At present gulf is in a lot better position than say 2 months ago, with all things weighing up, with the bond issue we had before, the placing, and the payments we should a slow but steady turn around, ISIS are slowly disappearing it's looking very promising
This shows that the domestic prices are only marginally below the export prices. Gulf is being adversely affected by the very high transport costs, which are oddly stated by Gulf to be as high on domestic as on local sales, which clearly does not reflect the operational reality but which might reflect the payment formula. The issue of who decides how much Shaikan crude is exported, as opposed to sold domestically. was in the list of shareholder questions at the AGM and Gulf answered it by saying that the Ministry of Natural Resources decides where the oil goes.
Gulf also said on Thursday that the 7-week production shut-in earlier this year was ordered by the Ministry of Natural Resources; it was nothing to do with Gulf. During this period pressure tests were conducted on the reservoir to see how rapidly the pressure recharged following the long period of production. These tests were described by Gulf as giving "amazing results".
"Production has grown rapidly in the first half of the year, increasing 41% year on year, with operational delivery driving record volumes above 100,000 bopd net to Genel on peak days. This increase has been integral in helping the Kurdistan Regional Government achieve its export goals, and the KRG is firmly committed to ensuring companies are paid in full for their production. Over 600,000 bopd of exports are now flowing to Ceyhan and, as distribution of the resulting revenues stabilises, the KRG is moving towards a financial position from which to make export payments to contractors.
Progress has also been made on our world-class Miran and Bina Bawi assets, the development of which provides a huge opportunity for both Genel and the Kurdistan Region of Iraq as a whole. We are now working on putting in place all of the components to progress this transformational project to its development and ultimate monetisation."
Cardington, I believe so. We will see the payments stabilizing for production but I still see it difficult for the back costs to be clawed back. This will come through sale only. Hence the importance for us to move towards 100,000bpd in the mean time.
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