Petrel bemoans Baghdad bad debt

The share price of Petrel Resources took a dive Wednesday morning after the Iraq-focused oil company said it has been waiting 16 months to be paid the $54m it is owed for work done on the Subba and Luhais contract.Despite offering to take payment in oil rather than cash, negotiations for settlement of the debt have reached a stalemate.The company said it has enough money to keep operating for another 18 months, thanks to funding received from institutional investors in March.Revenue for 2008 collapsed to €8.23m from €28.95m the year before, while the loss before tax widened to €0.76m from €0.52m in 2007.Despite its immensely frustrating experiences in Iraq, the company wants to continue operating in the country ‘as a principal, not a contractor,’ chairman John Teeling said.‘The opportunity in Iraqi oil has not changed. Oil costs US$2 a barrel to produce. There are over 70 known fields waiting to be developed. It makes absolutely no sense that oil production in Iraq is falling to less than 2.4m barrels a day when it can rise to 10m barrels a day. Iraq badly needs the revenue and the world needs the oil,’ Teeling said.‘We believe that we can work through the labyrinth of Baghdad, get paid, and deliver a 200,000 barrel a day oil field to the people of Iraq,’ Teeling added. Petrel Resources