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SAUDI ARABIA AND RUSSIA BOTH WANT $100 OIL
By Julianne Geiger - Sep 16, 2022
OPEC+ heavyweights Saudi Arabia and Russia, with their +11 million bpd quotas, are looking at $100 oil as a fair price good for all, anonymous Reuters sources familiar with both Russian and Saudi Arabian government thinking said.
Russia and Saudi Arabia, who together make up more than half of OPEC+'s total quota, are widely considered the leaders of the OPEC+ group, and a $100 preference could lead to an active defense of this desired floor price.
OPEC has long decried the accusation that it targets specific oil prices—rather, as OPEC says, it looks to keep the oil market in balance. However, oil prices still have a role to play in maintaining that balance.
The OPEC+ officials, who wish to remain anonymous, said that OPEC+ has sent out signals that it prefers a price around $90 or $100 per Brent barrel—higher, as Reuters points out, than some in the industry had previously thought.
In the August OPEC+ meeting, when oil prices were near $100 but falling, OPEC+ took action—albeit minor action—to defend this price by cutting 100,000 bpd off its production quota. It wasn't enough to keep Brent prices near $100, but perhaps it has helped to keep Brent prices above $90 for the most part, as it fights against recession fears that seek to spook the market into believing crude oil demand could slump amid tough economic times.
As to why OPEC+ seems to have raised its desired floor price, one of Reuters Saudi sources indicated that materials costs have risen with inflation and that crude producers need more revenue to make up for higher production costs.
"An oil price at $120-130 is risky and Saudi will prevent that, but at $100 it won't have a huge impact on the global economy - Saudi would be comfortable with that price," one of the anonymous sources said.
As for Russia, which has had to offer its oil at discounts for months, it wants to see oil at no less than $100 per barrel, two Reuters sources familiar with Russian thinking said.
With both Saudi Arabia and Russia backing the $100 oil horse, it could only be a matter of time before OPEC+ agrees to actively defend this price level by cutting production.
By Julianne Geiger for Oilprice.com
I would like to hear from these Climate Change Fanatics how we supply enough electricity for this country ( and the charging of millions of electric vehicles in 2030 ) when the wind doesnt blow and its dull.
I had hoped these incompetents had learned a lesson , but listening to some of them on GB news makes me wonder if they have.
The ICG does not have a legal case that will stand scrutiny in an International Court. They know it. The Kurds know it and so do the Oil Companies. Because if they did they would be in that same court.
Its a negotiating ploy IMO.
By "GAS" of course I mean fuel gas such as methane. Downhole gas contains all sorts of impurities such as H2S /CO2 and Nitrogen in some cases and has to be cleaned and polished. Unlike re injection gas that can just be pushed back down more or less "as is".
They dont have any plans at present to sell the gas to market . The FDP plans to reinject it back down the well to enhance flow rates so far as I can see. In any case I doubt they would have enough gas currently to justify the project costs. That may change of course when they reach 110k bbls a day.
IMO
TBH Im convinced that Broadfraud still doesnt understand the difference between Oil in Place (OIP) and Recoverable Oil nor does he understand that the recoverable factor ( given as a %) can vary across the field and in any case is always estimated on the conservative side. This is one of the reasons big fields get bigger .
Despite myself, I am thinking a deal is on its way.
As others have pointed out - too many surrounding factors suggest it must be close, particularly paying out nearly all the available cash in dividends and paying off the remaining loan notes when we have submitted a FDP which requires hundreds of millions to fund, when being silent about how GKP would fund its share of FDP funding costs - madness.
Like others, I too have come to the view it is an agreed deal - the KRG are paying us faster than they might otherwise - both in clearing down the arrears and in the recent monthly payments - not only simplifying the financial position should it be a company takeover, but demonstrating to the acquiror(s) that the KRG are a reliable financial partner.
Factors required before any change in ownership of shaikan include,
KRG approval- (tacitly agreed with the recent payment history)
Bond Holders approval (now our well known major shareholders - they are desperate to get out, 100%);
In all likelihood, the USA - KRG rely upon the USA in their struggles with Baghdad (various statements from the USA clearly demonstrate how much they value the KRG, plus how clearly relations with Baghdad are strained due to the Iranian influence in Iraq; furthermore Joe Biden wants more oil being pumped, just not in the US; Plus any sensible acquiror would want the O&G law agreed.
From reading various reports, including many posted here, it strikes me that we are indeed close to an agreement between Baghdad and Erbil, such that the acquiror(s) will press head with the FDP. The extent to which there is an accepted arrangement between Baghdad and Erbil will have a marked impact on the takeover price.
Difficult to write this, but I do think shaikan will be sold by Christmas - and that is Christmas 2022.
The timing is right with regard to the oil and gas price.
Cant come soon enough for me.
I am not expecting any major announcement on 1 September - what could they announce? However, further dividend payments will continue to make many believe GKP have no intention of proceeding with the FDP they submitted to the KRG - which many of us think was a selling document for possible acquiror(s) to undertake due diligence upon.
It just doesnt make any sense if we are not well down the road with discussions on selling shaikan.
Oh well.
Let me dream.
So PUTUP is basically implying that Ben Brewerton's CV is "exaggerated" ? Utter nonsense , his CV and career would have been examined in detail by the Head Hunters. A falsified CV at that level means instant dismissal and career destroyed.
I doubt it...you seem to be the only one that knows about it. Post the links.
This from Bloomberg.
"Additionally, reports indicated that Russia’s exports rose again in July, finding a way to energy-hungry emerging markets after being rejected by Europe, the U.S., and Japan"
IF the EU and UK stick to the sanctions regarding the use of Russian Oil then you dont need to be too smart to figure out where the OP is going this winter. The big question is will they secretly abandon the sanctions for political reasons ?
We need combined UN/IMF and US pressure on the Iraqi's who are of course being played by Iran to keep the Yanks out of Iraq.
As always Civil unrest will help bring about the change required - as it always does.
IMO
****eye used to call herself Oilman63 over on ADVFN.
Until the avatar was banned.
We havent been summoned to court because there is not a case to answer. If there were , the KRG would have been in court a decade ago.
Dont they teach trolls logic these days ?
The Shaikan PSC was investigated by Exxon Mobils Legal team over a decade ago and found to be legal. (It might still be on the XOM website ) but in any case , be assured that IF this were NOT the case and the PSC was illegal then the ICG would have laid claim to it a long time ago. This is s a final attempt by the Iranians to prevent possible Kurdist autonomy.
IMO
That why Jahid pulled out. Offshore accounts.
He would have been crucified by the press.
I thought it was all Todd Kozels fault ?
You know , he tied them all down and forced them to buy GKP shares ?
LOL
That all the trolls on here and ADVFN are taking the time to tell us how improbable a sale is and , even if it happens , it will be for a pittance ?
As I have said before they give the game away every time.
SS
I remember Jeremy Asher ( Tower Resources ) telling us all it was worth $10 billion back in the day. ( The OP was about the same as it is now BTW , but the world wasnt short of Oil )
Now that he is Chancellor his earnings will be fully investigated because he has to declare them.
In spite of him admitting on ADVFN that he holds GKP shares .
Just for the record , there are thousands of specialist Service Companies worldwide. All they have to do is pre qualify to be allowed to bid for work. This qualification is basically to have a recognised Quality Assurance System in place and to demonstrate how they assess staff competence. It is not rocket science.