Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Did Bloomberg ask any other questions?
Minister, with reference to the conditions set out by APIKUR that need to be in place before exports can restart.
Minister, will the proposed amendment to the budget meet the requirements of APIKUR regarding the commercial equivalence of the reviewed and amended contracts?
Minister, have APIKUR approved the mechanism for repaying the outstanding debts, who will act as guarantor?
Minister, have you discussed any of this with APIKUR since the meeting in January?
@JLB58, I reached exactly the same conclusion using the same information in the same way. There are those who would suggest it might be an idea for you to seek help đ.
I pictured the accounts payable as being composed of two distinct groups, unavoidable historic ones and those arising from recent production.
The excess monthly cash has been used to pay off the historic ones rather than being banked.
Whatâs left now in accounts payable will either be almost completely or completely down to current production.
If correct then the company will be in a self funding profit generating state.
@itsaponzi, the company will have adapted production to match the demand at the price they are prepared to sell at, I.e. one where they still make a profit after costs.
Who owns the oil in the ground? All the people of Iraq.
Who has the right to bring it to the surface? GKP
Who has the right to take a share of production and sell it at whatever price they want? GKP
Hmmmm! So a valuable resource is being sold off profitably, but very cheaply, by someone who doesnât originally own it and the original owners canât prevent it?
Long live PSCs!
@Armas, there is a counter argument about the message that might end up being sent.
One problem with dividends is that it allows investors to take the cash and not re-invest it in the company.
The message that sends is that even holders think there is better value to be had elsewhere and they want non-holders to do the buying and drive the ex-div price back up.
If that doesnât happen the total return from the dividend distribution could end up neutral, the income gain is offset by the capital loss of it going ex-div..
The buyback requires those who want to take their cash distribution out to actively do something I.e. sell a proportion of their increased % holding in the company. Given that many, if not all, of the LTH have demonstrated an unwillingness to sell at any stage, then that should boost the effect of the buyback.
@ValueS, does it run through any disputed territory?
Are there any reasons you are aware of that might cause the FGI to NOT start exporting Kirkuk oil with immediate effect?
If you canât, and no one else can either, then how about there are unresolved issues about exporting ANY oil through Turkish ports, never mind just Kurdish?
Within the three main factions, Sunni, Shiite and Kurdish, each has their own hostile sub factions, the resulting central government ( if they manage to form one) is an ineffective coalition.
There is further opportunity for disagreement when it comes to federalism versus centralism, not only with openly conflicting interpretations of the Constitution but also with mundane tasks.
Add in long-standing nepotism and corruption and where we are now should come as no surprise to any investor who did their DD before buying.
Two examples currently in focus are the âcost per barrelâ and the salaries being held back.
The way the FGI arrived at their initial figure for the costs was bizzare and IMO reflects the capabilities of the people employed. There is a very hard hitting quote, from an unnamed industry source, circulating about the quality of the work done arriving at that figure.
Under a federalist system itâs the role of the KRG to sort the salaries out after the previously agreed budget share has been sent from the centre. On the other hand the centralists want to control how the money is spent and will only send it when they are happy blatant opportunities for corruption have been removedâŚ
Baghdad canât write new PSCs or deal directly with existing ones under local laws following the FSC ruling of Feb â22.
They can however deal with the KRG in terms of finances and let the KRG deal directly with the IOCs under the PSCs as covered by international contract law.
As long as there is commercial equivalence the proposed method is almost irrelevant. What matters is how it will be enforced and how past arrears will be paid - does the concept of a guarantee exist in Iraq?
@Kheldar, thanks for getting to grips with sorting that.
I still cannot get my head around the need for some form of sharing contract to be in place wrt commercial equivalence (as also proposed for Rounds 5+ and 6) where the shared amount varies with the PoO; compared with this apparent focus the Governments have with a fixed return irrespective of the PoO.
If only we knew what they mean by the âcost of productionâ and how any fixed average cost would be applied to each individual IOC.
It could all be linked back to a proposition that was floated right at the start. SOMO sell the oil, the money raised goes to Baghdad, the budget share gets sent back to the KRG (which includes the total approved costs for all the IOCs under the new agreement between the governments) and the KRG pay the individual IOCs what the PSCs require them to. Any surplus or deficit is for the KRG to bank or fund.
What could possibly go wrong with that sequence?
There was a piece much earlier today on kurdustan24.net for the locals but not the English version.
It simply stated that the two governments had agreed a price.
It did not mention a what the agreed figure was or what part if any an IOC had played in the process.
It implied the KRG was now happy to begin exporting but didnât say that the IOCs had agreed to anything.
$20.61 is four significant figures, where are they getting that degre of precision from?!
@Kheldar, how does the existence of a Short hold the Price down?
Someone posted that there were roughly 2% of the shares which were Short at that time.
So that leaves 98% which are in the free float or Long.
Does the Short position really have a 49:1 gearing effect on sentiment?
What % of the shares were held by the top 5 holders as the Price dropped from over 300p to just over 80p?
Why didnât the existence of non-sellers hold the Price up? Which should happen if the Shorts can hold the Price down, if the market is even remotely efficient.
@Kheldar, when I wrote, â So it might be zero but it could also be something elseâ thatâs what I meant but your post explains very clearly how it could have worked in practice.
Hope the upward trend continues and it encourages some more closing of Shorts putting even more pressure on the Bid.
@Kheldar, you wrote, âMillennium quickly closed their short position last week. Why do you think they did that?â
The shorttracker link you provided has a disclaimer about any 0% that occurs in their tables of shorts held.
âNotice: We no longer track disclosures after they drop below 0.5%. It is possible that the manager still holds a short position even if we are showing it as zero.â
So it might be zero but it could also be something else, aka chocolate fireguard quality info. đ
There are two demands that APIKUR included in the original negotiating position, commercial equivalence and schedule for repaying arrears.
Letâs focus on the positive about the latter one.
As far as I can tell, not one local politician has lied about sorting the arrears out.
On the other hand that could well be because none of the locals on either side ever mentions how it is going to get sorted.
From the APIKUR site.
https://www.apikur.uk/publications/apikur-denies-government-of-iraq-claims-of-a-deal-to-resume-oil-exports-from-iraq-s-kurdistan-region/
Caveat emptor when it comes to using X based local language sound bites, from publicity seeking politicians aiming at a specific home grown target audience.
Now I am confused!
What gavsgear posted shows that there there is no agreement to resume exports because there are still differences that need resolving.
The one I posted was much more positive, that very important proviso about not yet having reached full agreement was missing.
Link to what I posted is below, seems there are edited versions of the same story on the same website.
https://www.kurdistan24.net/en/story/34163-Erbil,-Baghdad-agreed-to-resume-Kurdistan-Region-oil-exports,-says-Iraqi-spox?
Whole article is below. First paragraph generates the headline, the rest is all Turkey related, not surprising since he was talking to CNN Turk. If true Iâd expect the whole article to be about the pipeline with every news site in the region pumping out quotes.
âERBIL (Kurdistan24) â Iraqi Foreign Minister and Deputy Prime Minister Fuad Hussein on Friday told CNN Turk that âErbil and Baghdad have agreed to resume oil exports from the Kurdistan Region.â
"The Kurdistan Workers' Party (PKK) has become a problem for the Kurdistan Region, Iraq, and Turkey," Hussein stated, adding that the Iraqi government should not permit the PKK to remain on its territory.
According to the Iraqi Foreign Minister, the PKK has political parties and civil society organizations in Iraq, but the situation is different in Turkey, so they have become a problem.
Concerning the tensions between Turkey and the Patriotic Union of Kurdistan (PUK), Hussein stated that relations between the PUK and Turkey were once good, but they are now deteriorating. âThe problems between the PUK and Turkey should be resolved.â
Iraq's Foreign Minister also noted that the development road project will be of great importance to Iraq and Turkey and will provide a direct link between the two countries.
Regarding the Turkish Presidentâs visit to Iraq in April he said that they would âwelcome Recep Tayyip Erdogan in April.â
He also revealed that a top Iraqi government delegation will visit Ankara next month to discuss the PKK, water issues, and bilateral relations.
The Iraqi official visited Turkey on Thursday to attend the Antalya Diplomacy Forum, which is an annual conference on international diplomacy that has been held in Antalya, Turkey since 2021.â