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Says surreyscot aka highlander7 , part of the cabal of real fraudsters on the other board that have polluted the debate about GKP for years , spinning their lies and deceit about how wonderful everything is with the company and the SH wells, how there is no water being produced, how easy and cheap it will be to deal with the sour gas issue, how the high Sulphur content is not a problem as S is so easy to remove and is so valuable anyway, how the SH-6 water well was a real beauty, how there is no danger to the KRG from Baghdad interfering with contracts, how the brave Kurds can face down anything that Baghdad throws at them, how the ICG ruling is meaningless and how, if things do get rough how the USA is going to come to the rescue of the KRG, Barzani and his clan.
Well, at the end of the day the Iraq Army didn't have to march into the export station at Faysh Khabur - the keys were given to them.
Visit the other place and make up your own mind as to who con men really are and ask yourself, why do they do it, who do they work for?
Perhaps we should adopt the food packaging labelling - "Warning - may contain nuts!"
As they say, Caveat emptor
Heh Mr GRH1, sailing under false colours...
It's still there - completely unedited for you to enjoy.
And that just shows how ignorant and devious you are!
I stated that the Iraq army could take over the Export Metering- and Pumping Station at Faysh Khabur - nowhere did I opine that it could or would take over Kurdish oilfields.
People - be warned about this particular poster!
I expect the Iraq-Turkey pipeline agreement to be amended very shortly - the unrealistic tariff rates from 2010 (last amendment) to be increased (cost more) and the annual guaranteed throughput numbers to be revised yet again.
I also expect the Kurdish PSC terms to be severely modified (downgraded), with the Profit Oil element being the one to suffer most. The Cost Oil element (currently max 40% for GKP/MOL) will also be under attack in my opinion, but reducing the existing, generous CO payback rate will greatly effect the willingness (and ability) of the OilCos to speedily implement future expansion plans - especially gas plans, so that might give cooler heads pause for thought. I certainly wouldn't rule out cancelling dividend payments until all of this mess has been settled.
Good mornin Armas,
have a look at what happened to the previous attempts to utilize the WSW routes...
Bandit Country, everywhere you look.
Now, looking at the Southern route possibility, why would you want to put all your eggs in one basket...again?
Talk about grasping at straws.
A presentation from 2007 - and every one of these "alternatve routes" is followed by a question mark!
Get real...
What follows may be considered by some as boring history, but believe me it is VERY relevant to the ongoing and complicated pipeline discussions between Iraq and Turkey. I offer it as a counterpoint to those who state that the decision awaited is a simple and straightforward one.
Turkey financed their portions of the expensive (twin) Iraq-Ceyhan pipeline from Ceyhan to the Turkish border at Ovakoy; Iraq financed their (much shorter) portion from the Turkish border down to Kirkuk.
The 2010 revision (to the original 1973 pipeline agreement, as subsequently amended July-1985) incorporated a modified tariff structure as follows:
Article 3 “Throughput Capacity and Minimum Guaranteed Throughput”
3.1 The throughput capacity of ITP is (70.9) MTA
3.2 The Iraqi Side undertakes to deliver the following Minimum Guaranteed Throughput to the Turkish Side via the ITP:
2010 22MTA
2011 27MTA
2012 32MTA
2013 and beyond 35 MTA (MTA = Million tons per annum)
If the existing 70.9MTA throughput capacity of the pipeline is reduced to a quantity for any reason that is not attributable to the Turkish Side, the Minimum Guaranteed Throughput that the Iraqi Side shall deliver to the system nevertheless remains as above. Nothing, except force majeure conditions that are mentioned in the Agreement and this Amendment, shall prevent the Iraqi Side from complying with its commitments as provided in this Article. The Minimum Guaranteed Throughput shall remain valid throughout the validity period of this agreement.”
The Tariff & Payments Structure of the July-195 Amendment was also revised and agreed in the 2010 revision, as follows:
$1.18 / bbl up to 22MTA
$1.15 / bbl up to 27MTA
$1.13 / bbl up to 32MTA
$1.09 / bbl up to 35MTA
$1.03 / bbl up to 22MTA
$0.96 / bbl up to 55MTA
$0.94 / bbl up to 60MTA
$0.90 / bbl up to 70.9MTA
Article 4 “Tariffs and Payments” sets out a Tariff Indexing Clause as follows:
“The tariff of transport in article 4.1 above shall be updated every (5) years time period considering 1st January 2011 as the base year for the first (5) years period. The tariff shall be adjusted based on the United States of America CPI-U (Consumer Price Index All Urban Consumers – www.bls.gov) annual data.”
Article 8 of the August 1973 Agreement was completely amended in Clause 4.3, as follows:
“The remuneration mentioned in Article 4.1 above shall include transportation cost, labour cost, repair and maintenance costs of the systems, all kinds of system renewal expenses, all of the costs regarding transportation and loading of Crude Oil, protection charges, duties and taxes. Services that are rendered to the tankers such as port services are not included to the amount.”
My Notes: I calculate current KBT as approx. 7 stb / ton, so 35MTA equates to ca. 245MMstb pa or about 670Mbopd.
@Armas,
that conclusion would perhaps be a bit premature - but it's disconverting to say the least.
Re continuation of as-is implementation of the Kurdish PSCs.
If Baghdad says the pipeline will only be opened if your foreign oil companies agree to a revision of their contracts, there would appear to be nothing stopping the KRG/MNR from declaring force majeure, perhaps frustration, on their PSC contracts with the oil companies presently active there.
Should one of the Contracting Parties (KRG/MNR) be unable to perform their obligations due to such a supervening event beyond their control (Baghdad saying N0), and should that result in continued production by the oil companies being inadvisable, commercially impracticable, illegal or impossible, then it seems pretty clear that your (oil company) choices are extremely limited...
Hi Cookie, thanks for that.
2 things immediately jump out at me:
A. (3)...oil funds shall be deposited....and only the KRG shall have the right to spend them.
B. (1) Oil sales must be returned to SOMO.
Sticking points indeed...
According to the revised sovereign pipeline agreement dated Sept-2010, Iraq is obliged to deliver a MINIMUM throughput of 35MTA.
Assuming a KBT of approx 25API, this equates very roughly to 244,000,000 stb per annum or 667,000 bopd.
The agreement states quite explicitly that nothing, except force majeure, shall prevent the Iraqi side from complying with the agreement.
The pipeline tariff for 35MTA (indexed of course) is/was clearly stated (then) as $1-09/stb.
Putting aside the DAESH years, the disagreement with the Semi-Autonomous Region of Kurdistan can hardly be termed a force majeure condition.
Just for your information...
Error
Should of course have read "PF-2 has better road links"
Apologies!
@TM,
1. PF-1 has better road links...to the KAR Refinery "just down the road".
2. The crude grades from PF-2 are well-liked by / more suited to KAR.
3. The cluster of wells feeding PF2 react very badly to being shut-in.
Re the possible re-jigging of the Production Sharing Contract:
Assuming a healthy forward loading of Capex Costs, the current PSC, using say $80/bbl Brent and 50MbopD, generates about $5/bbl Profit Oil (depends on what WI% and Capacity Building Tax etc you plug in to your model).
This is more than double what many of the TSCs in S. Iraq generate.
It therefore seems quite likely that, as Baghdad takes the reins, either a full-blown TSC will be forced upon the Kurd oilies or a hybrid version - both of which will generate less Profit Oil per bbl.
From Euro-Petrole article couple of days ago:
DNO ASA. The Norwegian oil and gas operator, today reported that cumulative oil production from its Peshkabir field in the Kurdistan region of Iraq has broken through the 100 million-barrel milestone less than six years after startup. The field was initially estimated to contain proven and probable reserves of 75 million barrels of oil commingled with associated gas.
In 2020, DNO completed a USD 110 million project to capture, transport and inject the commingled gas into the neighboring Tawke field to achieve the triple goals of reducing greenhouse gas emissions, enhancing oil recovery and saving gas for future use, in what is the first and only such project in Kurdistan.
“Even though Peshkabir has already delivered more oil than we thought it held, we now project that there are at least another 100 million barrels still to be produced from this prolific field,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “Team DNO has succeeded in getting oil out of the ground in record time and at industry beating costs while adjusting drainage strategy as understanding of the reservoir grows,” he added.
Mr. Mossavar-Rahmani went on to say that DNO firmly believes there are more Tawkes and Peshkabirs in Kurdistan and that the Company is well positioned to find and tap them. Cumulative oil production from DNO’s currently operated fields is approaching 440 million barrels.
Development of the Peshkabir field continues with the drilling of new wells and initiation of water and gas injection pilot projects to assess additional oil recovery potential. Earlier this month, field production was reduced from about 60,000 barrels of oil per day (bopd) to 43,000 bopd for maintenance workovers, including to replace downhole pumps. Once completed, the Company expects to recover full field production by end April and retains its 2023 production projection of 100,000 bopd for the Tawke license. DNO operates and has a 75 percent stake in this license containing the Tawke and Peshkabir fields with partner Genel Energy plc holding the balance.
The ruling, so we are informed, covers only the period from 2014 thru 2018.
It is therefore to be expected that compensation payment for the later years, 2018 until now, will - in view of the very different (higher) crude prices, be critical in underpining any potential agreement between Iraq and Turkey
Hi Cookie, thank you for that.
Did you notice the Argus report re the ICC ruling just posted? Wonder how this will influence things - I see they're already celebrating down in Basrah:
Iraq wins arbitration over KRG's Turkey crude exports
Published date: 24 March 2023
Share:
Iraq tonight was officially informed by Turkey that an international arbitration court ruled in its favor in the long-running case against Ankara over Kurdish crude exports, a source with knowledge of the matter told Argus, in yet another blow to Iraq's semi-autonomous Kurdish region.
Turkey also said it will not allow shipments carrying crude from the Iraqi Kurdistan region to leave its coastal port of Ceyhan without the consent of the federal government in Baghdad, the source added.
Where does it state that the PSC (term) will be extended?
Good morning,
Approx $67Mio if you use a different $/bbl number.
...the hardware assets (by dint of their Capex costs having been pretty well completely recovered by CO returns) are effectively owned by the KRG, and not by the company?
The contract to develop, the PSC, is of course another matter but even that is thrown open to question when this particular question is answered.
Surely the answer is by how well the company is managing its resource - their ability to produce oil from the SH field?
How open then, once the hardware asset has been removed from the equation, is THAT particular evaluation to be measured - taking into account what other potential developers might claim to be able to achieve?
Once the 55Mbopd target has been achieved, say by end-23, new perpectives open up...