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It would be foolish to think that expiry of the Ceyhan Pipeline Agreement next year would somehow give the KRG an advantage.
The Import/Export trade leverage that Baghdad has with Turkey greatly exceeds anything that Barzani & Co. can offer and will be excercised to the full.
Thanks BroadfordBay,
Do you still stand by your claim that the Crude from GKP wont be put into the export pipeline. You expressed those concerns several times, to try and cause negativity. So the expiry of the Ceyhan pipeline wont give the KRG an advantage should be viewed with the same pinch of salt, because I actually believe it most certainly will.
Belgrano,
I expresed the view that only a proportion of SH crude would be accepted into the pipeline - and I also gave you my reasons for believing that.
Namely that SOMO now wishes to market an export grade very close to the old Kirkuk grade, that the inputs SOMO has in mind from the Kirkuk fields mean that not all of the heavy crude produced can be put into the pipe as the target API quality would be pulled down.
As for trying to cause negativity, a bit more objectivity here would be welcome...
Thankyou for your reply Broadford,
Clearly the API of the crude mix would depend of the flowrates from each company so appreciate that it makes it impossible to hit the percentage squarely on the head but have you run any rough calcs to see if in this situation what percentage would be required.
Clearly if pipeline flow, and then control of a new lighter grade come to pass what percentage of our output would fit.
However I do have doubts whether they would actually go down this path today due to the high demand in the med region for heavy crudes. Partly due to Russian flows being diverted more easterly, so not only having heavy crudes in demand but holding up buoyant prices.
Belgrano,
it would not please anyone to have my detailed calculations re the various inputs, especially re the low numbers indicated for SH Heavy volumes.
What I will say, however, is that it is a reasonably straightforward calculation to make - if you invest the time. Start with the near-Kirkuk fields that will be contributing and use 350,000bopd as the volume "coming up the pipe". Assume for the moment that the Ceyhan export pipeline will not be stressed above ca 450Mbopd - max 500Mbop. Adding ca 100Mbopd of the known local crudes that hope to be included in the final blend (ST, T&P, AT & SH) and trying to achieve close to Kirkuk API grade for the total 450Mbopd - 500Mbopd is then the challenge.
I subscribe to the premise that SOMO will attempt to have a stable and defined export grade - you may not accept that.
Hi Broadford,
I welcome all genuine discussion, and sorry if I came across too strong earlier. I accept your viewpoint but to me a couple of other things come to mind which might complicate things.
Firstly the pumping with the multistage crude pumps probably spec'd to a heavier crude grade than than the SOMO one. We both know that any lights can flash in these pumps causing cavitation and damage, so a spec change would require a fair bit of investigation before putting it into use, better to start with what you know (Kurdish blend), and move slowly later on.
Next is the actual agreement which we are not party too right now. May well be the case that SOMO will control the purse strings and sales, but Kurdistan controls the feed quality as long as they achieve the min targets. This is especially relevant if you wanted to continue to supply the light Kurdish teapots, which are just simple flash distillation units. So points even stronger to things remaining on the feed side to what they were before closure.
Best regards,Bel.
However I do accept that SOMO would like a stable and defined crude quality blend. However it might be a Kurdish heavy blend one. Crude slates do have quite a few parameters with the API just being one aspect, I found the actual breakdown of the crude to be the most important along with critical items like ammonia, and impurities which might cause super active sites when cracked. Clearly sulphur will be a refinery limiter on many if the requirement is to run full.
However some heavy crudes containing long chains produce unequal and large amounts of decent C8-C10 molecules when cracked which can easily be upgraded and segregated to liquids worth ten times the base crude cost. (thats conservative).
We know generally the lighter crudes give more naphtha's, but if you have the complexity like in some of the top nelson index rated sites heavier slates return the best margins.
Hi Belgrano,
I don't think our viewpoints are all that far apart - it's just that I start from a different assumption; that being SOMO will want a defined grade, fullstop.
If you look at how they have now come to market Basrah Crudes as 3 distinct grades, the historical reasons for that being wildly fluctuating quality and the associated quality de-escalators (aka discounts). I do not believe they are interested in just selling high quantities of crude. The pumping implications are what they are and grade stability is important there too. My main point is that the Feed from the near-Kirkuk fields will have a certain API and adding KRI volumes to that will change its API. The previously-marketed KRI blend is NOT the same as the near-Kirkuk feed (the expected 350Mbopd feed mentioned by SOMO sources) and nor will it remain, IMO, at the previous level.
Central point being that SOMO will market a grade - to which KRG crudes will be welcome, but only insofar as their volumes do not change the export grade parameters too much.
I think Basrah grades are currently: Light=31.5API &S=2.75%, Medium=28API &S=3%, Heavy=24API &S=4%.
Acc to my calcs, letting the complete KRI field production into the pipeline blend would not only exceed the planned short-term pipeline flow targets (e.g. 450Mbopd) but would decrease the export blend API / density to nearer 24API &S=4.5%. That would then be a head-on competitor with Basrah Heavy.
SOMO seem to have the bit between their teeth in respect of the 350,000bopd planned Ceyhan pipeline output from the Avana, Bai Hassan, Jambour and Khabbaz fields and I don't see how they can keep that quallity if all the KRI crudes are then added.
Hilarious cope on here today.
The share price went up, get over it.
@unwin - a share price rise seems to trigger some here for some reason 😂.
GKP has even been name checked by a top EU fund. Shockingly he has not listened to our resident LSE sludge experts either.
https://www.eleconomista.es/mercados-cotizaciones/noticias/12523048/11/23/cirene-capital-los-value-que-no-invierten-en-tecnologicas-se-pierden-grandes-oportunidades.html
https://twitter.com/IPCastelblanque/status/1790087119962083338
ATB to all shareholders
Weird how foreign funds know the massive value here.
£4 right now would still be ridiculously low.
I’m trying to buy as many as I can as fast as I can.
It’s an absolutely no brainer. .
We have some financial entities, like ABN, for example, that we think are at a reasonable price. Energy companies for me are also arbitrations. We have more or less 13% of the portfolio in companies mainly in exploration and production, such as Gulf Keystone Petroleum, an English firm that has its main asset in Iraq. We have had Santander, to mention a Spanish financial institution, which we also bought very cheap and sold because there were others that seemed more interesting to us. Or Stellantis.