focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Hedge Funds Increasingly Move Out of Oil.
Amidst widespread recession fears, hedge funds and other money managers have been quitting their oil positions at one of the fastest rates in the post-pandemic period, selling a total of 201 million barrels in the past four weeks.
Iraq Oil Report.
11th July 2022
Iraq-Turkey arbitration ruling nears, with Kurdistan’s oil independence in the balance
The eight-year-old case, likely to be decided within the coming months, could give Baghdad major leverage in its campaign to end the KRG's oil sector independence and open a door to negotiate water rights with Turkey.
https://www.iraqoilreport.com/news/iraq-turkey-arbitration-ruling-nears-with-kurdistans-oil-independence-in-the-balance-44981/
Victor,
you should not close your eyes to other factors that also have an influence on how GKP's value is perceived.
It seems quite clear that the cluster of wells SH-12/13/14/15 are not delivering as hoped-for and that additional wells will be needed to achieve anything even close to the targeted 55Mbopd.
The forecast $85-$95M Net Capex FY22 figure will have to be increased to reflect this additional work.
This refers to the use by the KRG of the Kirkuk-Ceyhan pipeline, which is subject to a sovereign agreement between Iraq and Turkey. It was put before the Paris-based court some years ago.
Being reported this morning by Iraq Oil Report:
Iraq-Turkey arbitration ruling nears, with Kurdistan’s oil independence in the balance
The eight-year-old case, likely to be decided within the coming months, could give Baghdad major leverage in its campaign to end the KRG's oil sector independence and open a door to negotiate water rights with Turkey
ANKARA - As Iraq's federal government escalates its campaign against the Kurdistan region's oil sector independence, perhaps its most important legal action is an eight-year-old arbitration case against Turkey that is nearing a decisive ruling with the potential to jeopardize Kurdistan's crude exports of more than 400,000 barrels per day.
Two senior Iraqi officials said they do not expect a final decision or award at a hearing this week at the International Chamber of Commerce's International Court of Arbitration in Paris, but government leaders and industry officials in Baghdad, Erbil, and Ankara all expect the proceedings to conclude later this year and anticipate a ruling in Iraq's favor.
MEED are reporting today that a 2nd drill rig will go out to tender for GKP - and that another rig presently on-site at SH will have its contract extended.
https://www.meed.com/iraq-focused-oil-firm-to-tender-second-drill-rig
and what exactly did Nadhim Zahawi "do" to you...?
He had nothing to do with the 1st Bond Wipeout.
What exactly he did for GKP at the end of the day remains unclear - but for sure the idea behind his hiring was to facilitate easier coordination / discussion / negotiation with the Kurdish authorities, with potential benefits all round. An Iraqi Kurd able to represent your interests, and to point out the dangers in your negotiated terms, or your misapplied pressures, is theoretically of great benefit.
These attacks on him reek of racial prejudice.
I see Iraq Oil Report says the GKP contract will be discussed on 17th July:
Court postpones hearing on Gulf Keystone contract with KRG
Days after declaring four of Kurdistan's oil contracts to be invalid, Baghdad court schedules a hearing on three others for July 17.
BAGHDAD - The Karkh Commercial Court in Baghdad has postponed a ruling on the validity of UK-listed Gulf Keystone's contract with the Kurdistan Regional Government (KRG).
"Today's session is postponed until July 17, 2022, to give the plaintiff's representatives time to provide the court with a copy of the production sharing contract related to the defendant," said Judge Mohammed Ali Mahmoud Nadeem at a brief court session Wednesday.
Cash as per June-24 was $247M.
Leaving the bank acc very shortly are following payments:
$25M dividend
$5M bond interest
$50M special dividend
$100M - $102M bond redemption (incl redemption incentive)
(July bond redemption is not guaranteed - it could easily slip to Aug)
Cash burn from June-24 approx $12m - $15M?
PLUS
Receipts expected for Apr sales ca $41M?
Leaves how much in the coffers?
The Iraq central government decided that all companies cancel or refuse to honour their KRG contracts - whereupon the Big Three oilfield service companies (Baker Hughes, Schlumberger and Halliburton) caved.
Begs the question whether other such specialist contractors (Chinese, Korean, Russian, Azerbaijan, etc) will also have to bend the knee?
If so, the consequences will be very severe, as none of the oil companies working in KRG have the knowledge (or the people) to handle the specialist tasks undertaken by these companies.
Hey, Opu!
Sing the Happy Song again . you know, the one you do best!
What a silly chap you are; don't you know that GKP relies completely on specialist contractors for almost everything?
Drilling wells, well completions, fitting ESPs, etc, etc.
Too much salt is bad for you...
Interesting piece this am by SVETANA PARASKOVA writing for OilPrice - read it if you can.
Here's a snippet:
"The new dilemma for OPEC+ is whether to cave to the increasing pressure and boost supply, thus sacrificing what precious little spare capacity the world has. Alternatively, the group could stick to its guns, keep that spare capacity intact, and let an economic slowdown or a recession solve the soaring oil price problem from the demand side. "
I see Halliburton have also now joined Schlumberger and Baker Hughes in notifying Iraq's Oil Ministry that it will comply with a Federal Supreme Court (FSC) ruling invalidating the legal foundations of Iraqi Kurdistan’s energy sector.
This getting rather serious now - these are the three top companies in their respective fields.
Another poster was severely castigated (yesterday?, post now removed) when he seemed to suggest that Russia was not losing the war.
I see today's Telegraph's has a similar contribution by Jeremy Warner entitled: "The dismal truth is that Putin is winning the economic war" - Touche.
Here's a taste of what Warner writes:
"The dismal truth is that sanctions are not working in the way that had been hoped. Putin is progressively losing his Western markets, but at this stage it doesn't really matter because skyrocketing prices provide compensating rewards. At the same time, sanctions have greatly contributed to a politically destabilising cost of living squeeze across the Western world. Putin can reasonably claim to be winning the economic war, even if the physical one is in stalemate."
Even if you do not agree with everything he writes, the general thrust of his views is worthy of serious consideration.
I see Blackrock again doing what they do best - dropping back under the radar, trading the pants of it.
Long-and-Strong, eh?
No - just like toppy-uppy Opu.
Ignore the writing on the wall, let's hear that song again Opu!
Cookie,
thanks for posting that.
Apart from their Miran/Bina Bawi work, I'm not sure what other work Baker Hughes currently have in KRI, but for sure they have the potential for lots more down South.
I'm surprised at the lack of discussion re the KRG proposal to create a new company / organization - KROC, to develop their oil exploration activities. This could be a precursor to major changes in their current PSC-driven work with the smaller oil companies such as GKP.
There are several ways in which the current PSCs could be absorbed into a new format - which could overcome some, perhaps even most, of the objections raised by Baghdad.
In conjunction with that, there are also several ways in which the new, KRG company KROC could allow some participation (aka shareholding) by other companies sub-contracting to it; although quite how their individual contributions (production) would then translate to revenues will demand some keen thinking!
The KROC statement warrants more interest IMO.
Why do this?
Currently the company has $247M cash.
Being paid out in the next few weeks is: $25M dividend (15th Jly?) plus $50M special divi (29th Jly?) plus Bond Interest $5M (25th Jly).
Total of $80M - plus another $12M or so operating costs, so $92M pulling down that number.
On the positive side, April receipts (due around end July) should be around $37M or so, and May receipts should be even better at ca $44M, but...
Why reduce the healthy cash float so much by calling the $100M bond now?
Is the company trying to pressurize the MNR?
What if the new, approved FDP starting gun is fired?
In these volatile conditions it's unwise IMO.
If you can be bothered, take a look at P5 of the AGM Presentation - the graphic showing field output over the last 12 months, with notes ref the various technical issues affecting production.
Look closely at the period Oct-21 thru June-22.
What does that tell you?
Start thinking...
Take off the sunglasses, you cannot see properly.
Output today is the same as Oct-2021.
The Eastern side of the field is very problematic - that cluster of wells to the N of SH2.
Only going one way now...
NOT a good update.
Apart from confirming the dividends, #15 looks to be a poor producer, as does #14.
Concerning to see further confirmation of water handling being required to allow production increase.
Output still stuck at 46Mbopd.
Interesting formulation: "...we continue to progress towards sanction with the MNR".
FDP still not agreed
I expect the SP to go South.