UAE's Dana Gas sees profits fall as receivables weigh

http://www.ekurd.net/mismas/articles/misc2013/11/invest932.htm November 4, 2013 DUBAI,— Dana Gas is continuing to struggle with large uncollected bills in Iraq as its profits fall and it pursues an arbitration case against the Kurdistan regional government KRG along with partners in a consortium that have significant operations there. Dana Gas made a net profit of 102 million dirhams ($27.8 million) in the third quarter compared with 104 million dirhams in the same period of last year, the United Arab Emirates energy company said on Monday. Gross revenues for the third quarter were 623 million dirhams, up 21 percent from 512 million dirhams a year ago. Delays in getting paid for operations in both Kurdistan and Egypt contributed to Dana having to restructure a $920 million Islamic bond in April and helped spark a legal battle with the Kurdistan region government KRG. Dana Gas said it had collected $8 million in Egypt during the third quarter but that the trade receivables from the North African country still grew to $298 million by the end of September, up from $262 million at the end of the second quarter. “We have been given strong indications by the Egypt government regarding planned payments in the next few months,” Dana Gas’ new chief executive Patrick Allman-Ward said. “We welcome this positive step as it will allow our capital and exploration expenditure to remain in-line with anticipated spending plans, allowing us to pursue our strategy of maximizing our production from these resources.” Egypt has struggled to meet its soaring energy bills over the last two years and owes energy companies a total of around $6.2 billion. In Kurdistan, Dana collected just $7 million in payments for fuel supplied to the autonomous region of northern Iraq during the third quarter,www.Ekurd.net so that payments due grew by $48 million over the three months to $450 million at the end of the third quarter. Dana, the largest oil and gas investor in Kurdistan, filed the first major legal case against the KRG over payments and production rights on Oct. 21. The Sharjah-based energy company saw its profit fall 45 percent in the second quarter of 2013, largely due to lower fuel sales prices and the mid-2012 shutdown of a liquefied petroleum gas (LPG) plant in Iraq after a fire. Repairs to the Khor Mor LPG plant were completed in July. Dana’s average production volumes rose by 17 percent, year on year, to 66,850 barrels of oil equivalent per day (boepd) in the third quarter, driven by a 30 percent rise in production in Egypt. However, net profit was reduced by higher royalty and depreciation charges. Dana’s share of production in the Kurdistan region of Iraq remained stable at 27,100 boepd. Copyright ©, respective author or news agency, Reuters | Agencies

Kurdistan Oil Minister: Dana Gas Breached Confidentiality, Owes KRG Significant Sums

Kurdistan Oil Minister: Dana Gas Breached Confidentiality, Owes KRG Significant Sums By RUDAW 2 hours ago “The ongoing breaches of the commitments owed by Dana Gas and its affiliates to the KRG have resulted in significant (and increasing) damage to the KRG,” says Mr. Hawrami’s letter. ERBIL, Kurdistan Region—Kurdistan’s Minister of Natural Resources, Ashti Hawrami, has dismissed as “inaccurate and misleading” claims by Dana Gas that the Kurdistan Regional Government (KRG) owes the company millions of dollars in overdue payments. “The statements made in the press briefing are materially inaccurate and incomplete,” says Mr. Hawrami in a letter sent to Dana Gas managing director, Majid Hamid Jafar. A Reuters report on September 26 said that the KRG owed Dana Gas $380-390 million in payments in return for fuel supplied to the autonomous region. “The KRG does not owe Dana Gas the sum referenced or any other sum, and the statement that the sums are “overdue” from the KRG is inaccurate and misleading to investors,” reads Mr. Hawrami’s letter, an exclusive copy of which was obtained by Rudaw. Dana Gas has been operating in the Kurdistan Region since 2007. According to the Reuters report, because of delay in payments in Kurdistan and Egypt, “Dana Gas become the first United Arab Emirates company to miss a bond redemption when it matured late last year,” ((3. The payment of an obligation, as a government's payment of the value of its bonds. 4. (Economics, Accounting & Finance / Banking & Finance) conversion of paper money into bullion or specie 5. (Economics, Accounting & Finance / Banking & Finance) a. removal of a financial obligation by paying off a note, bond, etc. b. (as modifier) redemption date [via Old French from Latin redemptiō a buying back; see redeem] )) The Kurdish Natural Resources Minister however, says the company’s action is “a breach of confidentiality duties owed by Dana Gas to the KRG,” “The ongoing breaches of the commitments owed by Dana Gas and its affiliates to the KRG have resulted in significant (and increasing) damage to the KRG,” says Mr. Hawrami’s letter. We require, he says, that Dana Gas desist from such breaches in the future. On Thursday, Goran Azad, an MP from the Patriotic Union of Kurdistan (PUK) and former member of the parliamentary Oil and Gas Committee told Rudaw TV, “We have got documents that says it’s Dana Gas that has not fulfilled its commitments to the KRG and that it’s Dana Gas that owes compensations to the Kurdish government.” Reuters reported that “The Abu Dhabi-listed company completed repairs to its liquefied petroleum gas (LPG) facility at the Khor Mor field in Kurdistan in mid July, but it has not restarted production because no buyers have contracted supplies from it yet.” But the Kurdish minister says, “It is Dana Gas and its affiliates that owe the KRG significant sums, not the other way around,” Mr. Hawrami’s letter goes on to say that to compensate losses caused by Dana Gas’s actions, “the KRG will retain the proceeds of condensate sales to protect its entitlement to adequate compensation.” Rich with billions of barrels of untapped oil and natural gas, the Kurdistan Region has become an attractive spot for many international oil giants, chief among them Chevron, Exxon Mobil and Total. - See more at:

The burning question of gas flares

The burning question of gas flares Chris Stanton May 22, 2010 It is one of the bitter ironies of the Gulf energy industry that it burns huge volumes of natural gas as waste despite a power crisis in the region and increasing global pressure on natural resources and the environment. Topic Dolphin Energy General Electric The Middle East as a whole ranked second in the world last year for wasting natural gas by burning it off instead of using it for power stations and industry. Each year, countries surrounding the Gulf flare 27 billion cubic metres, according to satellite data from Global Gas Flaring Reduction, an international organisation supported by the World Bank. That staggering sum is 30 per cent more than the UAE imports from Qatar through the Dolphin pipeline and is sufficient to supply a liquefied natural gas (LNG) plant with enough gas to produce 18 million tonnes per year for export, worth more than US$9.6 billion (Dh35.2bn) at current prices in Japan, the biggest market. As countries in the region face gas shortages and international criticism for their emissions of greenhouse gases, eliminating the waste should be the first logical step of any energy policy, experts say. "Gas flaring reduction is not just a technical issue that oil producers have to deal with, but it's a relevant solution in today's energy debate," says Paulo de Sa, the manager of the oil, gas and mining division at the World Bank. "Some countries use heavy fuel oil for power generation while still flaring associated gas. Generating electricity with gas that would otherwise be flared contributes to improving access to energy in the most efficient way possible." The practice of flaring only increases the region's carbon footprint, emitting about 80 million tonnes of carbon dioxide per year, based on World Bank figures, slightly more than the carbon emissions of Austria. Globally, flaring emits 400 million tonnes of carbon dioxide, roughly equivalent to the carbon emissions of France. Ending the practice in Iraq alone, which is planning to increase oil production as much as five-fold in the next two decades, would prevent forecast emissions of tens of millions of tonnes of carbon from entering the atmosphere, says Mounir Bouaziz, a vice president for new gas business at Royal Dutch Shell, the oil giant. "There are one or two elephants we can chase," he says. "The example of Iraq, we are talking about the equivalent of taking more than 4 million cars off the road, or reducing the amount of cross-Atlantic flights by 100,000 flights per year." Russia and Nigeria are the worst offenders, followed by Iran and Iraq. The oil industry is well aware of the arguments against flaring and is often quick to agree that action is needed, but say economic and logistical challenges stand in their way. Oil companies flare or vent gas when they lack the pipelines and other infrastructure to move it to where it can be used. Often, they say they are forced to flare because the source is a remote oilfield that is too small or far away from major infrastructure to make it practical to capture the gas. In such cases, additional investment is needed to make the capture of gas possible, they say. Gas also is flared at refineries as well as LNG and chemical plants as a safety mechanism to prevent a sudden rise in pressure. At Oman LNG, which operates a plant near Sur, flaring remains "a very important element of ensuring process safety", said Brian Buckley, the chief executive of the company. Oman is responsible for about 1.5 per cent of the gas flared worldwide, putting it in the top 20 flaring countries. It is joined on the list by Iran, Iraq, Kuwait, Qatar and Saudi Arabia. Page 2 of 2 The sultanate has reduced the practice by 25 per cent in the past five years, Mr Buckley says. John Malcolm, the managing director of Petroleum Development Oman, the country's largest oil company, plans to halve flaring in four to five years. In Qatar, Maersk Oil Qatar, a joint venture between the Danish company Maersk and Qatar Petroleum, has cut flaring from 5.6 million cu metres to 1.1m cu metres on the Shaheen oilfield, even as it expanded production, said Sheikh Faisal Al Thani, the acting managing director. "It shows you can [produce] more oil and less flaring," he said. Qatar Petroleum would encourage more flaring reduction projects, but was not ready to set a firm target at all its fields, said Saif al Naimi, the company's director of health, safety and environment regulation and enforcement. The UAE is the only major oil producer in the region not on the top 20 list, following the success of a dogged government policy in Abu Dhabi that has reduced flaring by the Abu Dhabi National Oil Company (ADNOC) by 98 per cent since 1990, said Ali al Jarwan, the general manager of Abu Dhabi Marine Operating Company (ADMA-OPCO), an offshore division of ADNOC. "If the gas plant is not available, we do not flare," he said. "If we don't have facilities we shut down production and we think about recovering production the next day or next week." Now ADMA-OPCO is looking to shift from minimal flaring to a zero-tolerance approach in five to seven years, he said. Initial rapid gains were a result of simple fixes such as better co-ordination between drillers and gas plant operators, but extinguishing the last flares will require large capital investments. Some of those investments may not prove cost-effective on their own, Mr al Jarwan noted, but were required by government policy. Across the wider region, many flaring reduction projects need an extra funding stream to offer sufficient returns to investors. International carbon credit schemes organised by the UN Clean Development Mechanism are one option, but the process is cumbersome and the rewards too uncertain for investors. So far only two flaring reduction projects having received credits since the programme began in 2005. Ultimately, projects across the region need another boost, which could and should come as part of a new international treaty on climate change under discussion this year, says Sam Nader, the director of Masdar Carbon, a division of the Abu Dhabi Government's clean energy company. "Gas-flaring reduction should be among the first to be considered for finance by the international treaty under the global agreement," he says. "The two most important goals in this decade are energy efficiency and energy access, and gas flaring meets both. You have energy access, access to saved gas and mainly these are developing countries that can make use of the gas for their communities … secondly, energy efficiency, optimising your hydrocarbon production." For Abu Dhabi, one of the largest oil exporters in the world, gas flaring reduction also meets a third priority, he says, which is to clean up the hydrocarbon industry. "Prolonging the life of the hydrocarbon industry is of prime concern to us in Abu Dhabi," he says.cstanton@thenational.ae Read more: http://www.thenational.ae/thenationalconversation/industry-insights/energy/the-burning-question-of-gas-flares#ixzz2IVjxwpD5 Follow us: @TheNationalUAE on Twitter | thenational.ae on Facebook =========== UPDATE 3-Dana creditors talk tough after Islamic bond miss Thu, Nov 01 09:53 AM EDT * Dana says in talks to amend, extend sukuk terms * Bondholders to claim Dana's Egyptian assets - source * Company missed $920 million outstanding payment on Wednesday * Shares suspended on Abu Dhabi bourse By Dinesh Nair DUBAI, Nov 1 (Reuters) - The United Arab Emirates' Dana Gas failed to repay a $920 million Islamic bond on maturity, prompting a source close to holders of the bond to say they will stake claim to the natural gas producer's extensive Egyptian assets. Dana, a leading Middle East natural gas company, said on Thursday it was in talks with bondholders to amend and extend the terms of the bond, or sukuk, after it became the first firm from the UAE not to repay a bond on maturity. But a source close to the creditors said Dana sukukholders are determined to go after the assets used to back the issue. "Bondholders will now pursue an enforcement of Egyptian assets and pursue their unlimited recourse $1 billion claim against Dana Gas PJSC," the source said, declining to be named. Dana has operations in Egypt and Iraq, is listed on the Abu Dhabi stock exchange and is headquartered in the emirate of Sharjah. The Abu Dhabi bourse suspended Dana shares on Thursday, pending clarification on the Islamic bond. Although indebted firms in the Gulf Arab state have extended maturities on billions of dollars in bank loans since the onset of the world financial crisis of 2008-09, no sukuk have been restructured or unpaid on maturity. There are very few private corporate bonds or sukuk outstanding in the UAE, as most issuance has so far been from the state, or state-linked entities, and financial institutions. Other bonds and sukuk in the Gulf Arab region did not appear to be affected by the non-payment of Dana's sukuk. Islamic finance, launched in its modern form in the 1970s and estimated to have global assets of over $1 trillion, offers investments that comply with Islamic law which bans interest or investing in industries that involve gambling or alcohol. Sukuk are one of Islamic finance's highest profile products. Some in the industry claim sukuk are safer than traditional bonds because they are effectively certificates of ownership in a real asset and not pure debt. The Dana saga is not expected to have any significant impact on sukuk issuance or prices because the firm, a relatively small one compared to other issuers, is seen as a special case not representative of Gulf economies which are growing strongly. Dana, which is privately owned, is not seen as a strategic entity for the UAE so any government support is unlikely. NO MAJOR CONTAGION

"We haven't seen any major contagion in the Gulf bond and sukuk markets from this news. Frankly, institutional investors appear to be taking this in their stride," Chavan Bhogaita, head of markets strategy at National Bank of Abu Dhabi, said. "Telling investors that they have successfully paid all coupon payments thus far and are committed to a consensual arrangement is pretty lame. Bottom line is that they (Dana) didn't pay the $920 million that was due yesterday," Bhogaita said. Dana has a three-day grace period to make the payment but "appear unlikely to do so," the source added.

The UAE's largest listed natural gas firm, hit by payment delays from Egypt and Iraq's Kurdistan region, said it had also missed an $18.75 million accrued profit payment due Oct. 30 on the five-year sukuk, issued with a 7.5 percent coupon. It had repurchased $80 million of the $1 billion bond in 2008. Dana said it had paid $356 million to bondholders over the last five years. "Dana Gas is in ongoing discussions with an ad-hoc committee of sukuk holders over terms to amend and extend the sukuk," it said in a bourse statement. Bondholders have yet to issue a formal statement. The convertible sukuk has gained global interest as most of the debt is said to be owned by big investment firms including BlackRock Inc and Ashmore Group. The sukuk is secured against Dana's Egyptian operations, Sajaa Gas Private Ltd, a gas processing and sweetening plant in Sharjah, and United Gas Transmissions Co, a pipeline project to supply Iranian gas which is yet to start up. Sources told Reuters on Tuesday that Dana would not repay the sukuk on the Oct. 31 maturity. They said the two sides had entered a so-called standstill, valid for up to six months, in early October to allow talks to continue. PAYMENT DELAYS Dana's problems worsened in 2011 after political unrest in the region led to payment delays from Egypt and Iraq's Kurdistan region. It had outstanding receivables of 754 million dirhams ($205 million) in Egypt and 1.33 billion dirhams in Kurdistan as at Sept. 30. Dana said liquidity challenges, mainly due to non-payments from Egypt and Kurdistan, are "short term" and it is committed to finding a consensual solution with the bondholders. In May, Dana said it had hired Blackstone Group, Deutsche Bank and law firm Latham & Watkins as advisers. Investors have hired Moelis and law firm Linklaters. Dana's shares and sukuk have been under pressure on investor worries of non-payment of the outstanding bond. The sukuk, which is lightly traded, was quoted at 66 cents to the dollar according to prices from Nomura Holdings, unchanged from Wednesday's close. It was quoted at 78 cents to the dollar earlier in the week but slumped after reports of non-payment. "This was well-flagged and with the restructuring, sukuk holders will be looking at any way Dana can monetise its assets," said Amer Khan, fund manager at Shuaa Asset Management. In a separate statement, Dana said its third-quarter net profit fell 27 percent to 104 million dirhams from 143 million dirhams a year ago. Its cash balances stood at 516 million dirhams as of Sept. 30. Revenue for the period fell 21 percent to 512 million dirhams, due to a decline in Egypt production and lower hydrocarbon prices, Dana said. ============== Regulation & Environment: Australia’s coalseam-to-LNG companies stand up By News Desk | May 20, 2013 12:01 AM Comments (0) Companies looking to turn Australian coalseam gas into LNG for export are facing increasing resistance from environmental groups. In this week’s Regulation & Environment column in Oilgram News, Christine Forster discusses how producers are pushing back. ——————————– Some of the companies building massive new coalseam gas-to-LNG projects in the eastern Australian state of Queensland have gone on the front foot to counter what they describe as anti-development activism. BG subsidiary QGC has been particularly vocal among the players, who are fighting back against criticism in social and traditional media of the rapidly expanding industry’s environmental footprint. QGC is building the $20.4 billion Queensland Curtis LNG project on Curtis Island in Gladstone. The 8.5 million mt/year facility will be the world’s first CSG-based LNG plant when it starts up in 2014. Two other LNG plants are being constructed on Curtis Island. All three will be fed with CSG from thousands of wells in Queensland’s Bowen and Surat basins. Origin Energy and ConocoPhillips are developing the $24.7 billion Australia Pacific LNG project, with a capacity of 9 million mt/year, and a Santos-led group is working on the 7.8 million mt/year Gladstone LNG plant. Those two facilities will start up over 2015-2016. In recent weeks, QGC has railed against federal government plans to regulate CSG projects which impact water resources, and to monitor fugitive emissions from CSG wells. BG Group Australia Chairman Catherine Tanna, at a recent speech to the American Chamber of Commerce in Australia, criticized increasing regulation of the industry, pointing at the federal government’s planned changes to its Environment Protection and Biodiversity Conservation Act to include a so-called “water trigger.” That move took the industry by surprise, coming as an additional layer of regulation on top of the requirements of the state governments. The EPBC Act amendments, proposed by the Labor government of Prime Minister Julia Gillard, were debated in the Senate on May 14 and look set to be passed with support from the Green party and unaligned parliamentarians. The opposition Liberal National Party Coalition opposes the bill. “The gas industry has been criticized on many fronts,” Tanna told the AmCham event. “Very occasionally that criticism is warranted and the industry has been quick to remediate. A lot of what is said, though, is highly questionable, and propagated without challenge to the point where activism determines public policy; where the tail wags the dog.” ——————————–

Tanna argued that rather than “poisoning” aquifers, and “alienating” farm land, the CSG industry reduced the pressure on stressed aquifers by purifying salty coalseam water and providing it to farmers and local towns. “It is water that otherwise would not be available for any use,” she said. “If these proposals were, therefore, designed to protect Australia’s water resources, they fail on this logic alone. They were clearly not introduced to deal with an environmental problem. They were introduced to appease activists.” “That is a measure of what is at stake when we have decision making on this basis; when green activists and their supporters deliberately misinform; and when motives and charges go unquestioned and unchallenged,” Tanna said. “Just as it is right that our industry be scrutinized and held to account, so, too, should our critics.”

QCLNG will add $32 billion to the Queensland economy in its first 10 years. QGC has also hit out at proposed federal regulations to measure fugitive emissions of CSG from gas production, saying the costs of implementation outweigh any environmental or revenue gain. The regulations, to be introduced from July 2013, have been applied after nearly a year of public consultation during which the government received only 17 submissions, with gas companies given just a month to comment, QGC said. Santos has also pitched into the debate, running newspaper advertisements last month in response to a critical report on high-profile Australian Broadcasting Corporation television program 4 Corners. “The Santos GLNG project in Queensland was subject to an extremely comprehensive environmental approval process,” CEO David Knox said in the advertisement. “Rather than being rushed, as claimed by 4 Corners, this process took over four years to complete between 2007 and 2010, involved 20,000 pages of environmental submission and resulted in 1,200 specific environmental conditions.” The upstream peak industry body is also campaigning hard, releasing a steady stream of statements refuting the environmental lobby’s claims, including its “shameful scare campaign” on the human health impacts of the CSG industry. But the industry might soon get its wish, with a return to a streamlined approvals process concentrated in the hands of the states. That is the system backed by the federal LNP opposition, widely tipped to oust the minority Gillard government in a general election scheduled for September 14 this year. –Christine Forster in Sydney

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
Opinion Strong BUY
Votes for this Posting Voted 7 times.
Message
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

• Link this
• Share this
• Digg
• Email
• Print

Related Topics

• Business »
• Iraq »

Quotes

Mitsubishi Corp

8058.T

¥1,630

-4.00-0.24%

06:00:00 BST

Royal Dutch Shell Plc

RDSA.L

2,253.50p

+14.50+0.65%

13:11:33 BST

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
Print Save as PDF Email

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
View conversation

Reply
Retweet
Favorite

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
View conversation

Reply
Retweet
Favorite

12h Reidar Visser Reidar Visser ‏@reidarvisser

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

Reply
Retweet
Favorite

13h yesar yesar ‏@yesar

@Annahar #Annahar #Iraq source for Basra region tweet plz? @reidarvisser
Expand

Reply
Retweet
Favorite

12h Reidar Visser Reidar Visser ‏@reidarvisser

@yesar @Annahar Headline seems exaggerated. Same old Buzuni saying we will call for the southern region (future tense)
Hide conversation

Reply
Retweet
Favorite

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.