal signed with the Kurdistan regional government without Baghdad’s approval. Baghdad is considering inviting Russia's LUKOIL and Gazprom Neft – both already operating a number of projects in the country, instead of Exxon Mobil to develop the West Qurna-1, Nefte Compass weekly reported on Thursday. With the step Baghdad would signal international companies operating in Kurdistan that it rejects any agreements with the semi-autonomous region’s government, sources in the industry told RT. Iraqi Prime Minister Nouri al-Maliki has reportedly offered the deal to Russian President Vladimir Putin at the meeting Wednesday, the newspaper said. However, no such offers have been officially announced. Russia's second-largest oil producer LUKOIL has refrained from comment. But Lukoil sources told RT that the company hasn’t received any official offers. Currently the oil major is developing the West Qurna-2 oil field in partnership with Iraqi state-run North Oil Company after Norway’s Statoil left the project. LUKOIL holds a dominant 75% share. On Wednesday Gazprom Neft, the oil arm of Russia's top natural gas producer Gazprom, froze two contracts for oil development in the Kurdistan region, according to the Iraqi PM. In August the company signed two production sharing contracts with the Kurdistan Regional Government directly avoiding Iraqi Oil Ministry approval. The company declined to comment, though a source told Reuters that Gazprom Neft is still interested in Kurdistan’s oil. The Russian oil major is already developing the 300 million barrel Badra deposit near the Iranian border. It holds a 30% stake in the project, along with South Korea's Kogas with 22.5%, Malaysia's Petronas with 15% and Iraq's state-owned Oil Exploration Company with 25% in the project. Production is due to start by 2013. ===================== Iraq Energy Outlook (Released on 9 October 2012) Iraq is already the world’s third largest oil exporter. It has the resources and intention to increase its oil production vastly. Contracts are already in place. Will Iraq’s ambitions be realised? And what would the implications be for Iraq’s economy and for world oil markets? The obstacles are formidable: political, logistical, legal, regulatory, financial, lack of security and insufficient skilled labour. One example: in 2011 grid electricity could meet only 55% of demand. The International Energy Agency has studied these issues with the support and close cooperation of the government of Iraq and many other leading officials, commentators, industry representatives and international experts. This special report, in the World Energy Outlook series, presents the findings. The report: Examines the role of the energy sector in the Iraqi economy today and in the future. Assesses the oil and gas revenues and investment needs. Provides a detailed analysis of oil, gas and electricity supply through to 2035, highlighting the challenges of infrastructure development and water availability. Spells out the associated opportunities and risks, both for world oil markets and the shaping by Iraq of its economy and energy sector. Press release Presentation from the International Press launch - WEO Iraq Outlook special report by Ms. Maria van der Hoeven, IEA Executive Director and Dr. Fatih Birol, IEA Chief Economist ================= Iraq wants Russians to replace Exxon at West Qurna: report inShare0Share this Email Print Related NewsPutin backs Russian push for Iraqi oil Wed, Oct 10 2012 UPDATE 3-Iraq buys $4.2 billion in Russian weapons-document Tue, Oct 9 2012 Iraq buys $4.2 billion in Russian weapons: document Tue, Oct 9 2012 Russia's Putin in charge at 60, but facing threats Fri, Oct 5 2012 String of Iraq blasts kills at least 32 Sun, Sep 30 2012Related TopicsWorld » Russia » Iraq » Middle East Turmoil » MOSCOW | Thu Oct 11, 2012 8:42am EDT MOSCOW (Reuters) - Iraq is considering replacing ExxonMobil with Russian companies at the supergiant West Qurna-1 oilfield, after the U.S. major angered Baghdad by venturing into Kurdistan, according to a media report citing industry sources. The northern Kurdish region has riled Baghdad by signing deals with foreign oil majors, such as Exxon, Total and Chevron, contracts the central government rejects as illegal. Nefte Compass, a weekly energy newsletter about the FSU and Eastern Europe, said on Thursday that Iraq is weighing whether to replace Exxon with Russia's LUKOIL and Gazprom Neft - both already involved in the country. It said that the proposal was due to be raised at a meeting this week between Iraqi Prime Minister Nouri al-Maliki and Russian President Vladimir Putin. The meeting took place on Wednesday, but no such offers - if they were made - have been made public. A spokesman for Russia's second-largest crude producer LUKOIL, which operates West Qurna-2, said the company is not planning to increase its exposure in Iraq by acquiring a stake in West Qurna-1, reiterating the company's official line that it is satisfied with its portfolio in Iraq. Gazprom Neft, the oil arm of the world's top natural gas producer Gazprom, declined to comment. Sources have told Reuters that Russia's top oil company Rosneft, may team up with Exxon in Iraq after the two have struck a landmark agreement to jointly tap Arctic hydrocarbon riches and oil and gas in North America. Rosneft also declined to comment on the possibility of entering Iraq. On Wednesday, Putin, a vocal opponent of the U.S.-led invasion of Iraq in 2003, called for Russia to strengthen its presence in the OPEC oil producer state at the meeting with al-Maliki. Sources also said Gazprom Neft has no plans to freeze its projects in Kurdistan, it pledged to develop in August, refuting media reports. The company already has a project in Iraq, near the Iranian border, where it expects to produce about 15,000 barrels per day from 2013. (Reporting by Vladimir Soldatkin; additional reporting by Olesya Astakhova, editing by William Hardy) ============