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17% rise out of thin air . . . .
Am I sensing some news is imminent?
PART 2
December 26th 2019 - Irish Independent article:
"The Iraqis have slowly managed to increase their production; they are one of the top producers again, with great potential. We will definitely have several attractive opportunities there."
"He added that for Petrel, "there won't be production next year; we will have to shoot some seismic [surveys]".
"We have got a couple of projects that will come back to life hopefully [KD: Block 6 and Merjan?]"
May 26th 2020 - Placing RNS:
"Subject to the appointment of responsible officials by the new Iraqi Government [KD: Done] and the lifting of Covid-19 restrictions [KD: Flights now resumed], Petrel expects to enter into re-qualification discussions with the appropriate decision-makers at the Ministry of Oil. Discussions may cover Petrel's past studies on the Merjan-Kifl-West Kifl area, and the Mesozoic and Paleozoic potential of the Western Desert". [i.e. Block 6]
June 2020 - Email from David:
"...it is clear from the Merjan logs (on the 1982 Mobil well) that the oil reservoir is much greater than the numbers calculated"
My note: The currently recorded reserves are 760 million barrels in place, so Merjan could easily have 1 billion+ barrels.
July 24th 2020 - David's answers to questions:
Q: Has MERJAN perhaps become a very realistic opportunity again?
DH: Inshalla. With updated fiscal terms, Merjan becomes attractive.
Q:Has Block 6 perhaps become a very realistic opportunity again?
DH:Inshalla. The jihadi threat has greatly diminished, though Petrel will again have to spend time with local communities.
Focus on gas
As we know, Iraq has a renewed focus on gas as they want to:
- provide electricity to all (via gas power plants)
- become self-sufficient in domestic gas
- stop the costly importing of Iranian gas
- make money by exporting excess gas
This massive demand for gas will come from processing the flared gas (from oil fields) but will also require new gas fields to be discovered and developed.
In David's answers above, he appears equally positive about their chances with both Block 6 and Merjan.
We know that Block 6 is considered gas prone but Merjan may also be gas prone according to a 2016 article in the Iraqi Journal of Science which concluded that "The phenomenon of gas was shown clearly at the west of well Me-1".
So, putting it all together - the desire by Iraq to increase gas production, Petrel's huge experience and knowledge of Block 6/Merjan areas, Merjan and Block 6 continually being mentioned together in recent RNS's/articles/annual report, combined with DH's positivity on both, makes me conjecture that it would make great sense for the IOM to award Petrel both gas prone areas of Block 6 and Merjan in their pursuit of increasing gas capacity.
And if that's not all, the US army and its allies yesterday withdrew from the Basmaya base and are re-basing at Baghdad and Ain al-Asad Airbase right next to Block 6 and Merjan
kdickson
26 Jul '20 - 21:33 - 16844 of 16846
0 5 0
MERJAN (and BLOCK 6)
Just been going through a timeline of all references to Merjan and I personally believe that, on balance, Merjan probably is the asset that DH states they are currently in 'commercially sensitive' talks about with the Iraqi authorities. It makes complete and obvious sense that this could/should be the case once you absorb all the 'evidence' below as a whole. Same for Block 6, although I've focussed on Merjan mainly.
October 2005 - Petrel signs a Technical Cooperation Agreement to study the discovered, but undeveloped, Merjan oil field with their strategic 50% partner Itochu. Estimated reserves of 760 million barrels are in place.
May 2007 - Merjan work was successfully completed.
June 2008 - Annual Report:
"Petrel continues to discuss the [Merjan] project with Ministry technical experts to update its work with additional information to refine reserve estimates. We anticipate further progress and involvement in this area"...We are interested in exploring and developing this field if and when it is legally and politically possible".
June 2009 - Annual Report (chairman's statement and MD's report):
"All existing data was reviewed and analysed, and development proposals prepared. We have indicated to the authorities that we would develop Merjan".
"We are [KD: still] interested in further exploring and developing this field if and when it is legally possible. The field has the possibility to become a 100,000 barrel a day producer.
"The ideal outcome for Petrel is to turn the existing Subba and Luhais contract into a Production Sharing Agreement..... Failing this, a PSA on Merjan would build on the work done by Petrel".
2009 to 2011 - Petrel were still stating in their AR's that they were interested in exploring and developing Merjan.
December 2018 - Irish Independent article:
Mr Horgan added that "once a contract is awarded to the group “on favourable terms”, it is ready to start work".
“We have already done very extensive work, worked up drill targets [KD: he could be talking about Merjan or Block 6 here] and there has been a lot of interest from international majors, particularly a large Japanese company, Itochu, who joint-ventured with us in Iraq before [KD: on Merjan]” he said.
“If we can get confirmed title in the western desert of Iraq [KD: now he's definitely meaning Block 6], we would go ahead and drill within a year. So if we confirm the contract with the government of Baghdad, I think we could get back into the tribal communities and negotiate a work programme.”
September 2019 - Interim Report:
The improving security situation in western Iraq has again made possible field-work on prime western desert exploration blocks, including Block 6, on which we worked from 2002. Similarly, the Merjan oil discovery...which has recently been packaged with Kifl & West Kifl oil fields, has arisen as a possible developmen