The ambiguities within the new Iraq Constitution have all been well aired, here and elsewhere. That's why we are where we are - the law was, in part, poorly drafted and allowed far too much free interpretation of what was meant to be.
(The much-touted and poorly drafted Minsk Agreements are similarly behind much of what is happening today in the Ukraine.)
In the Iraq constitution, for example; Article 115 says something to the effect that:
"The priority goes to the regional law in case of conflict between other powers shared between the federal government and regional governments".
In a similar vein, Article 121, 2 says something to the effect that:
"In case of a contradiction between regional and national legislation in respect to a matter outside the exclusive powers of the federal government, the regional authority shall have the right to amend the application of the national legislation within that region".
Finally, Article 126 states:
"...articles of the Constitution may not be amended if such amendment takes away from the powers of the regions that are not within the exclusive powers of the federal authorities, except by the approval of the legislative authority of the concerned region and the approval of the majority of its citizens in a general referendum".
There are no clear articles defining the powers of the Federal Government in respect of these matters; indeed the constitution states that in the event of contradictions between central and local laws of any regional administration, authority is conferred on the local administration.
I do not see this latest ruling holding up under international scrutiny; if anything it's just another opportunity for international lawyers to stir the pot and earn more millions.
@Barrik,
I have to admit I have not (yet) had the pleasure of visiting your beautiful country, but I have visited almost all of the adjacent countries (for security reasons that I cannot expand upon here, I could not visit Belorussia).
Maybe one day...
@putup,
I think the +10% might, just might, apply if Putin restricts his takeover to the Eastern regions where he (supposedly) has a lot of support - the regions bordering Sumy-Kharkiv-Luhans'k.
In the event that his troops advance to the Dniepr river (a tempting new borderline?) and even take Kyyv, that's 50% of the country - and the market's reaction IMO would be much heftier, perhaps up to 50% drop in EU markets for a few weeks until the fighting dies down and it becomes clear what Russia's new SW border strategy is intended to be.
The West did nothing about the 2014 annexation of the Krim/Crimea, so it's a distinct possibility that the poor Ukrainians will, again, be fed to the wolves.
Of course, Russia lost a real jewel when the Odessa ports were lost to them - perhaps that will also act as a magnet?
The west has affectively said "we will not fight Russians on Ukrainian soil", so it's got all the makings of a wet glove fight at the end of the day.
A lot of posturing, a lot of hot air, then a fast, clean surgical cut?
@tm,
as you seem rather interested in just how the Transition could work out, perhaps you might also be interested in exploring the potential implications of PSC Clause 26.7.
An interesting twist - here are the first 2 paras (the remaining sub-paras, plus the subsequent 26.8, are equally convoluted) :
"For each Semester, starting from the 1st of January of the Calendar Year following the Calendar Year in which First Production occurs, the CONTRACTOR shall Calculate the "R" Factor applicable to the relevant Semester within thirty (30) days of the beginning of such Semester. The "R" Factor to be applied during a Semester shall be that determined by applying the Cumulative Revenues actually received and the Cumulative Costs actually incurred up to and including the last day of the preceding Semester.
If the CONTRACTOR is unable to calculate the “R” Factor for the relevant Semester before an allocation of Profit Petroleum for such Semester must be mode, then the allocation of Profit Petroleum for the previous Semester shall be used for the relevant Semester. Upon the calculation of the "R” Factor for the relevant Semester:"
NB: Semester is defined in the PSC preamble as Six Months.
@tm, I haven't seen anything official about the FDP approval changing the terms of the PSC.
Acc to the 2013 Annual results, published on 24-Mar-2014, this FDP Approval is given as June-2013.
Reading thru the PSC I cannot find nothing about "FDP approval delays" having consequences for the contract term; if there had been any such adjustment agreed with MNR it would surely have been published as early as possible?
You don't mean the (still ongoing) dispute about payment for the oil produced during the Exploration Period ?
The Shaikan field was declared a Commercial Discovery in August 2012.
The initial FDP was submitted in January 2013.
This remains one of the best articles ever written about Kozel's crooked behaviour:
The Rise and Fall of a US Oilman in Iraq, by Daniel Balint-Kurti and Will Jordan for occrp.org.
May 2021
Should be required reading for every new GKP investor.
In addition to the prison sentence, KOZEL, 55, of New York, New York, was sentenced to two years of supervised release ...
It's quite clear the BOD are out of their depth - insofar as their understanding of the Eastern side of SH field goes .
The announcement of a ca 17p dividend would appear to be their attempt to divert criticism of a miserable performance.
Well, we shall see how far that gets them.
Expect enormous pressure from major holders - I'm sure the BOD would welcome a bid now at almost any price, just to get their heads out of the noose.
It is both silly and uneconomic to have each and every operator deal with their gas issues individually; far better to develop a gas-gathering plan & -infrastructure to serve several hi-volume fields. For that you need experienced people - people the Ministry does not (yet) have.
The 4 fields Jebel Simrit/Shaikan/Atrush/Swara Tika all have gas issues to deal with and, together, their gas output could easily justify the building of a gas treatment plant. There is also a major E-generating station very close to the SH block SW corner which was intended to utilize gas but, for various reasons, actually runs on oil.
Getting 4 operating consortiums to agree on such an added value investment takes time - and the exercise of leverage.
Some may want to use the gas for EOR, as DNO has done - if they can.
Others don't give a fig and just want to flare as long as possible.
It may well be that GKP (currently) has the money to move along with what they had planned - but that plan might no longer be the road the MNR now wishes to take, and the tempo might be changing.
We shall soon hear more about this.
Until the financial implications of any "approved FDP" are known, it would be most unwise for the BOD to splash out any, or much, more cash on buybacks IMO.
Apropos an earlier posting today, that particular risk, and other associated risk(s) relating to the poor flow of information regarding the latest drilling results, is very difficult if not impossible to quantify for people who have not been made privy to certain information; heavyweight shareholders have always had this info before the general retail trade.
@TM,
...the "rather poor reading" remark was in respect of the SH-13/-14 issues.
Any underlying payment issues pale into relative insignificance, IMO, when viewed against the leverage that MNR currently has over the company's mid-term financial planning - in relation to the updated field development plan, the gas issue and the move to 75Mbopd.
On the one hand the field, at current PoO and output, is an ATM on steroids.
On the other hand we are being told almost nothing...
Hi Cookie,
glad to hear that.
Error
...between $255M - $258M
Why were 2 payments made when the others had only one...
Was it to pad out the numbers for the EOY report, which would otherwise make rather poor reading...
Was it to soften the blow, to lighten the load, when the implications of the latest MNR agreement are made public in a couple of weeks...
I make current cash holding between $265M - $268M...
Gassy...
Where I come from the celebration of seeing out the old and welcoming in the new year is as much about remembering those who have gone before us, our departed family and friends, as it is about looking forward.
Without being mawkish about it, there are probably very few who haven't lost someone dear to them these last 12 months.
To those, and to the memory of my own departed, I raise my parting glass.
May 2022 bring you all good health, peace in your heart and healing in your soul.
Says surreyscot aka highlander7 from ADVFN...
Hi Cookie,
I'm sorry to hear your wife is suffering at a time we should all be counting our blessings; I sincerely hope she pulls through and comes out smiling.
Keep your chin up, you have many friends here.
Part 4 of the Prospectus issued at the time of Main Market Admission dated 20th March 2014 (P40) states quite clearly:
"...It should be noted that the UK Listing Authority will not have the authority to (and will not) monitor the Company’s compliance with any of the Listing Rules and/or any provision of the Model Code or those aspects of the Disclosure and Transparency Rules which the Company has indicated herein that it intends to comply with on a voluntary basis, nor to impose sanctions in respect of any failure by the Company to so comply."
The FDP is not something that GKP and MOL create and develop just by themselves.
The Management Committee (which includes 2 representatives each from the MNR, GKP and MOL) would have been closely involved with evaluating the ideas being put forward, their technical- and financial feasibility, and of course the financial consequences (including stock price development?) of these proposals.
As the development of the FDP has taken such a long time, it's probably safe to assume that significant disagreements had to be resolved along the way.
The fact that the plan has now been presented "officially" to the MNR, indicates to me that the Management Committee considers it "the best we could come up with at this time and under the circumstances". In no way can we assume that all of the contentious issues have been resolved IMO.
As the MNR committee representatives are essentially Technical, as opposed to Political, the fact that it is now being put on the table does not guarantee that the KRG/MNR will approve it, or even approve most of it.
That decision will be a political one - paying lip service perhaps to some of the technical issues being faced, but absolutely a political one.
The experience that Adnan Samarrai brought to such discussions / evaluations is something that cannot be replaced; it seems that technicians have lost out to political clout in the revamped Ministry of Natural Resources.