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Very interesting development, thanks for the early research, or are you in a warm time zone like me?
If at long last the Turkish conditions for a presidential visit are falling into place we can only hope that our issue will be a part of the grand agreement announcement the senior politicians like to make in person.
As I said yesterday the PKK have been served up as the sacrificial lamb to celebrate the new Turkey and Iraqi partnership. KRGs silence on the matter speaks volume. I wonder what they are getting in this deal.
The silence from Iran and US is also telling.
https://www.al-monitor.com/originals/2024/03/iraq-bans-pkk-security-ties-turkey-gain-momentum
PUTUP I now agree that buybacks at this (low) point would would be a welcome initiative towards some share price recovery. Surely value accetive at this level. $25m would be enough to spark the apothecary’s magic. And let’s face it, if the company is doomed we will never see that cash anyway.
Buybacks and then a positive statement from AKIPUR on the ITP would bring springtime sunshine, like the clocks going forward in Wales.
I think you're getting common sense mixed up with politics, they don't care about the lost revenue it's not coming out of their pockets. BUT, one way or the other I'm confident there will be oil flowing, just a matter of when, I've bought up to my limit and can wait a month, 6 months, 2 years for the pipeline contract to end, will be a good retirement investment.
Since October 2023 - when Turkey lift the force majeure and green light restart of flow - Baghdad is being debited $30m USD per month. Approx. $180m USD as per today and $360m USD per year.
Baghdad could flip this losing hand to $1B gross revenue per month, with the start of exports. (friendly reminder that Kirkuk SOMO oil also went through the pipe).
Follow the incentives. Load up. Cheers
DNO, GKP and Shamarans pays approx. $15-16 per barrel for midstream transport, storage and loading. When I talked to management at Shamaran and DNO both confirmed that +90% of these costs lands on the side of Turkey. One can then conclude that Turkey gross income for a open pipe is +$1,500m per year, every year. Substantial.
I might get a rebuttal that the (Botas) pipeline fee is not $15-16 per/b - but that's not the entirety of the cost structure. Turkey makes a killing here and it's in that context we should understand their constant eagerness to restart the exports. Not to mention the "quality discount".
The more disgruntled retail holders that can be mopped up the better. Plenty still prepared to sell at or near current levels.
The original Pipeline Agreement was dated 27th Aug 1973 and was subject to various addendums in May-76, Dec-80, Aug-81. July-85, Mar-96 and Aug-07. Although due to expire on 19th Mar-2010, a further Ammended was agreed and signed 19th Sept 2010 (the current one) with a validity of 15 years.
Expiry is therefore 14th Sept-2025, in 18 months time.
BOTAS have lost a LOT of money over the years maaintaining this pipeline infrastructure and if the agreement is extended you can bet your boots the currently-agreed $/bbl tariff will be substantially increased, as will the Minimum Guaranteed Throughput.
@PUTUP, who do you think the buyback would appeal to?
I will probably regret the next question as it might spark another battle in the Buyback Wars.
Why will it appeal to them?
One week until a buyback announcement? Might finally give some impetus to this sad stock...
Good find sir, didn't know that about the pipeline.
I invite everyone to read (or listen) to the last paragraphs of the DNO conference call for Q4. The CEO explicitly states that the current agreement of the pipeline has less then two years life left and if no solution to be found within that time span, new export routes will be forced open by two years.
Link: https://i.imgur.com/dw1TjXB.png
Load up gents, we're going up.
Someone offloaded 100k worth too
Someone just decided to scoop up £100,000 worth of GKP 🤔
The Faysh Khabur Export Pumping Station lies midway between the villages of Faysh Khabur, which lies on the Tigris river border to Syria, and Derabun.
The export station was NOT built by the Kurds and, leaving aside recent plant additions within the compound carried out by KRG/MNR and western contractors (such as DNO), remains part of Iraq's sovereign assets.
It remains to be seen how ultimate control of this Iraq export station will be settled; don't forget also, the pipeline agreement is between the sovereign states of Iraq and Turkey - the KRI is not even mentioned.
All parties in agreement then ….. just the monthly signing fees to agree between the tribal leaders then ;)
2 to 3 months we could all be nuked.
Remember last year, soon, soon, this weekend, next week ha ha ha ha madness
The Turks signaled that the pipes are repaired and that they are ready to receive exports for the first time in October 2023. Since then, they have vocalized this four (4) times from the highest echelon (i.e. ministry of foreign affairs) and it's on the agenda for the deliberations that start today in Baghdad.
The ICC judgement cost Turkey a net $1,500m for almost a decade of exports. This might sound like a large sum, but the ITP earned Turkey approx. $1,400-$1,600m per year. When you understand that the financial incentives are there, then you understand Turkey's eagerness to restart the pipeline exports.
Mid 2023 Iraq made a request via the New York ICC court to settle the aforementioned payment by Turkey. It was 4-5 months after this request Turkey signalled "all clear" - and there hasn't been a single rebuttal from the Iraqi side on this issue since. If there was outstanding payments from the Turkey side, meanwhile Turkey four (4) times argues for a restart - we would hear complaints from the Iraqi side (rest assured).
Turkey will push for exports.
The US will push for exports.
KRG will push for exports (it's their livelihood, more than 50% of the economy)
Two weeks ago Iraqi foreign minister told us that they have agreed to a oil cost recovery of $20 (implicitly saying the PSCs are intact).
It's happening, give it 2-3 more months.
"isn’t Fishkhabour in Kurdistan"
The ICG regards Fishkhabour as its territory. When the Iraqi army forcibly restored ICG control over Kirkuk, it also wanted to restore control over Fishkhabour and the entire Syria-Iraq border, but the US prevented that.
Best Regards ValueS
"then how about there are unresolved issues about exporting ANY oil through Turkish ports"
You hit the nail on its head there @theoryman. What does the Turkish state really wants? The policy towards Iraq since the Syrian Civil war broke out is astonishing to say the least. Needless to remember that (in reality) ISIS was (and still is?) nurtured by the Turks under Erdoğan and his political party (Muslim Brotherhood, under a different name), allegedly in a bid to revive the Ottoman Empire? Without Turkish help the Kurdish pipeline wouldn't had been built, and without ISIS the old pipeline would have continued to function just like it did since its construction.
Given all that history, who knows what unresolved issues (if any) there might be.
Best Regards ValueS
@ValueS, isn’t Fishkhabour in Kurdistan, so one end of the pipeline is not “entirely within the territories under ICG control “?
Could be a good bargaining chip for the Kurds?
@ValueS, does it run through any disputed territory?
Are there any reasons you are aware of that might cause the FGI to NOT start exporting Kirkuk oil with immediate effect?
If you can’t, and no one else can either, then how about there are unresolved issues about exporting ANY oil through Turkish ports, never mind just Kurdish?
No pipeline, no backpayments, Kurds broke
To me that makes no difference at all. The pipeline isn't the issue. The issue is getting contracts and back payments sorted out.
I guess it's a hard one to call with so much going on behind the scene
Thanks anyway ValueS