Gulf Keystone Update

Posted on 13 March 2014. Tags: Akri-Bijeel, Ber Bahr, GKP, Gulf Keystone, Shaikan, Sheikh Adi Pages: 1 2 3 4 Gulf Keystone Petroleum (GKP) has this morning provided an Operational and Corporate update, and released a third party audit of the Company’s reserves, contingent resources and prospective resources for its petroleum interests in the Kurdistan Region of Iraq. Summary The Company continues to maintain current stable production and sales levels of approximately 10,000 barrels of oil per day (“bopd”) from the Company’s first Shaikan production facility (“PF-1″) in the Kurdistan Region of Iraq, which is expected to increase in Q2 2014 as a result of the recently tied-in third production well, Shaikan-4, which is now flowing. The second Shaikan production facility (“PF-2″) is being commissioned, with two wells (Shaikan-2 and Shaikan-5) already tied in and the first production from PF-2 expected in Q2 2014. The Company remains focused on achieving the target of 40,000 bopd of production capacity from PF-1 and PF-2 in 2014. Since crude oil exports from the Shaikan field commenced in December 2013, in excess of 105,000 tonnes (690,000 barrels) of oil have been tendered and sold at international prices. The Company is expecting to receive payment, in line with the terms of the Shaikan Production Sharing Contract. In order to move to the next stage of the Shaikan project execution, the Company is making progress in its discussions on the near term debt financing options. Production and Development Shaikan (75% working interest; Operator) Stable production operations and sales from PF-1 continued in January, February and March 2014 at the level of approximately 10,000 bopd (gross). Total cumulative production from late 2010 to date from Shaikan has reached 2.1 million barrels. Since crude oil exports from the Shaikan field commenced in December 2013, three cargoes totalling in excess of 105,000 tonnes (690,000 barrels) of oil have been delivered from PF-1. The fourth cargo of approximately 33,000 tonnes (215,000 barrels) of Shaikan crude is expected to be delivered later in March 2014. In addition to the presently producing Shaikan-1 and Shaikan-3 wells, Shaikan-4 is now tied into PF-1, has started to flow and is expected to increase the current output in Q2 2014. An amine plant is currently being connected to PF-1, which will allow sweetening of some of the associated gas stream, which will be used as fuel for the PF-1 operations instead of diesel, representing savings of approximately US$400,000 per month to the project. The Shaikan-2 and Shaikan-5 wells have now been tied into PF-2 and the production facility is currently being commissioned with first production, initially of approximately 10,000 bopd, expected in Q2 2014. The connection of Shaikan-10 to PF-2 will also be completed in Q2 2014, increasing PF-2 production capacity. The Company is focused on achieving the target of 40,000 bopd of production capacity from PF-1 and PF-2 in 2014, which it intends to reach through: ◦Potential re-configuration of Shaikan-8, initially drilled as a gas injection well, into a fourth producer tied into PF-1 ◦Tie in of the deep exploration well Shaikan-7, which is currently being drilled, to become the fifth producing well at PF-1 ◦Productivity enhancement of the Shaikan-1 and Shaikan-3 wells through the replacement of the existing 3 ½” tubing by 4 ½” tubing ◦Plans to drill an additional production well in the proximity of Shaikan-10, which will also be connected to PF-2, and install four flowlines between the Shaikan-10 location and PF-2 The Company’s focus is on the ramp-up of commercial production from the existing Shaikan facilities. The move to 40,000 bopd of production capacity will allow further expansion of export crude oil sales. The additional cash generated, in addition to the Company’s near term debt financing options where the Company is making progress in its discussions, will facilitate the move to the next stage of the Shaikan project execution. This next stage envisages a further 60,000 bopd of additional production capacity in order to reach the medium-term target of 100,000 bopd set for Phase 1 of the approved Shaikan Field Development Plan. This next stage will require construction of additional production facilities with gas injection and water handling capabilities, as well as the drilling of a substantial number of development and production wells. Exploration & Appraisal Shaikan (75% working interest; Operator) The Shaikan-7 deep exploration well is currently drilling 17 ½” hole below 2,600 metres in the upper Triassic. Shaikan-7 will drill into the deep Triassic, after setting casing at the bottom of Kurre Chine B formation, and is then expected to penetrate the Permian with the first results expected in Q2 2014. Sheikh Adi (80% working interest; Operator) The first well to appraise the Sheikh Adi discovery, which spudded in December 2013, is drilling below 2,240 metres in the Alan formation in the Jurassic. A well testing programme to evaluate the potential of the Jurassic reservoirs in the Sheikh Adi footwall is currently being designed, before the well enters the Triassic. Approximately 111 km of new 2D seismic data acquired in the north of the block during 2013, is being processed to evaluate potential new structures. Ber Bahr (40% working interest) The Ber Bahr-1 exploration well was successfully side-tracked in the first half of 2013 and tested 2,100 bopd of 15 degree API oil from the Jurassic Sargelu formation. A 3D seismic survey is underway, planned for completion by mid-year 2014. Ber Bahr-2, an appraisal well, is planned to spud in the fourth quarter of 2014. Akri-Bijeel (20% working interest) Further to the declaration of commerciality of the block by the operator in 2013, appraisal drilling continues and work is ongoing on the Field Development Plan for the Bijell and Bakrman discoveries, which is expected to be submitted to the Ministry of Natural Resources of the Kurdistan Region of Iraq in Q2 2014 and approved later in 2014. The operator plans to complete four appraisal wells on the Bijell discovery and one appraisal well on the Bakrman discovery in 2014. Bijell-1B has been side-tracked, completed as a producer in the Sargelu formation in the Jurassic and tied into the Bijell Extended Well Test facility (“EWT”) where initial flow rates of 3,500 bopd of 23 degrees API oil have been recorded. The operator expects that production from the Bijell EWT facility will reach its full capacity of 10,000 bopd of export quality crude by the end of 2014. Bijell-2, a deep appraisal well targeting the Triassic horizons of the Bijell discovery, is currently drilling 12 ¼” hole below 4,750 metres in the Kurre Chine Anhydrite formation. Bijell-4, an appraisal well targeting the Jurassic horizons of the Bijell discovery, is drilling ahead below 2,800 metres in the Tanjero formation. Move to the Main Market As previously announced, the Company expects that its common shares will be admitted to the Standard Segment of the Official List of the United Kingdom Listing Authority (the “Official List”) and commence trading on the London Stock Exchange plc’s (“LSE”) main market for listed securities effective at 8.00 a.m. on or after 24 March 2014 (the “Admission Date”) (together the “Admission”), subject to the receipt of the necessary approvals from the UK Listing Authority and the LSE. Trading in the Company’s common shares on the AIM market of the LSE (“AIM”) will be cancelled simultaneously with the Admission. The Company will issue a prospectus in connection with the Admission prior to the Admission Date. As part of the Company’s move from AIM to the Official List, it is today publishing the Competent Person’s Report on the petroleum interests of Gulf Keystone Petroleum Ltd and its subsidiaries in the Kurdistan Region of Iraq (“CPR”), which has been completed by ERC Equipoise Ltd. This is the first third party evaluation of the Company’s Reserves, Contingent Resources and Prospective Resources for the Shaikan field and its other petroleum interests in the Kurdistan Region of Iraq (Sheikh Adi, Ber Bahr and Akri-Bijeel blocks). It is available on the Company’s website. Todd Kozel (pictured), Gulf Keystone’s Chief Executive Officer commented: “Progress achieved since July 2013, when we commenced commercial production from Shaikan, demonstrates that Gulf Keystone is evolving from an oil and gas exploration company to a production company targeting production capacity of 40,000 barrels of oil per day in 2014. “Another significant milestone in this journey is our forthcoming move from AIM to the Main Market of the London Stock Exchange and we are another step closer to achieving this goal after publishing the Competent Person’s Report today. “We see significant upside to this important baseline third party estimate of reserves and contingent resources, which will be targeted through the implementation of the approved Shaikan Field Development Plan in the coming months and years.” (Source: GKP) ================ 15% off m cap for 16 mill shares traded or 8 mill sold if you like , This is precisely the kind of atmosphere where people think if I just press that button it will all be over!......Were listing in a few days on the main market dont do something you might regret. If you are going to sell dont read this BB for opinions for help /advice make your own decision away from the PC over a cuppa and then do it if you think its right for you dont get caught up in the herd mentality on here. The derampers are going bananas today absolutelly bananas! Im not saying dont do it if you really have had enough but just be carefull in how you formulate the decision thats all. Luck all ============================= Well I have to say I am pretty astonished by people's reaction to the CPR: somehow spooked into selling. Still, provided the savvy a great opportunity to enter/top-up. The reserves quoted in the initial CPR were always going to be ultra-conservative. But that's not the point. Actually I was pleasantly surprised to see the CPR Shaikan OIP figure of 9.2 billion barrels. Sure it's not 13.7, but it is an independent audited third-party confirmation that, just as the company has been telling us for a while, we have found a super-giant multi-billion barrel oil field. The reserves figure quoted so far is just the tip of the iceberg. In time, as field development proceeds, there is no reason to suppose that an industry-normal recovery rate will not be achieved. Meaning that several billions of barrels will be added to the reserves. But that's not the point of the initial CPR. What the CPR does is put an independent audited third-party valuation on, not the company as a whole, but on the absolute minimum amount of oil that is guaranteed to be present, and recoverable using wells that have already been drilled. Why? To establish the value of an asset that can now be booked on to our balance sheet. Yes we can have a $1billion asset on our balance sheet! And that asset provides collateral for a loan. And with a full 75% WI in current sales, that loan does not need to be all that large to kickstart the development plan, as I have posted before. Good luck all long-term investors. Hold the nerve - we always said this road would be rocky! SilkStillDreaming ======================== Still digesting how the management allowed us to get into this position. One word that TK and JG were at pains to emphasise on Thursday was 'complex'. There is no disputing that this IS a complex project. They are both (and Ewan) keen to promote themselves to the big league and pay themselves the big salaries and bonuses. In my opinion they are out of their league. There is no question about the massive potential and upside of the 4 blocks but these guys do not have the experience to manage this project. I go along with I48's post today and hope that a predator takes a big enough share and removes the current management team. I presume that a technical audit, such as this CPR, would be discussed and the contents agreed with the customer prior to publication. The implication, therefore, seems to be that there was an extended period of argument and discussion with GKP board - a battle that our people finally lost, at least in respect of SH-6. JG, in response to Will Forbes, said the DGA/RS people had "been there every day" whereas the ERC people had "only looked at a couple of wells" - implying that their dataset was limiting their evaluation. This puzzled me - if true, surely the customer could have insisted on many more wells being evaluated in order to get a more accurate picture? Re. the Q&A session, I was amazed at the poor quality of analyst's questions - and at their lack of determination in getting full answers; Nlper, Ren and Bonobo did a much better job at the Paris AGM. ============ I was reading through the Edison report and looking at comparison of RF of Genel vs GKP. What confused me most was that Genel gets credited with a 20% RF whilst we are getting 12% on average. OK Different geology differnet places etc etc BUT When I compare our joint asset - Ber Bahr - Genel report a RF of 22% and GKP EDC are reporting around 6%. Now forgive me but surely its the same oil in the same place, but with 2 wildly different RF..... === Also noticed that the oil above the isotherm is not included in EDC. This accounts for 70% of the stoip difference between 18B from Gkp and the 13 from EDC. Or 3.5 billion oip. They are ignoring this because they say it's too tarry to flow. However for around $50-$100 million they can flow this oil using steam injection and blending. Even at 10% rf this would add 350million barrels of oil - and let's half it for arguments sake say 300 million b Resolve playground squabble on sh6 oil water contact and you add 300m depth and circa 300 million barrels Add to this genel RF of 20 - or let's take it lower and just say 16% and add another 200 million barrels You get to around 800 million barrels additional Now sh7 is hopefully light oil. They have been near this depth before Nd had to stop because pressure was off the scale - sh7 could be another 250m of light. (Ok. So looking a bit more then So all in all I think another one billion barrels will get firmed up within 12 months. If they find light oil in sh7 I bet you will see a change to the fdp. And 2 billion 2p+2c at $6 makes double digit billions on core NAV Now it's late and I may have units wrong - all off the top of head. But I'll work it out , or someone else can What would be interesting is to compare to CPR assumptions that genel use and read across to Gkp. Anyhow over 24 months I can't see a big geological issue preventing significant reserves upside. =========== There are people on this and other bb's who would have you believe that as a result of the CPR being published The Mighty Shaikan has shrunk and vast amounts of oil have disappeared. This is of course complete rubbish and it is just the nature of a CPR that only a very restricted and conservative amount of oil is recognised . In any event even on the CPR figures it is of a size that any major would give their right arm to own. I wonder what all those other companies are doing exploring for oil in Kurdistan. Why drill in hope when you could buy in certainty with GKP. We had all the fuss about appointing the famous four at the instigation of a couple of our institutional shareholders however this doesn't seem to have had the desired effect so far if we look at the sp. However one thing you can be absolutely certain about is that Deutche Bank (whom Simon Murray knows very well) will not have announced the move to the main market without having all their ducks in a row. The financial arrangements will have been sorted. The Mighty Shaikan is at an early stage of its discovery and recovery of its oil and it will be very interesting to see what reserve figure is credited to it in 2,5 and 10 years time because that's what the big boys will be bidding for. If you believe as I do that the Mighty Shaikan will prevail continue to hold or buy more on Monday. If you don't believe (and actually hold any shares ) then sell and move on to something you are comfortable with. ========================= Perhaps the ultimate irony now on this board, in that the 'TK to stay' crew are now an insignificant minority. I think you can count these club members on the fingers of one hand. I wonder if they'll still be so positive about GKP's future when the current top table are replaced, for surely they will be. We are truly sunk without hope if the main market doesn't trust the top table. I wonder how Todd feels this morning, fully in the knowledge that his only supporters now in the entire financial markets amount to not much more than a failed washing-machine salesman and a retired plumber? I wonder how Robert Kuok feels this morning, staring at his c.£15m paper loss - that is if he even still holds his 'slightly less than 3%' number of shares? Its taken a few years, but even i48 has finally seen the light and turned. Change will come, driven by the M&G4, Capital, and The City etc, who will surely gather strength, force an EGM to oust the value-destroyers and replace them with people they can trust. Texan cowboys will simply not be tolerated on the main market. The days of real accountability and building shareholder value on facts, not hype, have started, and we need a builder at the top - not a perma-tanned salesman - and I'm sure our BoD have known this for a very long time. From the moment change started and the M&G4 arrived, the BoD must have been planning their exit from the business. If not, then they've been very very very naïve indeed. Todd - if you really cared about your company, and its shareholders, surely you can see that it would be for the best if you chose to take a very long cruise on your super yacht sometime soon? Todd - do the decent thing. Take the deal and go. You know if you don't, it will simply be forced. ============ Re: I'm with you first thing Monday will be topping up GKP now a screaming buy … need to raise more cash quickly , can see a trip to the bank manager on the horizon this week --------- Opulentia, I do not know you. And I admire your enthusiasm. However, you have been calling this a 'screaming buy' all the way down. Now, many of us (including myself) have made the mistake of thinking it can go no lower. But with long term supports breached, no clarity of finance, hardline 'revision' of numbers (whether you agree or not), it is perhaps unwise to keep banging the 'screaming buy' drum, until the dust settles. I would certainly be wary of approaching your bank manager and possibly over-extending. I hope you can hold on to your shares until they all come back into profit, because your posts in 2014 alone provide a good illustration of the slow car crash that this investment has become (and perhaps how blinded retail investors - including myself - have often got) - 09.01.14 Little top up … with the good progress going forward, it would be rude not to Transaction type: Buy Executed Price: GBP 1.81625 21.01.14 some more golden tickets into my pot Transaction type: Buy Executed Price: GBP 1.807 29.01.14 Transaction type: Buy Executed Price: GBP 1.637 03.02.14 Nice little Top up, unbelieveably cheap , never thought id get some more golden tickets at these prices, really helps bringing average down Executed Price: GBP 1.568675 07.02.14 My top up this morning Price dealt: £1.6285 17.02.14 happy to add even at 156p 26.02.14 managed a top up this morning in the 140,s thanks Mr MM, 12.03.14 Transaction type: Buy Executed Price: GBP 1.4518 13.03.14 picked up a stack of shares at under £1.10. --- Many will try and call the bottom here. Could be 95p, 87p, 64p, 35p … depending on who you listen to. It might be wiser to ignore the prevailing SP and wait until the ship has been steadied (or a new captain placed at the wheel). Sincere good luck. ============================ Baghdad regains control in oil disputes Iraqi Prime Minister Nouri al-Maliki speaks in Baghdad on Jan. 12, 2014. (THAIER AL-SUDANI/Reuters) By Ben Van Heuvelen, Patrick Osgood, Rawaz Tahir, and Staff of Iraq Oil Report Published Thursday, March 20th, 2014Iraqi central government authorities have regained leverage in their long-standing oil disputes with the autonomous Kurdistan Regional Government (KRG).Just a few months ago, the KRG seemed poised to solidify the independence of its oil sector by sending crude through its new pipeline to the Turkish border. But those plans have been complicated both by scandals swirling around Turkish Prime Minister Recep Tayyip Erdogan and by a newly assertive government in Baghdad.As more than 1.3 mill...

Legal conflict looms as oil politics deteriorate

Friday February 1, 2013 Analysis: Legal conflict looms as oil politics deteriorate As Baghdad threatens to sue Genel Energy for its independent KRG exports, the course of Iraqi oil policy - and Kurdish autonomy - may be decided in court. Exxon Must Choose: Southern Iraq or Kurdistan Posted on 30 January 2013 Iraq has again told Exxon Mobil that it must choose between working in its southern oilfields or in Kurdistan. Reuters reports that Oil Minister Abdul Kareem Luaibi [Elaibi] expects the company to make a final decision within a few days, adding: "We made it clear to Exxon in the last meeting that the answer we expected from them is either to work in the Kurdistan region or to work in southern Iraq ... Exxon Mobil cannot work in both fields at the same time." "Other oil companies that signed deals in Kurdistan region should face the same scenario", said Luaibi, "and we have informed them". Exxon's chief executive Rex Tillerson met with Iraqi Prime Minister Nouri al-Maliki and with Kurdistan's President Barzani last week to discuss operations in both areas, while industry sources said the US oil major was considering an offer from Baghdad. Friday January 25, 2013 Analysis: Exxon enters the political fray With a landmark visit to Baghdad, ExxonMobil CEO Rex Tillerson has likely inaugurated a new era of engagement in the turbulent politics of Iraq. ==== UK Open New Visa Centre in Baghdad Posted on 30 January 2013 The British Minister for Trade and Investment, Lord Green of Hurstpierpoint, officially opened the new Visa Application Centre in Baghdad along with the Foreign Minister of Iraq, His Excellency Hoshyar Zebari. For the first time, members of the Iraqi public are now able to apply for UK visas from Baghdad. ========== The ISX operates Sunday to Thursday from 10:00 a.m. to 12:00 noon (Iraq time). Prices delayed by 15 minutes. HomeAboutNewsletterArchives» SitemapAdvertisingContact» ContributorsJobsEventsReportsTenders‘Your Country’» United Kingdomبلدك العراقعربيPageviews Last Month: 235,423Oil & Gas» Ahmed Mousa JiyadConstructionIndustry & TradeBanking & Finance» Sherif SalemCommunications» Lisa KnightPublic WorksTransportationAgriculture» John SchnttkerBob NottelmannEducation & Training» Arabic TutorialMadeleine WhiteVocabularySecurity» Gary SandifordWeekly Security UpdateHealthcareBlogEmploymentInvestment» Mark DeWeaver on Investments and FinanceJared LevyLeisure and TourismPolitics» Tariq AbdellCommodities & MiningSterling Energy to Pull Out of Kurdistan Iraq to Harness Solar, Wind Power Missan to Get New Power Station Atlasjet Plans Iraq Subsidiary Iraqi Kurdistan Considers Lebanese Trade Ties LatestSterling Energy to Pull Out of Kurdistan Categorized | Oil & Gas Shell Awards WorleyParsons 3-Yr Gas Contract Posted on 24 January 2013. Tags: Basra Gas Company, BGC, Mitsubishi, Shell, WorleyParsons WorleyParsons has been awarded a three year contract by Shell Gas Iraq BV to provide project management support and services for the rehabilitation of gas facilities and infrastructure that are part of the scope of Basrah Gas Company (BGC). In November 2011, as part of a push to make better use of its gas resources, Iraq’s government signed a deal with Shell and Mitsubishi to develop the world’s largest flares reduction company, BGC. BGC is expected to commence operations early next year. It is a 25-year joint venture with state run South Gas Company holding a 51% stake, Shell 44% and Mitsubishi 5%. This joint venture is designed to capture, treat and monetise associated gas currently being flared from three southern oilfields, wasting more than 10 million dollars per day of the country’s natural resources. WorleyParsons will provide project management, technical and construction supervision personnel to support BGC in the rehabilitation inspection, engineering, procurement and construction (EPC) activities. WorleyParsons will also provide an established Project (Quality) Management System which will help manage and control the project effectively during its execution from the plant inspections through to engineering and design concluding with commissioning. The contract will be executed from WorleyParsons’ offices in Iraq and the United Arab Emirates, and will involve working in different locations around the world with front end engineering design and EPC contractors. The man-hours to be performed by WorleyParsons over the life of the contract are estimated to exceed 500,000 man-hours. Commenting, WorleyParsons’ CEO Andrew Wood (pictured) stated: “We are pleased to continue our involvement in the development of Iraq’s gas infrastructure as well as being part of this project that will significantly contribute to the sustainability of the Iraqi economy and environment. We will work closely with the development partners to ensure we create the maximum value over the lifetime of the asset.” (Source: WorleyParsons)

Iraq Oil Report-Q&A:Lukoil's Vitaly Novozhilov

Author SpikeyDT View Profile | Add to favourites | Ignore
Date posted Wednesday 21:36
Subject Iraq Oil Report-Q&A:Lukoil's Vitaly Novozhilov
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Q&A: Lukoil's Vitaly Novozhilov
http://www.iraqoilreport.com/business/companies/qa-lukoils-vitaly-novozhilov-6214/
Lukoil's deputy director in Basra, Vitaly Novozhilov. (ALI ABU IRAQ/Iraq Oil Report)

By ALI ABU IRAQ of Iraq Oil Report
Published September 21, 2011

BASRA - The Russian oil firm Lukoil has faced its share of challenges in its quest to develop the super-giant West Qurna 2 oil field, but now the company is confident it can deliver on its massive contract.

Of all the fields awarded in the 2009 bidding rounds, the deal for West Qurna 2, which holds 12.9 billion barrels of proven reserves, will pay out the lowest per-barrel profit. Along with its junior partner, Norway's Statoil, Lukoil's bid included a remuneration fee of just $1.15 per barrel.

Since winning that contract, Lukoil has faced many of the challenges that have slowed the progress of other foreign oil companies in Iraq, where decades of war and sanctions have ravaged the country's infrastructure and institutional capacity. In April, Lukoil announced it would not begin production until 2013, a year behind schedule.

In an interview with Iraq Oil Report, Lukoil's deputy director in Basra, Vitaly Novozhilov, said that the company remains committed to that timetable. He emphasized that Lukoil expects to hit its production plateau target of 1.8 million barrels per day (bpd) by 2017, as its contract stipulates.
Novozhilov also discussed the fate of the oil field's associated gas. Iraq has been negotiating a controversial deal that would make Shell the operator of the prospective Basra Gas Company, which would develop much of Basra's associated that is currently flared due to lack of infrastructure.

Ali Abu Iraq: When did your work begin and when do you expect to begin production?

Vitaly Novozhilov: The first group of Lukoil personnel made it to Iraqi territory in 2010 and began work on the project. Now the company is conducting the preliminary work needed to extract oil, with the help of South Oil Company, and we will continue with our plan, which was ratified by the Iraqi government.

In 2013 we will extract the first barrel of oil, to reach a production rate of 1.8 million barrels a day by the year 2017. But 2013 is the actual beginning of production.

AAI: What challenges need to be overcome before you can meet that goal?

VN: Of course, as I mentioned, the volume of oil production will be very large. At this time the infrastructure currently in southern Iraq is unable to absorb such quantities of oil. Therefore, the project should also consider building new infrastructure, including oil and gas pipelines, storage tanks, and other engineering facilities.

AAI: Does your contract allow Lukoil to develop the associated gas? Or is this the responsibility of the Basra Gas Company, which Iraq expects to establish soon?

VN: All the oil that is extracted, along with the associated gas, belongs to South Oil Company. We have to offer all the gas extracted to the South Oil Company, and it would make a decision in this regard.

AAI: Has the security environment in Basra caused you any problems or concerns?

VN: First of all, I would like to say that the Iraqi people respected and still respect the representatives of the Russian people. We frankly enjoy good hospitality, and we sense there is a good feeling about the Russian staff working in this region. So, as Russians, we have not yet faced any security problems with the people of the region, and our relationship will strengthen over time and become a more profound friendship.

AAI: How is your relationship with the local population near the oil field?

VN: It is well known that the West Qurna 2 area is populated, and there are more than 70,000 people, including a large number of tribes.

In cooperation with South Oil Company, we have established good relationships with both young people and elders. We have a direct frank dialogue, and we have reached an agreement with the tribes located there. If there is anything that requires clarification, we meet and discuss topics that require clarification. Through all the negotiations and dialogues we have had between the company and the community, no problems have been encountered so far. We have overcome all of the difficulties.
AAI: What are the problems that have needed solving?

VN: There are a large number of farmers who grow wheat, barley and other plants, and we cannot execute our project without compensating them for their crops and farms. For the purpose of compensation to local farmers, the Prime Minister (Nouri al-Malki) decided to establish a compensation committee in Basra.

The issue of compensation is up to the Iraqi government and the company is not responsible for this. But we do have the expertise in the issue of compensation in different countries, so we offered our expertise with respect to compensation, which we gained in the rest of the world, to the government of Iraq.
(The committee) started its work in Basra a month ago.

AAI: Is Lukoil supporting any projects to support the development of West Qurna 2, like a power plant? If so, will electricity generation be connected to the national power grid?

VN: According to the development plan of West Qurna 2, there must be a power plant for the development and operation of the field. The development of the field is linked to South Oil Company, so they make their decisions and we have to adhere to their orders. So, if there are decisions and directions to connect the station to the national grid, then of course the company shall abide by such guidance.
Lukoil is also undertaking projects in the local community, including a plan to build sports stadiums in the West Qurna area; to provide hospitals with different medical equipment; and to provide local schools with desks and supplies.

AAI: What has the company done to hire local Iraqi workers?

VN: We have only accepted a small number of locals to our Lukoil staff. However, Lukoil has concluded contracts with several companies, and those companies have approached and appointed a large number of local workers, so the project has up to 500 local staff by now.

(The development contract includes) certain requirements for the purpose of developing the skills of local staff to become professionals, and the company is meeting those obligations


======


Call to freeze Kuwiti gas contract - MP
10/9/2011 5:38 PM

BAGHDAD / Aswat al-Iraq: White Iraqiya bloc MP Alia Nsaif called on the government to freeze Seeba Gas Field, which was initially signed with a Kuwaiti investment company, in an attempt to pressure Kuwait into discontinuing the implementation of the Mobarak terminal.

In a media statement made by the bloc today, as was received by Aswat al-Iraq, MP Nsaif added that the "response is to freeze oil contracts, particularly Seeba gas field, of which the contract is scheduled to expire in 2031.

"Kuwait is interested in the revenues of the gas field, making the best way to press Kuwait freezing the contract," she added.

The Iraqi government signed the contract for the Seeba gas field with Kuwait Energy, which was established in 2005.

She pointed out that boycotting Kuwaiti commodities should be attached to governmental directives to freeze these contracts.

Kuwait announced last April the building of Mobarak terminal one year after Iraq's announcement of intentions to build the Greater Fao Port.

Iraq rejected the project and demanded Kuwait abandon the scheme, but the latter refused these demands as "baseless."

====

Iraq oil hub Basra wants bigger say, more autonomy

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By Rania El Gamal

BASRA, Iraq | Mon Dec 5, 2011 12:46pm GMT

(Reuters) - Officials in Iraq's southern oil hub Basra are trying to cancel a $17 billion (10 billion pounds) Shell gas deal because they want a bigger say, highlighting the pressure on central government to ease its control over the provinces.

Basra, where dozens of international oil companies signed up to develop some of Iraq's largest oilfields, is increasingly restless with the slow pace of development in the province and wants more control over its natural resources and revenues.

Demands for more provincial power have simmered for years in Iraq, split by ethnic, sectarian and tribal tensions. But the Basra push and an autonomy drive from Salahuddin province threaten to stir tensions as the last U.S. troops withdraw.

The final contract with Royal Dutch Shell and Mitsubishi to capture flared gas in three southern Iraqi oilfields was signed on November 24 despite objections from the Basra local council that it was not included in talks or the deal's signing.

Officials from the Basra Provincial Council filed a lawsuit against the Iraqi Oil Ministry on November 25 demanding the cancellation of the gas agreement.

"In principle, we don't have any problem with developing the gas but when the contract is signed, there has to be an article that shows the provincial council has agreed ... Unfortunately, we did not know anything about this contract," said Sabah al-Bazouni, head of the Basra Provincial Council.

"Basra is the most suitable province to become an autonomous region."

Regional autonomy would give the province more power over finances, administration and laws, and an upper hand in supervising public property, which could loosen Baghdad's grip on the oil and gas sector.

The legal case is unlikely to deter Shell and delay the project, but it raises concerns about future disputes over oil and gas rights in Iraq, which is struggling to rebuild after years of violence just as Washington prepares for a full troop withdrawal by the end of December.

"Just as the constitution gave rights to the region, it also gave similar rights to the producing provinces ... Today, the Kurdish region signs a deal with ExxonMobil and the central government objects, it is double standards," said Bazouni.

Minority Kurds in the north of Iraq have enjoyed semi-autonomy for years since Western powers imposed a no-fly zone after the 1991 Gulf War. The Kurdish north is now seen as a model for other regions seeking more autonomy.

Iraqi Kurdistan was able to attract foreign investment and provide its residents with better security and living standards than in the rest of Iraq, where bombings and power cuts are a part of citizens' everyday lives.

But the Kurdistan Regional Government (KRG) and Baghdad are locked in a row over land and oil. The central government has objected to a recent deal between the KRG and U.S. oil giant ExxonMobil to explore for oil in the northern region.

Despite that, officials in Basra look to the KRG's experience and blame the lack of progress on political wrangling in Baghdad and rivalry among the Shi'ite Muslim, Sunni Muslim and Kurdish parties, each jostling for more power.

"Part of what drove us to demand regional autonomy is that political problems are usual in Baghdad not in Basra, where the governing parties are a known quantity," said Ghanem Abdul-Amir al-Maliki, a member of Basra Provincial Council.

"It is clear that the Kurdistan region is stable to a large degree because the governing parties there are a known factor ... In Baghdad, everyone is trying to please his own party on the account of others. We want to get rid of the political infighting in Baghdad by setting up a region."

SHARE OF OIL WEALTH

Provinces need a public referendum and parliamentary approval to attain regional autonomy. Prime Minister Nuri al-Maliki, who took part in writing the constitution in 2005, supports powerful central government.

His government has tried to quieten the autonomy movement, partly out of concern that it could lead to instability as the U.S. troop withdrawal picks up pace. The remaining 10,000 troops are scheduled to leave before December 31.

In October, the mainly Sunni Salahuddin province symbolically decided to declare the area autonomous. The move was criticised by Maliki.

In the mainly Shi'ite oil hub of Basra, autonomy talk has bubbled for years. Basra sent a formal request for autonomy more than a year ago, but has had no response from Baghdad.

The southern city used to be called "The Venice of the Middle East," but now, Basra's crisscrossed canals are filthy pools of stagnant water filled with heaps of rubbish.

Roads are damaged and only a few hours of electricity are provided every day.

Most of Iraq's oil exports come from the fields around Basra, but residents are fed up with shortages of power, water, jobs and housing. They complain they have seen little benefit from the oil wealth.

"Federalism is the solution. It has been eight years and Basra is still the same. The central government was not able to solve the problem of the electricity, water and other services in Basra," said Raied Khoudair, 34, a government employee.

"Until when Basra will remain the cow that Iraq milks for everything, and gets nothing from Iraq? We see the development in the Kurdistan region and the prosperity they live in, we are no less than them."

(Additional reporting by Aref Mohammed; writing by Rania El Gamal; editing by Elizabeth Piper)

====================

CORRECTED-BRIEF-Guide Exploration to buy certain natural gas properties Wed, Jan 04 17:06 PM EST- Jan 4 (Reuters) - Guide Exploration Ltd : * Announces agreement to purchase long life natural gas properties and $36.6 million bought deal equity financing * Deal for $61.5 million * The properties are currently producing approximately 20 mmcf/d of sweet natural gas (3,330 boe/d) * Says acquired properties are accretive on both a production and reserves per share basis * Acquisition will be funded by bought deal equity financing of $36.6 mln,co's credit facilities * Says acquired properties are expected to be accretive, on a cash flow per share basis, in 2012 * Says based on field production report estimates, 2011 exit production rate was approximately 12,000 boe/d * Says average 2012 production is expected to range from 15,800 to 16,600 boe/dUPDATE 1-Guide Exploration to buy natural gas properties for C$61.5 mlnWed, Jan 04 17:48 PM ESTJan 4 (Reuters) - Intermediate oil and natural gas company Guide Exploration Ltd said it agreed to buy certain natural gas properties in northwestern Alberta from a senior peer for C$61.5 million.============Gas fuels Kurdistan's power politicsThe processing facilities run by the Sharjah-based company Dana Gas at the Khor Mor field in Iraqi Kurdistan. (BEN VAN HEUVELEN/Iraq Oil Report)By BEN VAN HEUVELEN of Iraq Oil Report Published January 30, 2012 The Kurdistan region is emerging as a rare beacon of Iraqi stability and development – and while the most heralded reason for its success has been security, another key factor has been the creation of an electricity sector.The progress has been rapid. After the fall of Saddam Hussein, Iraq's central government began sending between 150 and 200 megawatts of electricity from Kirkuk up to the Kurdish centers of Erbil and Sulaimaniya – enough to give residents just a few hours of power every...===============SGC founded in 1983 by several companies such as Japanese Chioda, registered in 30th Jun/ 1998Productive Units of SGCNGL1, NGL2 in Khor al Zubair, built in 1983 by French Technip , capacity of 350 MMSCFD, the main function is to separate hydrocarbon liquids (broad-cut) from feed gas which extracted from the fields of southern rumaila and the product of dry gas, where send it to LPG where as dry gas use as a fuel inside, complex and operate other factories such as electricity, fertility, petrochemical plant, iron and steeel, which distributed by pipelines.Unit of Liquid Separating in Northern RumailaSimilar as above , capacity of 680MMCFD feed gas, extracted from the fields of Northern Rumaila. The broad-cut that produce from this unit is sent to LPG in Khor-Al-Zubair.LPG Units in the center of companyCapacity of 260T/ H to produce liquified propane, butane gas and trade gasoline for export through umm al Qasr, some percent distributed local refineries to improve gasoline specifications and use as fuel of vehicles.Bulk Storage and ExportIRT, IST, Cryogenic Tanks. This unit store and export propane, butane and gasoline. Stored in concrete reservoirs at low temperatures until shipping them by oil tankers. At present, the reservoirs are using as an additional energy for storage of liquid gas then pumped to cities by pipelines of reflexive pumping towards middle and north.Liquid Gas Loading PortCapacity of 480,000 cubic meters per hour for export the ultimate products by gas tankers and receive liquid gas and gasoline to meet domestic need.Committe of Gas TreatmentIt consists of compressor stations of southern and northern Rumaila which are affiliated to SGC. Jan1/ 2010.Compressor Stations in southern Rumaila are 4 stationsCenter Stations, Southern Stations, Al-Shamiah Stations, and Al_Grenat Stations, they receive first stage gas and other stage from separating gas stations then dehydrated it to decrease humidity ratio.SGCO_Office2009@SGCIRAQ.comWWW.SGCIRAQ.COM===Iraq's Oil Refineries to increase productivity beginning of this yearText size BAGHDAD: The productivity of Iraqi Oil Refineries is expected to increase in the beginning of the current year, with oil product that would cover a large part of the local needs for those products," the Oil Ministry's Official Spokesman said on Saturday."The Iraqi oil refineries have produced an average daily product petroleum (benzine) that had reached 12 millions and 700,000 barrels, whilst the gas-oil daily product had reached 19 million liters"Iraq had produced 7 millions and 800,000 liters of kerosene per day,," Assem Jihad told Aswat al-Iraq news agency, confirming that the said products would exceed the local needs for the oil products.He pointed out that "Iraq had produced 7 millions and 800,000 liters of kerosene per day," stressing that "the increase achieved in the oil products had been achieved thanks to the increased production by the oil refineries in the north, center and southern Iraq, and the improvement of the productivity and the maintenance of their units that helped to raise their productive capacity."Iraq imports 250,000 plastic gas cylindersText size BAGHDAD: Spokesman of the Iraqi Oil Ministry Asim Jihad announced that 250,000 plastic gas cylinders are to be imported within the 2012 budget.Jihad told Aswat al-Iraq that these cylinders will be equipped with a certain un-disposable material to prevent forgery and cheating so that to know the original from forged ones.He added that the ministry observed the entrance of 1 and a half million gas cylinders that contravened Iraqi standards.Jihad pointed out that the ministry imported 100,000 plastic gas cylinders.© Aswat Aliraq 2012==================.Oil project reveal the establishment of 24 tanks with a capacity of 350 thousand barrels Wednesday, February 1, 2012 14:36 Hits: 390 Twilight News / revealed the Ministry of Oil, Wednesday, has announced establishment of 24 oil reservoirs to accommodate all of which 350 thousand barrels, indicating it is the process of establishment of the four floating platforms export capacity of 850 thousand barrels each day.He said ministry spokesman Assem Jihad, the oil's "Twilight News", "The Oil Ministry and within its plan to increase the export capacity of Iraq's oil plans to establishment of 24 oil tanks can each of which 350 thousand barrels."Iraq is seeking through the development of oil fields and presented to the international companies, to reach the production rate of at least 11 million barrels of crude oil per day within the next six years, and to 12 million barrels per day after the addition of the quantities produced national effort of the other fields.And the Jihad, "The coming days will witness the establishment of 4 floating platforms on the southern ports and the ability of export 850 thousand barrels per day for each platform."The sources in the Ministry of Oil have shown, earlier, Iraq is expected to start exporting oil from the new port in the Gulf within ten days after the postponement of the opening of the end of the link and test tubes. Iraq currently produces about three million barrels per day while exports averaged 2.165 million barrels per day last year, according to data of Iraqi oil marketing company "Sumo."==============Chromotographic Gas AnalysisFEED GAS, Wet Purified Gas Pressure 3,18 Mpa, 500mlGas Pressure: 32.43 Kg/cm2, 32.12Gas Temp: 15 deg c. 30N 0.95, 0.73CO2 1.25, 0.86H2S 0.6, 2.5ppmvMETHANE 68.3, 70.42ETHANE 10.57, 15.37PROPANE 8.91, 7.93I-BUTANE 1.68. 1.01N-BUTANE 4.14, 2.34I-PENTANE0.98, 0.44N-PENTANE 1.06, 0.45HEXANES 0.88, 0.24HEPTANES 0.46, 0.10OCTANES 0.19, 0.07NONANES 0.03, 0.04TOTAL 100.00Gas Sp Grv calculated@15.6 =0.8782, 0.7955Gas M. Wt. calculated 25.44, 23.04Density Lbs/Scf=0.0668 . 0.0605Note: Concentration of H2s was measured at GC and Drager

===\\Tuesday, May 29, 2012 | 07:01 Beirut Subscribe to NOW Lebanon RSS feeds

NOW News
Iraq's Basra to make renewed push for autonomy
May 28, 2012 share
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A top politician in Iraq's oil-rich Basra province moved on Monday to give the area more autonomy from the central government, three years after the failure of a similar bid.

Basra provincial council chief Sabah al-Bazzouni told reporters he was making the push because of a prolonged political crisis that has seen Prime Minister Nuri al-Maliki threatened with a vote of no confidence and criticism that he has centralized power.

"We will call the members of the provincial councils, and the heads of the provincial councils, to announce a southern region," Bazzouni told a news conference in Basra.

The vast majority of the country's oil exports, upon which Iraq's budget is almost entirely dependent, pass through Basra.

"If they do not respond to this call, we will announce the region of Basra," Bazzouni said.

Iraq's constitution allows for any province or provinces to become an autonomous region, like the three-governorate Kurdish region in the country's north, by way of a referendum.

All that is required to trigger such a plebiscite is the approval by a tenth of the province's voters, or a third of that province's provincial council members.

In January 2009, Basra launched a petition to turn itself into an autonomous region, but failed to collect enough signatures.

Bazzouni said he was launching the effort for greater autonomy because of a protracted political crisis in Iraq, which has seen the Shia-led authorities issue an arrest warrant for the Sunni vice president.

Several key political leaders from various ethnic backgrounds and political parties have accused Maliki of violating the tenets of a power-sharing deal, and have threatened him with a vote of no-confidence.

In the run-up to the row, three majority Sunni Arab provinces in Iraq's north and west either voted to become regions or threatened to do so, but their calls for a referendum have so far languished.
@yesar @Annahar Most interesting aspect is Buzuni talks abt governors and councils in plural, signifying 3-governorate scheme back on agenda
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12h Reidar Visser Reidar Visser ‏@reidarvisser

@yesar @Annahar Noteworthy that some Maliki allies in Basra are in habit of reviving federalism scheme whenever Maliki is in serious trouble
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12h Reidar Visser Reidar Visser ‏@reidarvisser

‎@yesar‏ ‎@Annahar‏ وقال صباح البزوني في مؤتمر صحافي في البصرة: "سندعو المحافظين ورؤساء مجالس المحافظات لاعلان اقليم الجنوب"
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13h yesar yesar ‏@yesar

@Annahar #Annahar #Iraq source for Basra region tweet plz? @reidarvisser
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12h Reidar Visser Reidar Visser ‏@reidarvisser

@yesar @Annahar Headline seems exaggerated. Same old Buzuni saying we will call for the southern region (future tense)
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11:14 AM - 28 May 12 via web · Details
13h Reidar Visser Reidar Visser ‏@reidarvisser

@yesar Could you RT the southern federal region tweet please?
-AFP/NOW Lebanon

To read more: http://www.nowlebanon.com/NewsArticleDetails.aspx?ID=402317#ixzz1wECrWeKd
Only 25% of a given NOW Lebanon article can be republished. For information on republishing rights from NOW Lebanon: http://www.nowlebanon.com/Sub.aspx?ID=125478 == Shell to start pumping gas at southern Iraq project Wed, Jul 11 11:08 AM EDT BAGHDAD, July 11 (Reuters) - Royal Dutch Shell plans to start pumping gas from its southern gas joint venture in Iraq in the next three weeks at 60 million cubic feet per day, Iraq said on Wednesday. Hans Nijkamp, Shell vice president and country chairman for Iraq told Iraq Deputy Prime Minister for Energy Hussain al-Shahristani that output would be increased by another 40 million cubic feet several weeks after pumping starts, a statement from Shahristani's office said.