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Happy to wait it out.
GLA
I think the following statement says it all …. In a significant announcement, Prime Minister Al-Sudani extended the application deadline for the fifth and sixth licensing rounds by two weeks,
Not surprised at all that they wish to extend the time period. They want as many companies as possible to participate.
Why....Well corruption in Iraq starts the moment you express an interest in helping them.
Participation fees for rounds 5 and 6 are $100,000 each.... Lots of extra payments if successful as well. Nice little earner for nothing, just accepting them at your meetings.
I see SNM reporting local sales net price was $36.49/bbl in Q1.
How much lower will the SH number be?
@belgrano, the article about the 30% rise in pump prices read as if this was down to the state subsidy being removed. As usual there were no figures that allowed us to check if this was the sole reason, or one of many including having to pay more for local oil.
No doubt the comment an IOC made about increased demand for heavier oil was true from their point of view.
Obvious question though, heavier than what API? Were they talking about 28, 26,………,18 being equally in demand?
GKP used to produce production figures on a monthly basis in presentations and payments from the KRG that went with the relevant invoices in an RNS.
They could remove any hopes/fears about what is happening now to the price of Shaikan by doing a monthly RNS combining production and cash up front.
The counter argument is that if nothing is changing then why issue an RNS?
" In this case GKP should provide an update, certainly if there has been a meaningful price increase since their last reported 25 dollars. "
If there were meaningful news to convey, they'd have to provide an update. They haven't.
I think the following statement says it all …. In a significant announcement, Prime Minister Al-Sudani extended the application deadline for the fifth and sixth licensing rounds by two weeks,
Why else would they extend it ? They may be getting the message now albeit slowly … if you don’t get enough interest in your offer you’ve got to look at what’s on offer simples. Sitting round tables now and basically begging companies is a long way from sifting through cvs as they would have hoped. Leave them to drink their frogging oil for another 15 months then see where they are. Bring on electric everything and they’ll be wishing they’d cooperated years ago. Rant over lol
DNO have a very dynamic, ME recognized and flamboyant MD in Bijan M-Rahmani.
My sizeable DNO investment feels secure in his hands.
….. Who was that running GKP again ??
Hi Rog,
We know that prices paid at the pumps in Iraq have increased by a third almost overnight and crude prices paid for DNO are now high 30's.
We were also informed that there is a bit of a shortage of heavy crude availability currently, which is a little surprising.
Hearing that DNO in discussions about exporting also good news as it tends to indicate all the IOC's are also involved.
For my part I don't need a current upgrade on local sales prices, and certainly not anything that might inspire false hope of exports like the DNO one has.
If our company publicly states its doing well, it weakens their hand when explaining why we require higher than normal profit return's . Better to say nothing, and then let us all know when and if crude exports are starting, when its done due to having far too many false dawns on this already.
It will come fellow holders, and even if it doesn't , we can hold for the new contracts in 15 months.
Having taken notice of the price that DNO are securing for their ‘local ‘ oil sales I was expecting that GKPs share price would increase today, the fact that it hasn’t increased so far is disappointing and gives rise to the suspicion that GKP might not be achieving those higher prices. In this case GKP should provide an update, certainly if there has been a meaningful price increase since their last reported 25 dollars.
We shall see, if not via an update via results.
Thanks HGNAMED
Yes, DNO seems very confident in the future, wondering what they know we don’t? Also paying a divi!
GENL has also been increasing day by day( they have a 25% stake in Tawke).
I am surprised GKP hasn't gone up on such encouraging news and the price obtained for their oil.
Hi Morbox,
Good find, wonder if my old company XOM is there as its headquarters are in Houston. However they have pulled out of Iraq mainly due to the expected backhanders that all the Iraqi officials expect for doing their base job. Makes it impossible to comply with strict company ethics standards when they wont do anything unless given additional incentives which is a generous payoff. We are not talking a dollar or two for carrying bags , but blatant demands for serious sums such as permission to drill such and such wells with supporting infrastructure. Refuse and it sits in their in tray fore ever. Time is money for all western companies and they know it and play on it.
Glad to see they are looking at gas integration projects. The hardware for these is very expensive and it wont be cheap but they most certainly do need it, thats if you want to clean /treat and process the gas and not just re-inject it.
Exporting it collectively to Turkey and then into Europe would be best, and I'm sure Turkey would love to get involved but they wont do it for peanuts, and a good starting position would be getting Kurdish crude flowing again.
Its important to note that although SOMO has stated the the IOC's get more than the current awarded contracts and they require a law tweak to pay the rate, they have not said that the amount the IOC's receive is unfair. No one is looking for flaws in our current contracts and we should not go down this route at all. lets hope we here something substantial soon.
Fantastic drive to market Iraq and its resources. Can only be good news for the peoples of Iraq.
However:
Must get payments sorted out, a stable export structure, Kurdistan annexed (or cut out)….. and work at keeping your promises - or nobody will touch investing in you r country with a barge pole.
belgrano, with your comment this morning on the subject of international investment, interesting to see the below. hope they say why would we work with you when you treat companies like ****.
“ iraq’s prime minister courts american energy titans in houston roundtable, exploring opportunities in energy sector”
https://solarquarter.com/2024/05/08/iraqs-prime-minister-courts-american-energy-titans-in-houston-roundtable-exploring-opportunities-in-energy-sector/
DNO - very positive and encouraging report regarding Kurdistan...
* Production from flagship Tawke license (DNO 75 percent and operator) in
Kurdistan largely restored after March 2023 Iraq-Türkiye Pipeline shutdown
* Oil prices in Kurdistan cash and carry sales now in upper USD 30s per barrel
* Company engaged directly and with peer companies in discussions with
Kurdistan Regional Government to facilitate the reopening of the export
pipeline, which, if opened, would double DNO’s Kurdistan revenue
* Stepping up investments in Tawke license by restarting completion of three
development wells that were discontinued last year following pipeline shutdown
Link for DNO Presentation:
https://www.dno.no/media/yr0louwz/q1-2024-interim-results-presentation.pdf
I've spent the last year accumulating cheap stock, it'll eventually get sorted out and has allowed me a chance of finally getting some returns here with an achievable average which wasn't the case before the priorliwas closed.
I've waited 15 years so will continue to be patient and wait, good luck everyone else that's held strong.
I don't believe that any party will try to break GKP's contract by going into the nitty gritty and trying to claim this or that. Its a scaremongering tactic only. They would have to do it with every IOC in Kurdistan. This is at a time when Iraq and Kurdistan are trying to work together and get more international investment into the country. What kind of message would that send to any likely suitors.
Don’t think it will change anything but just had an X on it.
https://www.iraqoilreport.com/news/new-leadership-for-somo-46509/
Any of you guys/gals get the impression that year after year we are just being jerked around at the whims of those in power who are working to their own personal agendas ?
Article 40. Force Majeure
Most of the textual references in this clause are in respect of the CONTRACTOR, but the final 2 sub-clauses also bear scrutiny.
40.2 For the purpose of this Contract, “Force Majeure” means any event that is unforeseeable, insurmountable and irresistible, not due to any error or omission by the CONTRACTOR but due to circumstances beyond its control, which prevents or impedes execution of all or part of its obligations under this Contract. Such events shall include the following:
(My NB: there follows a list of events that can trigger FM, (a) thru (h))
40.2.(g) except in respect of the GOVERNMENT and/or any Public Company which may be a CONTRACTOR Entity, any acts or orders of the GOVERNMENT, any minister, ministry, department, sub-division, agency, authority, council, committee, or other constituent element thereof, or any corporation owned and/or controlled by any of the foregoing, and
40.2.(h) any acts or orders of any government claiming or asserting jurisdiction over the subject matter of this Contract, any minister, ministry, department, sub-division, agency, authority, council, committee, or other constituent element thereof, or any corporation owned and/or controlled by any of the foregoing.
40.3 The intention of the Parties is that Force Majeure shall receive the interpretation that complies most with prudent international petroleum industry practice. Force Majeure affecting a CONTRACTOR Entity of an Affiliated Company of a CONTRACTOR Entity shall be deemed Force Majeure affecting the CONTRACTOR if the consequences of such Force Majeure prevents the performance of any of the CONTRACTOR’s obligations under this Contract.
Provocative final Q: Is Texas Keystone still an "Associated Company" - or has it been fully absorbed?
@straycat, wrt #5.
On signing, the contract is either legal or illegal at creation and hence non-existent.
So I don’t believe adding clauses within the same contract, to protect yourself from it being illegal, would offer any protection. No-one can gain anything from a contract which was illegal at creation, which includes protection from the consequences of it being so.
There is some legal precedence that offers support to the KRG having the right to write the contract. That was at an International level in a London court. The FGI though can always choose to ignore such rulings and as the song goes, carry on regardless.
“Which he’ll be working on as we speak. At least I hope so…”
I think you’ll find that little is happening currently (still)
Art. 43.3.
I’ve looked at this critical clause several times, and it’s problematic on several fronts:-
1) It was badly framed;
2) The main purpose of its inclusion should have been to pre-empt and prevent any external influence or interference in a contract freely negotiated and entered into between the Contractors and the KRG;
3) Clearly it was intended as a defensive mechanism to counter any anticipated legal attack by the ICG/FGI who might wish to challenge its legitimacy;
4) And although it’s very clumsily constructed, I reckon it does provide some ‘cover’ under English law. Certainly it was an attempt to protect the Contractors from any external threats to their investment positions;
5) But one of the key issues wasn’t addressed. Were the KRG acting ‘ultra vires’ when they entered into the contract in the first place?:
‘The Contractor has entered into this Contract on the basis of the legal, fiscal and economic framework prevailing at the Effective date.’
Well that’s all well and good, but if the ICG were to contest the very validity of that framework prevailing in 2007 and therefore its legitimacy, and if they were successful, then where did that leave the Contractors? Where did they go for recompense? And under what terms?. And who did they renegotiate their position as a producer with? And how did they recover their delinquent debt?;
6) That issue could/should have been covered in the Contract (and GKP should have insisted on it to safeguard their position);
7) I think the lawyers anticipated legal challenges as to the efficacy of the Contract. All parties’ were already accepting that it had risks associated with it, risks that the Contractors had agreed to and had embraced. Hence 43.3;
8) But did GKP know of the complexities of the constitutional relationships in place when they signed the contract? Because if they did, there’s an argument that they should have checked out the contractual legitimacy of their arrangements with the KRG before they signed off the agreement by covering their position with the ICG. And that would have involved a more protracted negotiation with the ICG…hindsight’s a wonderful thing…;
9) However, legally it seems to me that GKP may have a winning argument under English law. Unless they acted in bad faith.
But In the end, this won’t be settled in the English courts anyway.
There will be a significant renegotiation of terms with the ICG and JH will have to make serious judgments about what’s in GKP’s best interests.
And if he can’t get a result that works for GKP in the longer term, then he needs a back up plan.
Which he’ll be working on as we speak. At least I hope so…
All IMHO, DYOR.
Yawn
Broadford is only here to post negative points of view, surely you must all realize that by now!!!!
@BB, 43.3 reads to me as protecting the IOC’s commercial benefits from any amendments to the contract imposed by any entity, from anywhere, instigated by changes to any laws - rather all encompassing.
So IF it’s legal at signing it is protected - any amended one must be commercially equivalent.
In order to force through an uncommercial equivalent or withdraw it completely, the FGI would have to show it was illegal at signing.
There are those in Iraq who believe that to be true, based on their interpretation of the Constitution - basically the KRG could not sign an oil related contract without FGI involvement and approval, which was not forthcoming.
Not surprisingly there are others in Iraq who believe the Constitution does give the KRG the right to act independently of the FGI in such matters.