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There is a fine, old Dutch proverb that ends:
Wye him neder werpt inden slijck,
Hi wart vul slikich bij ghelijck.
Wye mit zwinen wil omme gaen,
Daer leert hi wael gnorren aen.
Whoever throws themselves down in the dirt,
they will equally become dirty.
Whoever wants to live with swine,
will learn how to grunt.
BB, that might be true for one of the companies who have been on the receiving end of these breaches of contract but all of them?
T’man - redress in this case would hopefully result in both identifying where the monies went, when, and to whom.
I recall that Hawarami was paid around $90k pa as head of the MNR - but his wife was (unfortunately) caught trying to expatriate a sum of around $130m via a bank based in Turkey - she publicly admitted the crime (to avoid breakfasting on porridge for prrsumeably a long, long time) and el presidenti Barzani immediately removed her husband from his high profile position as head of the mighty MNR.
One imagines that pilferring on this scale must run far and deep to allow it to prosper and continue .......
You question why...
Perhaps if you, the plaintiff, have more or just as much to be ashamed of than does the defending party, then you might very carefully consider the implications before initiating any such action.
Don't wash your dirty linen in public...?
So why, apart from DANA, have none of the IOCs in Kurdistan gone down the International Law/Arbitration route?
First rule of litigation involving seeking financial redress, go after those who can pay as opposed to those that can’t, even if the latter are slam dunk guilty.
Anyway the market doesn’t seem bothered at the moment, so go with the flow. It will soon let us know if sentiment does an about turn, then as always it’s down to individual choice of either staying or exiting from the ride.
Of course they are , and there is International Guidance for compiling O&G Contracts and they usually all follow the same format. They also contain penalty clauses for non compliance issues /financial penalties that GKP COULD enforce if they so wished. Again enforcable under International Law.
Just a quick word on PSC's.
They do not typically end when the initial time period is reached, otherwise no on would agree to them ( for obvious reasons) . What usually happens is one of the following. (a) The PSC is renegotiated for the same time period as the original ( unusual ) (2 ) It is renegotiated for a fixed term(s) . Typically 5 or even 10 years chunks . It is also worth noting that a PSC is a Contract and as such has the same Legal obligations as I described in my first paragraph.
IMO
CONTRACTS ARE A 'TWO WAY' THING - ENFORCEABLE BY LAW........
It will be interesting to see if the dynamic between the KRG and the Oil companies changes next month if Hawrami/KRG lose the case brought by Dynasty. If there's a crippling payout awarded against the KRG and, as we suspect, they've been responsible for all manner of contractual skullduggery, the relationship between the parties could well change. The KRG may start to fear copycat actions with a high degree of success being brought against them by the operators. An incentive to keep the licence operators sweet one might hope.
MNR head tribals (and above) have learned that they can manipulate the payments to the unfortunate IOCs who are only guilty of investing in their (questionably legal) region by producing and handing over hydrocarbons for (questionably legal) sale on the open market.
Convenient excuses have lined up to promoted this - Costs of fighting and defeating the fearsome IS (Uncle Sam did it for them foc), absorbing millions of refugees (has their lives improved under Kurd generosity ?), rebuilding the (still broken) infrastrucure, underwriting the formation of the Kurdish nation (against the will of the majority of the popularion), and the latest non-payments escape clause - saving the nation from C19.
Nope, None of the above - the only logical agenda can be that of massive and unrestrained pilferring to secure further dazzelingly impressive personal gains.
Our only defence against this would be in closing our collective export valves - until our sole customer is forced to follow the terms of the PSCs..
Unfortunately said PSCs would be withdrawn for not fullfilling the terms of the contracts of course.
Rocks and Hard Places then....
KRG only have themselves to blame. They have treated GKP and other oil companies with disdain. Never pay on time. Forced GKP to near bankruptcy on easy to pay off debt. Stopped paying again when oil price dropped. Constant arguments with Baghdad. Corruption and mismanagement at epic scale. No support for next stage of FDP. It is no surprise everyone is super cautious in investing in their country. There is going to be an oil boom in next 5 years but Kurdistan is likely to miss it for all these reasons. Need fundamental change on KRG side.
I remember that post, made me go away and look at something, apologies for not giving you the credit at the time.
I have absolutely no idea why the market is behaving as it is and that doesn’t bother me at all. As you have probably picked up from the other place, I work with the outcomes of other people’s actions, compare them against previous examples and do a value assessment as to whether what is happening offers me an opportunity to join in or not.
The bounce off 67p, the reverse before dropping through 123p, the breakout through 138p, the reappearance of the support at 165p - I’ve switched off the “Why?” part of the brain and am just going with the flow :)
I posted last week we would be absolutely tanking by now and I think even against the positive OP we would not be breaking 52week highs as we have over the last month or so.
I’m my opinion there’s a big plan playing out which in includes the IOCs and will be revealed soon, maybe after the budget is signed which could be the catalyst....
The increase of 11k bopd is significant in % terms for GKP but much less so for the the KRG.
Given that they have now missed a payment to all the IOCs, when they should also have started the agreed repayment plans for some of them; makes me very concerned.
Two extreme thoughts to maybe set the bookends, they either feel bullet proof and can repeatedly break any contract at will without fear of retribution or they are basically bankrupt.
They are GKP’s sole customer and yet the share price is moving up very nicely.
So which matters more, any individual’s analysis of the situation surrounding GKP or the price of a share?
I’d go for what is happening to the share price as opposed to what I think it ought to be doing but some VLTH might disagree.
Jón Ferrier, said on 13th January: "We look forward to updating guidance once conditions allow resumption of the 55,000 bopd expansion."
Jon Harris, said on 16th February: "As conditions continue to improve, we look forward to resuming the 55,000 bopd expansion project and shareholder distributions."
So, Brent crude steady rise, box ticked. Regular payments, slight delay this month, but for all Kurdistan Operators.
So when will they announce the definitive update on the 55k bond work program? Is, as FlyingHorse1 suspects, the debt repayment plan agreement a factor for the BOD? I would have to agree and say yes.
Seems clear that GKP have decided not to move to 55kpd until KRG pay off the $74m debt. KRG have treated GKP really badly for many years. Is it time for the boot to be on the other foot? No pay no extra oil? With oil prices on the rocket up KRG must be furious they might miss out big time.