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...

China’s CNPC Seen Tapping Exxon-Rosneft Assets: Real M&A ; Understanding Mr Darcy

Votes for this Posting Voted 4 times. Message China’s CNPC Seen Tapping Exxon-Rosneft Assets: Real M&A By Aibing Guo & Zijing Wu - Aug 6, 2013 7:27 AM GMT China National Petroleum Corp. already spent more money this year on energy assets than any other global producer. Oil and gas fields controlled by Exxon Mobil Corp. (XOM) and Russia’s OAO Rosneft may be next on the list. China’s largest oil producer, known as CNPC, has made more than $9 billion of purchases this year -- and has considered another $4 billion, according to people familiar with the matter -- as part of a plan to double overseas output by 2015. Spending will likely accelerate under Zhou Jiping, who was named chairman in April and has more than a decade of experience in international operations, CLSA Asia-Pacific Markets said. CNPC is ramping up deals to make up for lost ground after Sinopec Group and Cnooc Ltd. (883), two other Chinese state-owned energy companies, outspent the producer by about $50 billion on overseas transactions in the five years through 2012, according to data compiled by Bloomberg. CNPC’s success with mature fields makes an Exxon asset in Iraq a target, Sanford C. Bernstein & Co. said, while a supply agreement with Rosneft may lead to deals with the state-controlled Russian producer, according to UOB-Kay Hian Ltd. “CNPC’s skill set makes it a good fit for many developed onshore oilfields in central Asia, the Middle East and South America,” Neil Beveridge, a Hong Kong-based oil and gas analyst at Bernstein, said by phone. “CNPC’s state-owned background is more of a bonus rather than a burden when it seeks acquisitions in those regions.” Oilfield Experience At its Daqing field, discovered in the Heilongjiang province of northeastern China in 1959, CNPC has gained “world class” experience at extending the life of oilfields, Beveridge said. The company also drills for oil in Syria, Sudan, Iraq and several central Asian countries. CNPC plans to increase overseas production to 200 million tons by 2015, about twice what it produced abroad last year. Output from fields outside China may account for 60 percent of production by the end of the decade, former Chairman Jiang Jiemin said in January. The proportion was 37 percent in 2012.

Jiang this year became head of China’s State-owned Assets Supervision and Administration Commission. His replacement, 61-year-old Zhou, previously led CNPC’s overseas division. “Zhou’s expertise in international business will help CNPC’s international expansion,” Simon Powell, an analyst at CLSA in Hong Kong, said in a phone interview.

Liu Weijiang, CNPC’s Beijing-based spokesman, said the company doesn’t comment on speculation. Supply Needs To supply the world’s largest consumer of energy, Chinese companies announced at least $108 billion of overseas purchases in the five years through 2012, about one fifth of the total spent by energy companies worldwide on cross-border acquisitions, data compiled by Bloomberg show. While CNPC spent more than $16 billion, Sinopec Group -- officially known as China Petrochemical Corp. -- and Cnooc, China’s second- and third-biggest oil and gas producers, spent $41 billion and $26 billion respectively, the data show. The Cnooc total includes purchases by parent China National Offshore Oil Corp. This year, CNPC has struck at least $9 billion of deals, including a $4.2 billion purchase of a stake in Mozambique’s Rovuma fields, the data show. The 2013 total also includes a stake in Kazakhstan’s biggest oil field worth about $5 billion. The Chinese producer is considering buying Petroleo Brasileiro SA assets in Colombia and Peru with a value of about $2 billion, people with knowledge of the matter said last month. CNPC also held talks to buy Brazilian oil startup Barra Energia Petroleo e Gas for about $2 billion, people said in May. Crude Prices Crude oil prices may help, said Wu Fei, a Hong Kong-based analyst at Bocom International. Brent dropped to an average of about $107 a barrel this year, from $111.7 in 2012. “CNPC may want to get some deals done quickly while Brent stays relatively stable,” Wu said by phone. “China needs to import the fuel no matter what crude prices may change to.” CNPC’s experience in Iraq makes the company a candidate to buy Exxon’s 60 percent stake in the West Qurna-1 field in southeastern Iraq, said Laban Yu, a Hong Kong-based analyst at Jefferies Group LLC. CNPC produces about 1.65 million barrels of oil a day from Iraqi projects, the company said last October. The Exxon asset is near the Rumaila field run by CNPC and BP Plc (BP/), and may produce as much as 600,000 barrels of oil per day by the end of 2013, Exxon has estimated. Iraq’s government has asked Exxon to abandon projects in the semi-autonomous Kurdish region in the north, or exit projects in the south. Other Bidders? “CNPC could take over the operation by moving its personnel and equipment from the nearby Rumaila site and start commercial production right away,” Bernstein’s Beveridge said. Exxon’s stake would cost at least $3 billion, he said. David Eglinton, an Exxon spokesman, declined in an e-mail to comment when asked whether the Irving, Texas-based company has held talks with CNPC over its West Qurna-1 stake or is trying to sell it. There may be other bidders. PT Pertamina, Indonesia’s state-owned oil company, was in talks with Exxon to buy as much as 20 percent of the West Qurna-1 field, the Indonesian government said in March. Natural gas projects owned by Moscow-based Rosneft, close to a pipeline connecting Siberia and the Pacific, may yield targets after CNPC and Rosneft signed a $270 billion oil-supply agreement in June, according to Shi Yan, an analyst at UOB-Kay Hian in Shanghai. The 25-year deal will supply about 360 million metric tons of crude to China, Russian President Vladimir Putin said on June 21. Rare Opportunity Officials at Rosneft didn’t immediately respond to requests for comment about a potential deal with CNPC. Any deal with Rosneft would be “in the range of billions of dollars” given the size of the projects, Shi said. “A majority ownership in the resources would allow CNPC to control some of the best upstream natural gas assets,” Shi said. “The opportunity to buy a quality asset at a reasonable price is rare, after most in easy-to-reach areas have long been controlled by established oil companies in the West.” ==================== Wed 21:25 Latest shareholdings update scaramouche 33 I note that the list of largest shareholders has been updated on the GKP website, showing figures as at 18 July 2013 http://www.gulfkeystone.com/securities.aspx Details are as follows with apologies if the formatting does not come out perfectly! Number of shares in issue as at 18 July 2013: 887,686,957. Of the shares in issue 33,564,740 (3.78%) were considered not to be in public hands. Insofar as is known to the Company, the identities and percentage holdings of Gulf Keystone’s significant shareholders (3% or more) are shown in the table below: Rank Shareholder 18 Jul 2013 % 1 TD Waterhouse 59,636,473 6.72% 2 Barclays Wealth 53,759,397 6.06% 3 Capital Research Global Investors 49,596,975 5.59% 4 M&G Investment Mgt 47,973,877 5.40% 5 Halifax Share Dealing 40,239,901 4.53% 6 Hargreaves Lansdown Asset Management 39,062,422 4.40% Previously, the Annual Report (which came out on 20 June 2013) http://www.investegate.co.uk/gulf-keystone-petrol--gkp-/rns/2012-results-announcement/201306200700114413H/ showed ‘Significant shareholdings’ at 31 May 2013 as follows… TD Direct Investing 59,123,475 6.66% Barclays Wealth 54,036,195 6.09% Capital Research Global Investors 49,596,975 5.59% M&G Investment Mgt 45,350,000 5.11% Hargreaves Lansdown Asset Management 37,838,687 4.26% Halifax Share Dealing 31,964,809 3.60% Selftrade Investments 30,631,160 3.45% From this, we can see... ‘Halifax share dealing’ has increased by about 8.25 million shares, while ‘Selftrade’ has unexpectedly fallen below the 3% reportable threshold, which would represent a decrease of at least 4 million shares. TDW, Barclays, Halifax and Hargreaves Lansdowne now total 21.7% so, IMHO when other brokers like Selftrade that are also commonly used by PIs are added in, it is likely that the overall PI holding is around 25-30%. This figure has remained pretty similar for some time so there seems to be little evidence of PIs beiing gradually eased out or the oft-repeated theory that there will be very few Pis left at the end! Most seem to be 'hanging' on come what may IMHO. M&G Investment Management's holding showed an increase of about 2.62 million shares in the 7-week period leading up to the AGM, while Capital's figures were unchanged. GLA, scaramouche =============================== STOCKS NEWS Reuters Results diary Europe Real-time Equity News UK Stocks on the move UK smallcaps UK smallcaps news 13:07GMT 26May2010-Afren rises; RenCap initiates with "buy" ----------------------------------------------------------- Shares in Nigeria-focused oil explorer Afren rise 12 percent as the oil price climbs 3 percent and Renaissance Capital initiates coverage with a "buy" rating. "Exceptional production growth from current developments will put the company in a different weight class, likely becoming one of the top-20 independent oil producers in Africa," says Renaissance Capital analyst Dragan Trajkov. An analyst at Evolution Securities says the recovery in the oil price combined with the note pushes up Afren's shares, rather than any company-specific news. For more, click on Reuters messaging rm://sarah.young.thomson reuters.com@reuters.net 11:14GMT 26May2010-BP down, uncertainty surrounds plug attempt -------------------------------------------------------------- Shares in oil major BP fall 0.3 percent, lagging a 2 percent rise in both Britain's FTSE 100 index of blue chip companies and the European index of oil and gas companies. BP is trying to stop oil gushing into the Gulf of Mexico as the leak from a ruptured well there threatens to become the largest oil spill in U.S. history. "Until we get some sort of positive news out of BP, the market's going to be pretty down on them," says Arbuthnot Securities analyst Dougie Youngson. The British company faces a pivotal day on Wednesday as its latest attempt to control the leak by plugging the well with heavy fluids, the so-called "top kill" option, gets underway. "There's a bit of doubt coming through from BP about whether this top kill is going to work," says Panmure Gordon analyst Peter Hitchens. For more please click on Reuters messaging rm://sarah.young.thomsonreuters.com@reuters.net 10:58GMT 26May2010-UK small caps up 0.7 pct at midday ================ West house securities Two points: first, brokers exist to have opinions and to attempt influence behaviour ...they are no different to advertising agencies and must have an angle ... theirs/his is Afren. Lets grab some attention by initiating "coverage" by being the ONLY broker out of 50 listed to put a sell rating on GKP ...oh and let's use it as a means of advertising Afren as our preferred choice. The guy at Westhouse who covers Afren is just another salesman, Dragan Trajkov http://westhousesecurities.com/profile.asp?user=92 whose previous experience was covering African oil plays ...so probably has a cosy relationship with Afren from his days in Renaissance Capital http://www.iii.co.uk/investment/detail/?isplay=news&code=cotn:AFR.L&action=article&articleid=7912710 ... So lets dis one of the biggest, high profile and volatile Kurd plays to promote one we have a relationship with from the past and so generate some attention and hopefully some business for Westhouse .... He's a player like everyone else in the city... Secondly ... who thefeck are Westhouse Securities! Another city game ....but a rather silly looking one to me .... ============== Oil, Sustainable Development, and the Transformation of Iraq Posted on 07 August 2013. Tags: Ahmed Mousa Jiyad By Ahmed Mousa Jiyad. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News. Oil, Sustainable Development and the Management of the Transformation in Iraq This contribution is based on PowerPoint presentation delivered before the Symposium “Iraq – 10 Years On” held at Tahrir Campus of the American University in Cairo (AUC) on 3rd and 4th June, 2013. I - Introduction As this conference is about Iraq it is therefore expected that other contributors would address sustainable development from different aspects and disciplines using probably different methodologies, terminologies and statistical data. This presentation focuses on energy and more precisely on petroleum. And from this perspective sustainable development is taken within the context of the depleting finite natural resources in the country. The presentation begins by outlining briefly the conceptual and analytical framework of sustainable development, in a rich deplete-able natural resources developing country, as a process of transformation through horizontal and vertical structural diversification. Then it uses “budget analysis approach” to draw few conclusions on whether “horizontal diversification” in the economy had occurred during the last ten years commensurate with the availability of the necessary development financing. A more detailed analysis of the efforts in the petroleum sector was provided to assess the “vertical diversification” in this important sector. The presentation argues that the lack of and imbalances in both horizontal and vertical diversification during the last ten years had undermined the sustainable development prospect, entrenched the dependency on upstream petroleum subsector and pushes the economy further in the web of rentierism. However, the recent launching of the first ever energy strategy might bring some sense to development planning in the country. Hence the presentation suggests and highlights the urgency for adopting different and diversified strategies to manage the production of petroleum and the associated influx of export revenues. Moreover, it introduces and outlines the importance of full transparency of all resources and payments flows within the “Value Cycle” during the duration of the related projects. Finally, the presentation ends with few concluding remarks. The full paper can be downloaded here. Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya@online.no). ============ Author Dalesmann View Profile Add to favourites Ignore Date posted Thursday 10:52 Subject Understanding Mr Darcy Votes for this Posting Voted 81 times. Message I'm afraid this is rather long! GRH has been banging on about this for some time ! The last Competent Persons Report was back in 2010. Why so long between updates I hear you cry. This was the Ryder Scott report, which was technical in nature and hard to understand – well it was for me! It does however contain some colourful language like ‘’world class” But world class what? Here is an extract from page 11 The Completion Test and the Extended Well Test run after the well was cased over the Sargalu, ……..it did suggest extremely high reservoir permeabilities possibly at the high end of reservoirs found in the world. Well I liked the last bit – it sounds very encouraging. I understand DST – Drill Stem Test and I understand the difference between porosity and permeability so far so good. On page 10 we learn a bit more about the tests – its depth – the loss of drilling fluid, the flow rates and the pressure tests. Ryder Scott then moves on to comment on the Extended well test We learn that for the Sargalu analysis of the test data indicates a permeability of 9.8 Darcies and a skin factor of +56. What is all that about? Well a little bit of googling gives us the definition of darcies. Slumberger say it should be spelt Darcys but we will let that pass. Whats a Darcy? From Wiki A darcy (or darcy unit) and millidarcy (mD) are units of permeability, named afterHenry Darcy. They are not SI units, but they are widely used in petroleum engineering and geology. Rock permeability is usually expressed in millidarcys (mD) because rocks hosting hydrocarbon or water accumulations typically exhibit permeability ranging from 5 to 500 mD. The odd combination of units comes from Darcy's original studies of water flow through columns of sand. Water has a viscosity of 1.0019 cP at about room temperature. So Ryder Scott is saying that the analysis of the test data from the Sargalu indicates a permeability of 9.8 Darcies (9800 milli darcies) and a skin factor of +56. That is HUGE! – Wiki says that rocks hosting hydrocarbon or water accumulations typically exhibit permeability ranging from 5 to 500 mD. So the Sargalu exhibits 18 times the permeability found in typical rocks. Again from Wiki. Permeability Permeability is a property of rocks and is an indication of the ability for gases or fluids to flow through rocks. High permeability will allow fluids and gases to move rapidly through rocks Permeability is affected by the pressure in a rock. The unit of measure is called the darcy, named after Henry Darcy (1856) Sandstones may vary in permeability from less than one to over 50,000 millidarcies (md). Permeabilities are more commonly in the range of tens to hundreds of millidarcys If we move on to the Kurre Chine A we find that the permeability as measured by Darcys has declined to 5 but this is still 10 times that of a typical reservoir rock. The viscosity has increased to 39 API as opposed to 18 API in the Sargalu. Lighter oil was found in the Kurre Chine B. Here we learn that the permeability is down to 322 milli Darcies. But the oil is light - 59 API – almost a condensate and the well flowed extremely well. There was a much greater GOR, Gas to oil ratio . Well how does this compare with other mega fields? GRH pointed to Ghawar in Saudi. 5 major sub sections are attributed to Ghawar The have reasonably light oil of around 34 API and a permeability measured in MD – around 600- 650 MD on average. The reservoirs have been producing since the 1940s! So what if anything can we conclude from this short foray? Well the Shaikan reservoirs appear to be very highly fractured carbonates (Limestones and Dolomites). W knew that. The permeability appears to be world class. What we don’t know is the extent of these fractures. Consider a map of Britain. Add in the motorways Fill in the trunk roads, the A roads. Now add in the plethora of B roads And finally the tiny C roads. The vast majority of the UK would be covered by a complex inter connected road network which in turn is connected to many arterial route ways. This network is dense. If the fracturing at Shaikan is like this then I would expect the recovery factor to rise as oil flows down the well defined route ways into the well bore. There will of course be certain regions say the NW Highlands of Scotland that will not have the density of roads compared to those around our major cities but there will still be some trunk roads and some highways and byways to allow the vast areas of the Highlands to be accessed. If we move to Texas there will still be the network of arterial routes but the density of the road network as you move away from the cities reduces. If this is the model for Shaikan then the permeability will be less and the RF is less likely to rise. A simple analogy but its one I find useful. Ryder Scott comment on the lack of water being produced at the surface. They don’t talk about a regional aquifer but should one exist then the ability to maintain pressure in the various reservoirs must mean that the RF will increase. Returning to Ryder Scott Ryder Scott is saying that the analysis of the test data from the Sargalu indicates a permeability of 9.8 Darcies and a skin factor of +56. We now know something about Darcies but what is this term skin factor? http://www.ogj.com/articles/print/vol-110/issue-8/drilling-production/new-method-evaluates-efficiency.html Introduction to skin factor - nothing to do with Amber Solaire! As a consequence of drilling and completion operations, most wells have reduced permeability near the borehole (skin zone). At oil-water production the radius of the skin zone increases over time. It is known that reservoir waters associated with oil-bearing formations contain a variety of dissolved solids (scales). At simultaneous production of oil and water, precipitation of scales occurs In the vicinity of the well the pressure logarithmically increases with the radius. As a result deposition of scales mainly occurs near the wellbore. Due to partial blocking of pores a skin is created whose size increases with production time. Deposition of scales in the pores greatly reduces the permeability of formations around the wellbore. This results in pressure loss through the skin and a corresponding reduction in well productivity. Well stimulation through acidizing or hydraulic fracturing can improve well productivity even above production levels in undamaged conditions. Quantitatively, the skin is defined as a parameter (skin factor), which depends on the thickness and the effective permeability of the skin zone2 (Equation 1). Now that’s interesting as scaling appears to be increased by water being present. But at Shaikan no water has yet been reported and it is thought that the reservoirs may be full to spill. However RS says that the Sargalu had a skin factor of +56. Whats that mean http://www.ogj.com/articles/print/vol-110/issue-8/drilling-production/new-method-evaluates-efficiency.html http://en.termwiki.com/ENkin_factor skin factor A numerical value used to analytically model the difference from the pressure drop predicted by Darcy law due to skin. Typical values for the skin factor range from -6 for an infinite-conductivity massive hydraulic fracture to more than 100 for a poorly executed gravel pack. http://www.pe.tamu.edu/blasingame/data/z_zCourse_Archive/P620_02C/P620_02C_Exam_2/SPE_xxxxx_VE_Skin_Effect_WBS.pdf The pressure drop in a well per unit rate of flow is controlled by the resistance of the formation. The viscosity of the fluid , and the additional resistance concentrated around the well bore resulting from the drilling and completion techniques employed and perhaps from the production practices used. The pressure drop caused by this additional resistance is defined as the skin effect . This skin effect considerably detracts from a wells capacity to produce. ------------------------------------------------------------------------------------------------------- At Shaikan we have seen little in the way of formation water and yet we have a high skin factor. it is possible that this high skin factor was caused by drilling mud and associated liquids being pumped into the fractures effectively blocking them. Was it SH4 that had an acid treatment to counteract this and we all know what effect that had. SH4 is huge. All of which only scratches the surface of the Ryder Scott Report. There are many members of this board who have far more knowledge than I. So the following conclusions are from a drilling novice and I’m happy to be corrected. 1. The permeability at Shaikan is VERY high when compared to Ghawar. 2. The skin factor noted by Ryder Scott could be due to blocking of the fractures by drilling mud 3. The wells can be cleaned up and better flow rates accomplished. 4. There is the possibility that the RF will rise over time as the fracture system and associated matrix is better understood 5. The Shaikan Reservoirs are remarkable – absolutely world class. Kind regards Dalesman ============================ Interesting stuff Dalesman but we should not compare Shaikan to Ghawar and if some on here have been doing they're giving out serious misinformation. The Ghawar field produces from the Arab D formations which are Jurassic limestones (as is the Sargelu of course) but they are VERY different formations. The main difference is that the primary porosity in the Arab D formation is within the rock itself. It is composed of mainly very fossiliferous limestones with not a lot of good matrix holding these together so in effect it's like a sponge made up of all manner of small and large fossils with lots of gaps between them. The Sargelu is much more fine grained and does not have anything like the same high level of primary porosity. Instead it has secondary porosity (and permeability) which comes from the fractures. If the fracture network is really extensive it can make for excellent production, but, unlike the Ghawar reservoirs, fractures can be localised and it's possible to have wells where the fracture network doesn't intersect the well path and then you have very low production (or none). The extremely high permeabilities (as in darcies not millidarcies) is misleading in a way as this reflects the fractures. High permeability in Ghawar reflects the whole reservoir; this can be quantified much more accurately than a reservoir relying on fractures alone. The Kurra Chine is a dominantly Dolomite reservoir and this differs from the limestones of the Sargelu. Dolomites are often found to be crystalline and have excellent primary porosity between the individual crystals. Imagine a lump of coarse brown sugar (Kurra Chine) compared to a broken paving slab (Sargelu). With the high API (as you say, pretty much condensate) and a good thickness of this, and with high primary porosity and permeability, this only bodes very well indeed! (hence why the current well is so important) ====================

Gulf Keystone doubles down on Kurdistan: we find one billion barrels here, one billion barrels

Author carillion View Profile Add to favourites Ignore Date posted today 08:36 Subject Iraq Oil Report View parent message Votes for this Posting Voted 164 times. Message http://www.iraqoilreport.com/business/companies/gulf-keystone-doubles-down-on-kurdistan-8292/ By Ben Lando of Iraq Oil Report Published July 6, 2012 SHAIKAN - On a hilltop at Shaikan, one of Iraqi Kurdistan's biggest oil fields, the drillmaster on a Gulf Keystone rig faced a dilemma at Well No. 5. As the drill tore deeper through the earth, drilling fluid that was supposed to return to the surface was instead being lost into the myriad fractures in the rock. The company was forced to alter its composition of water and chemicals - and to slow the drilling down. Yet this setback also portended a hidden reward. "Those cracks make it difficult to drill. But the fact that it is difficult to drill with the fractures means the wells are more productive," said Richard Lowe, the Gulf Keystone drilling manager. "It's almost sort of an inverse relationship – it's challenging because of the fractures and drilling conditions, but the upside is the actual scale of the field." Gulf Keystone Petroleum is at the forefront of the oil boom in Iraqi Kurdistan, and the drilling of this well has been just one of the many aspects of the company's operations that have presented both considerable challenges and enormous opportunity. Like the geology of its exploration block, the political situation in Kurdistan has presented Gulf Keystone – along with dozens of other foreign oil companies – with a slew of risks. The semi-autonomous Kurdistan Regional Government (KRG) is locked in a nearly decade-long political dispute with Baghdad that, at its core, calls into question the legitimacy of the KRG's contracts. That political risk has helped the companies negotiate lucrative production sharing contracts that promise significant profits – especially compared to Baghdad's more conservative technical service contracts. In its 2011 annual report, released last month, Gulf Keystone estimated that "full field development is estimated to cost in the order of $7 billion to $10 billion gross, with the first 100,000 (barrels per day) of production estimated to cost less than 5% of that amount." Geological irregularities may have raised the front-end costs of the project – operating a single rig can cost more than $100,000 per day – but at the other end lies an oil field that could hold 10.5 billion barrels of oil in place, according to Gulf Keystone estimates. And that's just one field. Gulf Keystone is operator or junior partner in four projects in Kurdistan, which has signed 46 contracts with oil and gas companies to explore for and produce oil. According to a Gulf Keystone investor publication released in late May, the company's two most prospective blocks to date – Shaikan, which the company began exploring in 2008, and Akri-Bijeel, awarded in 2007 – will in 2015 have a combined 200,000 bpd of exports. Final reserves evaluation of Shaikan – and Kurdistan's other newly discovered fields – will only take place after full exploration and assessment, which takes considerable time and money. Until then, nobody is certain how much oil really lies beneath the land, and how much of it might be economically viable to extract. The Kurdistan Regional Government (KRG) and outside analysts have estimated that Iraq's semi-autonomous northern region could hold between 30 billion and 50 billion barrels of reserves. Iraq as a whole – not including the fields discovered or developed by the KRG since 2003 – boasts 143.1 billion barrels. The country as a whole is under-explored, and presents a massive opportunity for Iraq, foreign oil companies, and global crude consumers. Political risk Companies working in Kurdistan have encountered challenges far more vexing than the difficulties of drilling through kilometers of irregular rocks. The KRG has been locked in a nearly decade-long dispute with the central government in Baghdad over how to structure the Iraqi federal state. One of the most consequential state powers – and a flashpoint for political conflict – is the right to sign oil contracts. Baghdad, which claims exclusive contracting rights, calls the KRG's deals illegal and refuses to endorse the terms that the Kurds negotiated. The Oil Ministry has also banned companies with oil contracts in the north from signing new deals in the south. The dispute has stymied oil development, especially in Kurdistan. With the notable exception of ExxonMobil, which signed six contracts with the KRG in October 2011, many of the world's largest and most capable companies have been reluctant to invest, both for fear of angering Baghdad and because the central government controls exports. KRG Minister of Natural Resources Ashti Hawrami has said that Kurdistan could easily boost production to 300,000 bpd, but most of that potential has been shut in. Kurdistan once exported crude through Baghdad-controlled pipelines, under the terms of a stop-gap agreement signed in January 2011, but the KRG cut off exports on April 1 amidst a dispute over payments. In theory, every new discovery should add pressure for politicians on all sides to find an agreement, which would increase the pace of investment in the oil sector and raise crude output that is already regularly generating between $6 billion and $8 billion per month for Iraq. In reality, however, Iraq's oil development – in both the north and south – has complicated the political equation. As companies pour money into the expensive early stages of their projects, they create facts on the ground that raise the stakes of any political negotiations. Since 2007 Parliament has intermittently tried to pass comprehensive oil legislation, which could help resolve some of the major disputes. Members of the Parliament Oil and Gas Committee have reported that a central sticking point in their failed negotiations has been the question of how to bring existing oil projects into harmony with a new, prospective legal framework. Doubling down Meanwhile, companies have responded to the new oil discoveries with a sense of urgency. Despite the lack of a foreseeable resolution to the conflict with Baghdad, investors are honoring their contracts and building up their portfolios. At the annual CWC Iraq Petroleum conference in London last month, Hawrami said he's expecting more top international oil companies – a caliber he's now able to command after ExxonMobil's entry last year – to sign for the remaining empty blocks and to begin buying out the smaller companies that gambled on Kurdish crude years ago. Gulf Keystone is among the oil firms doubling down on their KRG gamble. The company, which is listed on the London Stock Exchange's Alternative Investment Market, also operates the Shaikh Adi block and is junior partner in the Ber Bahr and Akri-Bijeel blocks. The company has hired outside consultants to oversee the sale of its 20 percent stake in Akri-Bijeel, in an effort to raise cash. Ber Bahr, operated by Genel Energy, the Anglo-Turkish firm now led by ex-BP chief Tony Hayward, just saw the completion of its first exploration well. At Shaikh Adi, Gulf Keystone spudded its second exploration well in May. And a third exploration well was spudded in May by the operator Kalegran, which is a subsidiary of Hungary's MOL. Adapting to challenges The more Gulf Keystone drills in the KRG, the more the company learns about the area's geology, and they apply lessons learned to speed up the drilling of future wells, according to Lowe. So too must Gulf Keystone adapt to some unfriendly conditions above the surface. A gas injection well for Shaikan will be drilled in an area now called Snake Valley, nicknamed for its population of dangerous wildlife. The Akri-Bijeel well No. 1, located 1,400 meters above sea level on a flat-topped mountain, was out of service for more than 20 days recently because a lightning strike burned out the motors powering the drill. The overall progress of the company's operations has also created challenges. As the wells are expected to kick up even more crude, Gulf Keystone is expanding a temporary extended well test facility (EWT), which currently has about 7,000 bpd of flow-through capacity, into a permanent production facility that will have 40,000 bpd capacity by early 2013. Shaikan wells 1 and 3 will be joined by Shaikan 4 to this facility, which is referred to as EWT 1. Shaikan wells 5 and 6 will be tied to another new facility, EWT 2. Storage capacity, currently at 40,000 barrels, will be more than doubled. And tanker trucks, averaging 200 barrels each, will double their loading rate. They currently load two at a time, which allows for about 30 trucks per day. The Ministry of Natural Resources (MNR) has staff on site to document the trucks. The maximum the facility has every loaded in a day was 7,500 barrels. The orders for filling up tankers comes from the MNR. "So when they say they want 5,000 per day, we supply 5. If they say 4, we supply 4," said one official at the facility. The eventual output from the production facility depends on the KRG's future plans for its crude – how much oil will be sent to domestic refineries, the Iraq-Turkey Pipeline (ITP), or future pipelines. Initial design and route survey has been completed for a 122 kilometer pipeline to connect Shaikan with the ITP at Feyshkabour. Permission to implement the plan will depend on broader policy decisions that are playing out within the Erbil-Baghdad feud, which could alter the route. Another complicating factor is the composition of the crude from Shaikan, which is heavier than the oil currently flowing through the ITP. Another pipeline, with between 400,000 bpd and 600,000 bpd of capacity, is set to be built for the crude that cannot be injected into the current pipeline blend. The company is also looking at supplying excess gas to a local power plant because they expect they will have more than can be used to generate power at the production facility. "We need to have infrastructure in place – you have to have export pipelines, you have to have gas pipelines," said Ron Kuntz, the production facilities manager. "We'll just do it in nice, safe steps." In the spotlight After Norwegian firm DNO (operator of the Tawke field, among others) and Genel Energy (operator of Taq Taq, among others), Gulf Keystone is the biggest player in the KRG when you combine acreage and production activities. It has had its unwanted moments in the spotlight. CEO Todd Kozel's divorce was public knowledge – and splashed in the tabloids – as a settlement focused on his Gulf Keystone earnings and ownership. That saga appears to be over. The company has also come under intense media speculation that it will be bought out. Sources within the company have said there are no active talks with any buyers. This fall, a London court is to hear a lawsuit filed by a little known U.S. firm Excalibur Ventures, which claims Kozel included them in the original bid for Shaikan, but excluded them when the final deal was signed. The lawsuit is seeking $558 million.

Gulf Keystone has also sued a blogger for using the media to manipulate stock prices, even as the value of its own stock has been – like others in Kurdistan – accused of being overvalued. "We will not tolerate malicious attempts to damage the company's reputation and share price," Kozel said in a May 10 statement following heavily circulated rumors the company would raise money by selling shares. "We have instructed the company's lawyers to use all means necessary to protect our shareholders from this malicious and unfounded attack."

Cautious optimism Shaikan by itself would be a massive asset by any stock exchange's reckoning -- but only if the oil can be sent to market. Like other firms who have banked on Kurdish oil wealth, Gulf Keystone awaits a breakthrough in the ongoing dispute between the KRG and Baghdad. Its share price often jumps when the news from Iraq suggests a political victory for Kurdistan, as when the semi-autonomous region landed ExxonMobil. And the stock also tends to subside after bad news, such as the export cutoff this spring. The company has sold more than 600,000 barrels to the domestic market in Iraqi Kurdistan, according to an official with access to the sales data. KRG officials and others familiar with the domestic market estimate the price between $40 and $65 per barrel, with $25 per barrel being returned to Gulf Keystone. The company has spent nearly $400 million in Iraq and is carrying out plans to invest more than $200 million, as it enhances its current production facilities, builds new infrastructure, and awaits direction for a new pipeline that will send heavy crude to the Turkish border. That pipeline is pegged at $170 million and, according to recent announcements by Hawrami, would have a 500,000 bpd capacity and potentially transit directly from Kurdish-controlled Iraq into Turkey. What happens to that crude, and how its value is translated into revenues for Gulf Keystone, depends ultimately on how Baghdad and Erbil find an agreement on it and the 47 other production sharing contracts. Without an agreement, Shaikan crude will be shut in, sent to a less-profitable domestic refining market, or exported unilaterally by the KRG without Baghdad approval – likely a combination of the three. Any of those scenarios present significant risk and uncertainty. Yet as the KRG presses ahead with development of its oil sector at large, both the Kurds and its company partners are betting that the opportunity to make money will sway Baghdad, as well as other big investors. The presence of ExxonMobil – and the size of Gulf Keystone's discoveries to date – suggests the company will have little trouble convincing investors and prospective buyers that Kurdish crude will find its way to market, one way or another. Big potential Richard Lowe, the drilling manager, said Kurdistan wells have a 70 percent discovery rate – compared to 10-15 percent worldwide. "Each well in Kurdistan is unique because it is so heavily folded and fractured," he said about the geology, whose complexity has offered unexpected rewards. Shaikan's well no. 6, for example, was initially drilled at the far end of the field to test the "spill point of the structure" -- where the hydrocarbons reserve ends and water was expected – but when the drill got more than 3 kilometers deep, it actually found more oil. "It was a very, very good well for us," said country manager Adnan Samarrai, "it is very promising." The work in the mountains of Kurdistan can be more laborious and time-consuming than in other parts of the world. It takes a month – 150 truckloads — to take down, transport, and put up a rig. "It is extremely challenging," said Lowe, "but the rewards are quite good -- we find one billion barrels here, one billion barrels there." =============== KRG to Sell Gas Directly to Turkey Posted on 04 July 2012 The Kurdistan Regional Government's (KRG) Minister of Natural Resources, Ashti Hawrami has said the Region is planning to sell natural gas directly to Turkey in the next two years. According to a report from AKnews, he told the Caspian Gas Forum in Istanbul that the Kurdistan Region may sell natural gas to Turkey even if there is no consensus with Baghdad: "We plan to sell 10 billion cubic meters of natural gas to Turkey, and later Europe in the long-term." The KRG move might take the tensions with Baghdad to new heights if it starts to sell oil to Turkey, and could also put a strain on Turkish-Iraqi relations. == Iraq: Shahristani attempts to prevent new KRG oil contracts Posted on: Fri, Jun 22, 2012 Deputy Iraqi PM for Energy Hussein Al-Shahristani is said to be trying to prevent at least five major oil companies from signing contracts with the Kurdistan Regional Government (KRG) for investment projects in the KRG-controlled area in northern Iraq. The following 436-word report sheds light on the subject and tells what about the companies in question and what about Al-Shahristani’s attempts to prevent them from signing contracts with the KRG. http://www.tacticalreport.com/view_news/Iraq:_Shahristani_attempts_to_prevent_new_KRG_oil_contracts/2746 === 20/06/2012Iraq warns French companies on deals with Kurds http://www.expatica.com/fr/news/french-news/iraq-warns-french-companies-on-deals-with-kurds_235166.html The deputy premier for energy affairs on Wednesday warned French companies that any contracts with Baghdad would be scrapped if they signed deals with local or regional governments in Iraq. The autonomous Kurdistan region in north Iraq has signed a number of oil contracts with foreign firms, but the federal government considers them illegal and insists all such deals must go through Baghdad. Hussein al-Shahristani "warned French companies working in the oil sector in Iraq against signing contracts with (entities) other than the Iraqi government," during a meeting with French ambassador Denis Gauer, the deputy premier's office said. Shahristani asked Gauer to convey to the French government that if any French firm signs "a contract with the Kurdistan region or another local government without the approval of the federal government, this will mean the end of its contracts in Iraq," his spokesman Faisal Abdullah told AFP. Shahristani had previously said that French oil giant Total would "be considered in breach of Iraqi laws" if it signed any deals without the approval of the Baghdad government. Total chief executive Christophe de Margerie said earlier this year that his firm was in talks over potential deals with the three-province Kurdistan region. Total is part of a consortium along with China's CNPC and Malaysia's Petronas seeking to ramp up output at the Halfaya field in Iraq's southern Maysan province, which has proven reserves of about 4.1 billion barrels. Shahristani's remarks on Wednesday come a day after Prime Minister Nuri al-Maliki's spokesman, Ali Mussawi, said the premier believes a contract between US oil giant ExxonMobil and the Kurdistan region is dangerous and could lead to "breaking up the unity of Iraq." Maliki last week requested that US President Barack Obama intervene to block the Exxon deal, which the company signed with Kurdistan in October, Mussawi said. Iraqi Kurdistan has been locked in a standoff with Baghdad for months, one of a series of intertwined political crises which have escalated into calls for Maliki to be removed from power. ==== Iraq Mega Projects 2011: Chinese Company China Petroleum & Engineering Corp. (CPECC) Awarded $174 Million Contract Google Plus Facebook Twitter LinkedIn Email A Friend Print This Page Save as PDF Add to Reading List . Related Projects CNPC/Total/Petronas/SOC - Halfaya Oilfield Redevelopment - Crude Processors Plants CNPC/Total/Petronas/SOC - Halfaya Oilfield Redevelopment - Phase 1 Projects Monitor -------------------------------------------------------------------------------- The Chinese oil firm China Petroleum and Engineering Corp. (CPECC) have been awarded a $174 million contract to build three crude processors, and has begun work on the contraction on the first production network of southern Iraq's Halfaya Oil Filed. The new plants will raise the production of Halfaya Oil Field by 100,000 barrels per day, which currently produces approximately 12,000 bpd and plans to produce 20,000 bpd by the end of 2011 and a further 90,000 bpd by the first quarter of 2012 said Head of Mission Oil Company Ail Maarij. Iraq Mega Projects 2011 taking place from 18-20 October 2011 at the Ritz Carlton, Istanbul, Turkey will look in-depth at case studies showcasing the challenges, progress and solutions faced with the developments of Iraq's oilfields. Senior Iraqi Professionals and high level industry executives have given great support for the conference this year which brings together operators, Iraqi representatives, local governor's, service providers and experts that together will develop Iraq. Key officials supporting Iraq Mega Projects 2011 include H.E. Thamir Al-Ghadhban Chairman of the Advisory Commission to the Iraqi Prime Minister of Iraq, H.E Adnan Al-Jahabi Chairman of the Parliamentary Energy Committee and Natiq Al-Bayati of the Advisory Commission. Key industry support has already been confirmed for Iraq Mega Projects 2011; sponsors to date include: Caterpillar, Emerson Process Management, Olive Group, ExxonMobil, Techint, OIEC, Oxy, Statoil and Total. -Ends- The CWC Group is an award-winning company specialising in energy and infrastructure, developing knowledge, creating commercial opportunities and strategic solutions for government and industry by offering professional training, conferences and exhibitions. All media enquiries to: Hanisha Mohammad Marketing Manager The CWC Group +44 20 7978 0344 hmohammad@thecwcgroup.com ============== Feb 06 2011 more articles from . Pakistani oil contractor expands from Dubai base Google Plus Facebook Twitter LinkedIn Email A Friend Print This Page Save as PDF Add to Reading List . In This Article International Petroleum Investment Company -------------------------------------------------------------------------------- Related Oil terminals in east Libya forced shut: local sources Factory owners complain of losses as Riyadh diesel woes continue Crude prices mixed ahead of expected ECB rate cut Motiva shutdown may call for Aramco FDI review Iran discovers 6 billion barrels of new oil reserves -------------------------------------------------------------------------------- Sunday, Feb 06, 2011 Gulf News Wins $300m contract for abu Dhabi pipeline project Dubai: Pakistani engineering firm Techno Engineering Service has chosen Dubai for its international headquarters and its expansion in the Middle East and beyond, Vishal Nagpaul, head of Techno Engineering’s international operations, told Gulf News in an interview yesterday. The company, which has been in oil and gas plant and pipeline construction for over 30 years and ventured into the UAE three years ago, has won a $300 million (Dh1.1 billion) contract for parts of the construction of the Abu Dhabi Crude Oil Pipeline (ADCOP), the largest export pipeline project currently in development in the UAE. Techno Engineering has been chosen for the hardest parts of the pipeline, which leads from Habshan in the Arabian Gulf to the Fujairah export terminals through the rough terrain of the Al Hajar mountains. “It is one of the toughest pipeline construction projects in the UAE,” said Nagpaul. The route of the pipeline crosses “lots of wadis, roads, rocky slopes, ponds, farms and utility lines.” The construction included installation of the pipeline on steep slopes greater than 45 degree angles, where Techno Engineering used a specially imported cable system to ensure fast working under these sections. This was the first time such a system has been used in the UAE, Nagpaul said. Completion The pipeline construction is on track and expected to be completed before the end of April this year. The Adcop project is spearheaded by the International Petroleum Investment Corporation (Ipic) , along with the China Petroleum Engineering and Construction Corporation, a subsidiary of the China National Petroleum Corporation. The 370-kilometre pipeline will transport 1.5 million barrels of oil per day. This will allow more than half of the UAE’s exports to bypass the strategic chokepoint at the Strait of Hormuz. Nagpaul said that Techno Engineering is also working on a cross country pipeline in Iraq, the largest pipeline project currently undertaken in the country. “Working in Iraq has been fraught with uncertainties and filled with challenges. However, Techno is confident that they will also complete this project on time,” Nagpaul said. He added that the company is also close to finalising project contracts in Algeria and Turkmenistan, which mark important steps for its expansion in the Mena region. By Arno Maierbrugger, Deputy Business Editor © Gulf News 2011. All rights reserved === Iraq to Offer Kirkuk Refinery for Bidding by End-2012 Posted on 29 June 2012. Tags: Kirkuk, National Investment Commission, NIC, Refineries, SCOP, State Company for Oil Projects Iraq’s State Company for Oil Projects (SCOP) will offer the construction of the Kirkuk oil refinery to international companies on a build, operate and own (BOO) basis in December 2012, according to a report from Steel Guru. The report quotes Mr Salar Ameen, deputy chairman of the National Investment Commission (NIC) as saying that “feasibility studies are ongoing with two Italian and American advisers. The Iraqi oil ministry will make public the specifications before the end of the year. The refinery will cost approximately of USD 6 billion with a capacity of more than 150,000 barrels per day of oil“. Mr Ameen said that companies from the US, China, Korea, Saudi Arabia and the UAE have expressed interest in bidding for the project. Construction is expected to be completed by the end of 2016. The Kirkuk refinery project is part of the oil ministry’s plan to build several refineries across the country to meet increasing domestic demand. These refineries will have a total capacity of 740,000 barrels per day at an estimated cost, according to the report, of $20 billion. (Source: Steel Guru) == Jihadists kidnap senior Iraq oil official in Baghdad Oil Weapon Update: "Gunmen kidnap senior Iraq oil official in Baghdad," from Reuters, with thanks to JE: BAGHDAD (Reuters) - Gunmen kidnapped a senior official of Iraq's oil ministry after he left work in Baghdad on Thursday, police and ministry sources said on Friday, highlighting the lawlessness still afflicting the vital sector. The incident happened the same day U.S. troops killed Iraq's al Qaeda leader Abu Musab al-Zarqawi, whose demise the Iraqi Oil Minister Hussain al-Shahristani said would help improve the country's oil production, particularly in the north. The sources said Muthana al-Badri, Director General of Iraq's State Company for Oil Projects (SCOP), was on his way home in the Sunni district of Adhamiya when gunmen in four cars stopped his car and abducted him but set his driver free. They said the kidnappers have not contacted the ministry or Badri's family. (Photo: Najaf Refinery) =================================== splitting iraq: how likely is an independent kurdistan? The disputes between Baghdad and Iraqi Kurdistan have led some local politicians to call for the semi-autonomous region to secede from Iraq and become its own country. But, as one Kurdish commentator argues, this is far from realistic. Because now it’s all about money and oil, not politics. Recently there has been a lot of comment about an independent Iraqi Kurdistan. As tensions between Baghdad and the semi-autonomous, northern state of Iraqi Kurdistan continue, the Kurdish have been playing the “independence card”, with local politicians and commentators airing their views on the subject like never before. It is no secret that the majority of Kurds, if not in fact, all of them, would love to see an independent Kurdistan. And the easiest way for a Kurdish politician to become popular is to call for an independent state. Although the Kurdish president, Massoud Barzani, has recently given the impression that he wants to see an independent Iraqi Kurdistan, the political party to which he belongs, the Kurdish Democratic Party (KDP), and the other major political party in the area, the Patriotic Union of Kurdistan (PUK), have so far resisted similar temptations. In fact, most Kurdish politicians are still talking about a “united Iraq” despite Kurdish public opinion against this idea. And they have a point. If you are a Kurdish politician and you need to maintain diplomatic relations with your neighbours, and if you’re aware of the economic and political realities for Iraqi Kurdistan, then it’s very hard to call for Kurdish independence and really mean it. It is possible that Iraqi Kurdistan is politically mature enough to be independent – but the region is not ready for such a step in economic or military terms. And it is true that, over time, the political consequences of Kurdish independence have always been considered greater than the economic consequences. But that no longer applies. A clear example is the Kurdish rebellion against former Iraqi leader Saddam Hussein’s regime in the early 1970s. When Hussein started to become friendly with the Soviet Union, then-US President Richard Nixon began to fund, and encourage, the Kurdish to fight for their independence against Hussein, as part of a strategy to weaken Hussein’s regime and general policy against the USSR. But just as the Kurdish revolutionaries seemed to be succeeding, it became clear that none of the parties supporting the Kurds actually wanted them to win their independence – the ploy was purely political – and support was withdrawn. Additionally the question of Kurdish independence has always troubled the surrounding countries; none of them have ever wanted a Kurdish State. But now, given Iraqi Kurdistan’s oil and gas potential and the benefits that could bring surrounding countries in terms of trade, those neighbours have softened their stand on Kurdish independence – and they’re likely to soften even further as trade ties develop. There are also strong economic overtones to Baghdad’s policy toward Kurdish independence. Baghdad sees the various disputes over revenue sharing, oil contracts and oil exports currently going on between Baghdad and Iraqi Kurdistan as necessary to its centralist agenda. Partially, it is about deterring other Iraqi regions, some of which have suggested the idea, from asking for independence to become a region with autonomy similar to that enjoyed by Iraqi Kurdistan. Although, given the advanced stage of the oil industry in the Kurdistan region, Baghdad realises that their disputes with Iraqi Kurdistan are unlikely to end in their favour, they still have to send out a clear, centralist-flavoured message. Imagine, for example, if a province like Basra - which currently has most of the Iraqi oil reserves and which has the only access to ocean-going transport – achieved the same kind of independence Iraqi Kurdistan had. Given its strategic position, it might eventually become as powerful as the central government. Even for the Kurdish themselves, the main question about an independent Kurdistan comes down to economics. Up until now the economics of independence have always been an afterthought; even the Kurds have subconsciously ignored them. However in modern times, if the petro-dollars from Baghdad stopped flowing and people started to feel the pinch in their pockets, the idea of independence might not look so romantic after all. This is the reality: Iraqi Kurdistan is land locked; it is dependent upon selling its own natural resources and importing consumables in exchange. Having bad, or no, relations with neighbouring countries is simply not an option for Iraqi Kurdistan. And Iraqi Kurdistan has been operating like a state within a state, but without the duties of a state. The Iraqis have continued to send 17 percent of the Iraqi federal budget to the Kurdish (although it was delayed this year). Most of the Iraqi federal budget is generated by oil revenues and currently, most of Iraq’s oil is produced in southern Iraq, in places like Basra. Any northern oil tends to come from the disputed Kirkuk region. Iraq's oil production is rising, set to reach over 3.4 million barrels per day by the end of the year according to former Iraqi Oil Minister Thamir Ghadhban, also Chairman of Advisory Commission to Iraqi Prime Minister. And with this, the federal budget is also swelling – so is Iraqi Kurdistan’s 17 percent share. However due to disagreements over oil policy, revenue sharing and Baghdad’s refusal to pay oil company costs, Iraqi Kurdistan is pursuing its own oil production agenda. However in Iraqi Kurdistan, this sector is still largely underdeveloped. And, due to this and aforementioned disputes, the state is not contributing as much as it can to Iraq's oil exports. Which is why many Iraqi politicians have already argued that the Kurdish are getting an unfairly large share of the country’s income even while they’re not contributing as much. The most obvious move for the Kurdish would be to annex the disputed area of Kirkuk, where much of the northern oil is currently being produced, and get full use of the Kirkuk-Ceyhan pipeline to Turkey’s Mediterranean coast. The northern Iraqi city of Kirkuk has actually been one of the flash points of the struggle between the Iraqis and the Kurdish over the past few decades. During former Iraqi leader Saddam Hussein’s regime, the Kurdish population was driven out of Kirkuk so that Arab Iraqis could control the oil rich area. Today Kirkuk remains largely Kurdish and the government of Iraqi Kurdistan claims it belongs to them. Although legally it belongs to Baghdad, currently the city is, in fact, under the de-facto control of the Kurdish government. Even in the unlikely scenario that such an annexation happens, in the short term Iraqi Kurdistan would still struggle to generate as much income as Baghdad sends them. Putting the required infrastructure into place would take time and would need the consent of neighbouring countries, like Turkey. The economic consequences of losing the over US$11 billion that the Kurdish receive from Iraq would be devastating for the region; the whole economy could implode, which in turn would lead to many political and social problems. Iraqi Kurdistan has other income streams and income opportunities and the promise of a hydrocarbon pipeline to Turkey offers a life line but in the short term, this income will not be enough to pay salaries in the bloated public sector or to invest in rebuilding the infrastructure, that would eventually lead to growth and an increase in oil and gas production. In fact it’s disputable whether Kurdish oil production could ever match Baghdad’s current contribution. If Kirkuk and other disputed territories are taken out of the equation, then the amount of oil Iraqi Kurdistan could export may never match up to the 17 percent of the budget that they’re currently getting. So although many Kurds yearn for independence, when the state’s finances dry up and there are budget cuts, unemployment and a reduction in living standards, those views may well change – and, whatever other faults they may have, almost all Kurdish politicians can see this how this would be extremely unpopular. An independent Iraqi Kurdistan would not just lose its Baghdad budget, the state would also go from holding some part of the balance of power in the Iraqi parliament – the Kurdish bloc has been referred to as “kingmakers” because the two major opposition blocs have fairly equal numbers in Parliament – to being a small state, surrounded by far larger, far less friendly states in the area. Should Iraqi Kurdistan secede, it is not even clear whether the international community would recognise the would-be country as a fully fledged nation-state. In international terms, Kurdish independence would rely heavily on the Iraqi Kurdish relationship with Turkey. In fact, contrary to popular opinion in both Turkey and Iraqi Kurdistan, an independent Kurdistan could benefit Turkey immensely. Despite historical antipathies (Turkey is still fighting a battle against the Kurdish population within its own borders), Turkey is the most likely nation to support the idea simply because then they would have greater influence over Iraqi Kurdistan – and Iraqi Kurdistan has the potential to become a future, cheap energy source fuelling the booming Turkish economy. In conclusion, if it comes to a referendum on independence – something that President Barzani has suggested during ongoing disputes with Baghdad – Kurdish politicians would be caught between a rock and a hard place. On one hand, if they advocate independence, they face not only economic hardship but also regional isolation, a loss of influence in Iraq and increased dependence on the goodwill of both Turkey and Iran. On the other hand, if they stay part of Iraq, then they must help to build the nation for real and find solutions to outstanding, contentious issues – such as the oil exports and the disputed territories like Kirkuk and Mosul. Should they decide upon the latter for the time being– and this seems most likely and most sensible option– then Kurdistan can become more of an assertive regional player. Eventually this would give the region a better bargaining power when the statehood, that so many Kurdish long for has more potential to become a reality. http://www.niqash.org/articles/?id=3087 == Parliament to investigate Ninewa-Exxon talks Iraq's Parliament has ordered a six-member committee, led by the head of the Parliament's Oil and Energy Committee, Adnan Janabi, to investigate claims made by the governor of Ninewa province that he is negotiating oil deals with ExxonMobil. "The main reason for forming this committee is to look into and investigate what has been said and published in the media – that the governor of Mosul, Mr. Atheel Nujaifi, was holding talks and coordinating with the government of Kurdistan and the fore... http://www.iraqoilreport.com/oil/production-exports/parliament-to-investigate-ninewa-exxon-talks-8 == Author orang minyak View Profile Add to favourites Ignore Date posted today 00:08 Subject How long can the dam hold? Votes for this Posting Voted UP 19 times. Message 'Evening, all patient and impatient GKP investors. Well, another day at the £2 ish mark today, and as someone else pointed out, this uncanny stability it is starting to look a lot like when we were at £2.80 just before the move north, to £4.50, without news. And then we all know what happened afterwards .... I am actually feeling quite bullish at this point in time. Without going into complete details, let me recap the clues that to me indicate a big move up, supported by news, is on the way very soon. 1) 50% rise in 3 days supported by serious volume, 140 to 210p. Confirming to me, that we are not being rated so much as being PLAYED by the Market. Also confirms to me the huge potential of GKP and other Kurdy oilies. 2). A number of credible posters and key players confirming the big events have occurred or are about to occur. Shaikan BIR sale; entry of Total and other supermajors; sale of other BIRs (NT since May, Viiva, and today Leadham (although that casual 1 week, 4 weeks, 1 year who cares, was a bit callous to all the investors with frayed nerves). Plus Minister of Natural resources Hawrami, who should know. 3) Indications that the supermajors cant wait to announce their entry, and tell their shareholders the wonderful news. We have discovered a new Libya, and guess what, we have just got ourselves a large piece of oil real estate in it! Gonna be good for those director bonuses.... We know WZR is champing at the bit, the KRG wont be able to hold it and the other oilies back for long! 4) Strong and committed statements from Turkey recently affirming Kurdy oil and gas exports to Turkey. Wise moves by Turkey to look at rejuvenating existing ICG pipeline to Turkey. Baghdad needs Turkey onside too, presumably as an alternative export route in case Iran closes the Straits of Hormuz. 5) moves to oust Maliki look like they are in final stages. Question Maliki in Parliament with one week's notice. 1 week gap. Then move the no-con vote. Either success or failure, then KRG can move on. 6) Unexpected hearing and disclosure order re Excalibur. As Sicilian pointed out the pressure is on for Excalibur to settle. 7) new OIP numbers for Shaikan due anytime this month (2 days before the AGM perhaps?). Shaikan will be boxed up and ready to go, and any supermajor buying GKP will have a reasonable guarantee of a known asset, enough to buy the whole lot as a bit of a punt, tho not if you believe the 100B barrels all-one-giant-field theory. 8) Perella Weinberg fingerprints all over the virtual news embargo for GKP. Only one reason, advanced negotiations for GKP sale underway, waiting for the final numbers to be agreed. My conclusion is the dam will break soon. The news will have to be released very soon (otherwise one of the supemajors or minnows will leak it). The city already knows, so wont be long till the whole world knows. Dont worry. If you must worry (as all of us with an ounce of sense do, occasionally or frequently) perhaps we should all agree to do it off-board. The MMs strike to lower the price when they sense fear. How do they read the emotion in the market? Easy, just read this BB, we are transparent as a sheet of glass. In the peak of the bear raid down to 140, you could feel the fear and despair on this Board. Any MMs attacking the price would've rubbed his hands with glee. How about it, chaps? Stiff upper lip, what ho? Don't show your fear on this BB, even if you feel it? Keep the MMs guessing. Fear feeds the bears; do not feed the bears. When this SP hits £3 (could do it within 3 days judging from recent past form) it might do a retrace - well don't panic then. Sell a few if it helps you to calm your nerves and not feel so bad if there is a retrace (I know I will get pilloried for that advise, but hey ho). Keep calm and carry on. And watch and wait until it hits £4, £5 and so on until the double figures that all is investors are here for, at the end of the day. OM === UPDATE 1-Turkey importing crude from N.Iraq in road tankers Fri, Jul 13 05:31 AM EDT * Volumes could rise to 100-200 road tankers per day * Kurdistan locked in energy dispute with Baghdad government * Turkey eyes energy projects with both Kurdistan, Baghdad BOLU, Turkey, July 13 (Reuters) - Turkey has begun importing 5 to 10 road tankers of crude from northern Iraq daily and the volume could rise to 100-200 tankers per day, Turkish Energy Minister Taner Yildiz said on Friday. Iraq's autonomous Kurdistan region, which borders Turkey, is locked in a dispute with the central Iraqi government over oil exports and energy policy has become a sensitive topic. A Kurdistan regional government source said earlier this week that it had sent a small amount of oil to Turkey by trucks in exchange for diesel, adding it needed the refined product to run power stations. "Crude purchases from northern Iraq have begun with a volume of 5-10 road tankers. This may rise to 100-200 tankers a day," Yildiz told reporters at a ground-breaking ceremony for a power plant in western Turkey. Ankara has increasingly courted Iraqi Kurds as its relations with the Shi'ite-led central government in Baghdad have soured. Turkey is a major investment and trading partner for Iraq, especially for Kurdistan. The Kurdish government source said this week Kurdistan was not getting enough of the refined product under supplies controlled by the central Iraqi government, making the trade with Turkey necessary to fill the gap. Kurdish Prime Minister Nechirvan Barzani has said that if the central Iraqi government did not provide Kurdistan with its share of refined products, the region would be forced to act. According to the Kurdistan government, Iraq has cut supplies of products to Kurdistan to 16,826 barrels per day (bpd) from 32,116 bpd from April 25, far below its 140,000 bpd allocation. Kurdistan infuriated Baghdad last year by signing production sharing contracts with U.S. group Exxon Mobil. A provincial governor said earlier this month he would also like to enter talks with Exxon, the world's largest publicly traded energy company. Separately, Turkey and Kurdistan are also in talks for the direct sale of natural gas to Turkey. But in a sign of moves to soothe ties between Ankara and Baghdad, the two governments have started technical work on shipping crude oil from Basra in southern Iraq via the Kirkuk-Ceyhan pipeline to Turkey's Mediterranean coast. ========