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Iraqi PM Meets KRG Delegation, Orders Resumption of Oil Operations Across Kurdistan

Baghdad moves to restore Kurdistan Region oil operations after conflict-driven disruptions, as Erbil and Baghdad deepen economic coordination following a landmark diplomatic push.

https://www.kurdistan24.net/en/story/917838

There is a good update article from Garrett Soden, the CEO, that clarifies the damage is limited. Do use google translate.

Buying opportunity.

https://efn.se/oljebolaget-mitt-i-krisen-nastintill-otankbart

Just had a call with friend from Kurdistan. There are flares visible. I hear that both DNO and ShaMaran are producing

Probably not announcing it because of the security situation.

You can access the session recordings of ShaMaran presentation at Sparebank conference:

https://sb1markets.gallery.video/ec2026/.

Access code: EC2026.

Investors are worried that ShaMaran will issue tons of new shares in Oslo, that investors will lose their voting rights and that it will cost them money to convert from the Swedish share to SDRs.

ShaMaran cannot keep the Swedish shares as a Bermuda company. They have to use SDRs.

There is no cost for Swedish shareholders to hold SDRs, and there is no difference between SDRs and the underlying shares.

The Bermuda-Oslo structure will be much better for paying dividends — no withholding tax like in Canada.

ShaMaran posted description on their website. Do share

https://shamaranpetroleum.com/site/assets/files/5599/simplified-roadmap-for-investors-final3.pdf

We wrote a detailed ShaMaran thesis on our Substack, on our blog and on Seeking Alpha - search for it under FitInvestmentIdeas.

Today a reader send questions on Baker MckEnzie possible further delay and on comparison between the SNM and others that sell oil locally. I share below my response:

WoodMac has a fixed-price contract with Baghdad so they have no incentive to delay their report or to spend more hours on it than necessary. 

 

The delay on the report due date from December 31 to March 31 was because Baghdad was distracted by the election in November and did not engage WoodMac until December.  They were supposed to engage WoodMac immediately after the pipeline opened at the end of September.  Typical of the region.

 

The companies that are exporting (GKP, SNM, etc.) are being paid the same as they were under local sales (about $32/bbl on their net entitlement—see the SNM slide online that explains this).  They sell all of their oil to SOMO (with better Iraq sovereign credit risk) and are paid directly by Vitol.  There was an initial working capital risk when the pipeline opened because of the longer payment terms (30 days) than local sales, but payments started in December and have not stopped, so there is no advantage now to selling locally.  Plus, the exporting companies are building a receivable on top (about $25/bbl at $65 oil) to be paid after the WoodMac report.  So, they are already recognizing full price for their oil since the end of last September.

 

The companies that chose not to export (DNO and Genel) are getting paid a discount to their previous local sales (now about $30/bbl) because the local trader has to make a profit buying their oil and then putting it into the pipeline for export (at $32/bbl).  Worse than that, they are not accruing any receivable for the additional amount that would be due after the WoodMac report.  It was a very expensive hedge by DNO/Genel and totally stupid.

ShaMaran posted new investor presentation on their web

https://shamaranpetroleum.com/investors/presentations-videos/

Arcitic securities:

Gulf Keystone :first export payment received

GKP released an operational update this morning, reporting a cash balance of USD 75m as of 9 December (vs. ARCe YE’25 estimate of USD 78m). YTD gross production averaged 41,400 bopd, consistent with the tightened 2025 guidance of 40,000–42,000 bopd (ARCe: 40,600 bopd), with December running at ~44,000 bopd. The company highlighted a seamless transition from trucking to pipeline exports via the Iraq–Türkiye Pipeline since late September, with volumes quickly ramping to full well capacity. Importantly, GKP has now received its first payment for export liftings, with realised prices of USD ~30/bbl under the interim export agreements, marking a slight improvement versus local sales. These interim agreements are expected to continue into 2026 pending an independent review of IOC invoices, after which a reconciliation to full PSC entitlement at international prices is anticipated. GKP also noted ongoing negotiations with the KRG regarding historical Shaikan commercial matters, including arrears, with further updates to follow. Looking ahead, the 2026 work program will embed optionality to restart drilling alongside continued facility upgrades, contingent on consistent export payments and a return to international pricing. Gulf Keystone also continues to consider a potential listing of its shares on the Euronext Growth Oslo, subject to favourable market conditions.

Pareto research summary on ShaMaran Petroleum

The Kurdistan consolidator

ShaMaran has demonstrated an impressive ability to secure and act on acquisition opportunities in Kurdistan. This has handsomely rewarded shareholders, the stock is up 5x since the start of 2024, and made it the largest beneficiary of recently resumed oil exports. The first payment from federally controlled sales is expected shortly, which will help derisk the new lifting arrangements. Thereafter, an independent PSC audit is scheduled to be completed early next year and trigger an increase in transfers to reflect contractual terms. If successful, we estimate ShaMaran’s FCF’26 at USD 180m at Brent USD 65/bbl. This is almost 2x local sales and up 60-80% from current export payments. ShaMaran is on track to be net cash by mid-2026e, which we believe is likely to result in commencement of dividend payments. In addition, resumed exports may trigger M&A with ShaMaran positioned as the natural consolidator in Kurdistan given its solid M&A track-record. BUY/TP SEK 2.20

A deep dive into the pipeline reopening deal and implications for ShaMaran

Description why the ShaMAran did not move on pipeline reopening and why it should move shortly in the Q1 26.

https://fitinvestmentideas.com/2025/10/05/shamaran-petroleum-deal-misunderstood-material-upside-potential/

Treasury Intensifies Pressure on Iranian Oil Smuggling and Sanctions Evasion Schemes in Iraq

“Iraq cannot become a safe haven for terrorists, which is why the United States is working to counter Iran’s influence in the country,” said Secretary of the Treasury Scott Bessent. “By targeting Iran’s oil revenue stream, Treasury will further degrade the regime’s ability to carry out attacks against the United States and its allies. We remain committed to an oil supply free from Iran and will continue our efforts to disrupt the ongoing attempts by Tehran to evade U.S. sanctions.”

Click here to watch a video from Secretary Bessent on today's action.

https://home.treasury.gov/news/press-releases/sb0233

Erbil, Baghdad Sign Oil Export Mechanism Agreement

Erbil and Baghdad have signed a new oil export mechanism agreement. The KRG will retain 50,000 bpd for domestic use, with the remainder handed to SOMO for export. Final implementation now awaits talks with Türkiye.

https://www.kurdistan24.net/en/story/857585

Why Turkey plans to end its 52-year Iraq oil pipeline deal

Turkey can negotiate a direct agreement for pipeline exports with Kurdistan starting July 2026. This weakens Baghdad in the negotiation.

Why Turkey plans to end its 52-year oil pipeline deal with Iraq - AL-Monitor: The Middle Eastʼs leading independent news source since 2012

Https://www.youtube.com/watch?v=6g_u4YNOAck

The meetings between the Iraqi government and the Kurdistan Regional Government (KRG) will conclude today, with draft agreements set to be presented to the Iraqi Council of Ministers on Tuesday, paving the way for the resumption of oil exports and the disbursement of civil servant salaries in the Kurdistan Region, sources familiar with the matter told Zoom News.

Very positive article - negotiations on reopening are intensifying

https://www.kurdistan24.net/index.php/en/story/848780

Kurdistan Prime Minister Barzani interview with Fox News on his visit to Washington

- met with Marco Rubio, US Energy Minister, and Homeland and Energy ministers (secretaries)

- Announced new deals signed with US companies

- pipeline reopening bullish

https://youtu.be/aOv-sbnmm-U?si=HDA-cZItdiMT_t9v

Do read:

https://x.com/K24English/status/1922620182377238542

One question for everybody

Shamaran has two blocks in Kurdistan. Both blocks are operated by HKN, a Ross Perot company.

The President of HKN is Mark Rollins

https://www.hknenergy.com/about-us/our-senior-team/

Mark Rollins has a wife named Broke Rollins. She is the Minister of Agriculture in the current Trump administration.

https://en.wikipedia.org/wiki/Brooke_Rollins

Is there anybody here who thinks that the pipeline will not reopen??

The whole interview:

- on partnership with SKM, one of the biggest lithium mining companies

- on tantalum that we are now shipping on a monthly basis

- we will be opening new mines in the future

https://www.miningweekly.com/article/andrada-looking-to-opening-more-mines-in-namibia-2025-04-16