Tag Archive | "ExxonMobil"

Mystery Buyer of Kurdish Oil Revealed


After months of remaining out of public knowledge, the buyer of Kurdish oil in America has been revealed.

The chemical firm LyondellBasell purchased two tankers worth of Kurdish oil in May. The shipments totaled nearly 533,000 barrels of oil and at the time did not result in any legal action.

Data retrieved from the U.S. Energy Information Administration (EIA) revealed that the chemical make up of the crude oil from those two shipments matched characteristics of oil from the Shaikan field in Kurdistan.

Over the past two years the Kurdistan Regional Government (KRG) has sold almost 20 million barrels of oil. Kurdistan continues to have bases of operations for many major oil companies including Chevron, BP, and ExxonMobil.

(Source: Reuters)

(Picture: LyondellBasell)

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Oil Price Surges amid Iraq Turmoil


By John Cookson. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Traders will tell you the price of oil is a speculative market based on expectations. Most of Iraq’s oil production is from the mega fields in the south, far from any fighting. But in the world’s skittish bourses just a threat to exports is enough to cause market jitters.

Iraq was expected to contribute to 60 percent of OPEC’s crude production in the next 10 years so its output had become important for the long-term global energy market.

Small wonder, as country slides towards possible civil war, some analysts predict the price of a barrel of oil could soar by US$30.

The jihadists lightning assault in the north of Iraq last week caused Brent crude to spike to US$113, and the price could rise still further today with the news ISIS seized another town,Tal Afar, in the north west and still had their sights on Baghdad.

The US Embassy in Baghdad has relocated some staff to its consulates in Erbil and Basrah and to Jordan. The oil industry has reacted too with majors like BP at Rumaila and ExxonMobil in West Qurna evacuating all but vital expatriate staff.

The oil companies are playing down any sense of panic. ExxonMobil is not commenting on the crisis and BP said simply the violence in Iraq “has no impact,” on production at Rumaila. Royal Dutch Shell at Al Majnoon put a statement out saying safety and security of staff was: “an absolute priority.”

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Capital Gain Tax on IOCs in Iraq


By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Many countries impose capital gain tax on individuals, companies and corporations when a profit realized from the sale of assets. National and state legislation often has a large array of fiscal obligations and regulations regarding capital gains, however, these fiscal obligations may vary from jurisdiction to jurisdiction.

In other words capital gain tax is a normal component of taxation systems on both national and international levels, and thus has a significant contribution to the state revenues and fiscal policies. Iraq is no different and should consider doing the same.

In Iraq the signed service contracts provide the IOCs with a possibility to assign (sell) wholly or partly their participating interests as specified by a common clause in the signed contract, “any Company shall have the right to assign any of its Participating Interest, shares, rights, privileges, duties or obligations under this Contract to an Affiliate.” Such right for assignment is subject to and governed by a set of provisions outlined in the signed contract.

Due to the long duration of the contracts (the Term) that extend beyond 20 years, and due to the usual practice of Merger and Acquisition (M&A) in the international petroleum business it is highly probable that IOCs might “farm in” and “farm out” by acquiring, selling or exchange participation interests in the related petroleum field.

The transfer of participation interests between IOCs involves financial transactions or transfer of “asset” ownership between the concerned parties: the buyer and the seller.  This assignment deal may (though highly likely) results in significant realized gain (profit) for the selling party compared to the actual cost (investment) it made as a consequence to its participation in the related upstream petroleum development project.

 This realized gain is known to be “capital gain” and in most countries it is taxable. The “Capital Gain Tax” is imposed on individuals, companies and corporations and in many countries it is imposed in addition to other direct taxes such as “Property/Wealth Tax” and “Income Tax” among others. The percentage of Capital Gain Tax differs according to the taxation systems and fiscal policies across the world. 

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Turkish Firm to Build Exxon Pipeline


By John Lee.

Energy Global reports that the Turkish construction firm EID Insaat is to build a 120-km pipeline for ExxonMobil in Iraq.

The $90-million project is expected to take approximately one year to complete.

The company Chairman said that this was in addition to an 85-km long pipeline project currently under construction.

The Iraqi marker accounts for 70% of the business volume of EID Insaat, which has operations in the energy and construction sectors in the Middle East and Russia.

(Source: Energy Global)

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China Consolidates Position in Iraqi Petroleum Sector


By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

China and CNPC are Consolidating Further their Positions in Iraq Petroleum Sector

Four years after the first bid round took place, some international oil companes (IOCs) are consolidating their positions. while others are descending after good start, and some were even unable to make an entry. CNPC stands among the first group, while ExxonMobil exemplifies the second group, and companies such as Chevron, Repsol and Conoco Phillips fall into the third group.

In a previous paper I addressed how Russia has entrenched and solidified its role in the Iraqi petroleum sector. This paper is mainly about CNPC’s path to consolidating its presence in this sector.

Please click here to read Ahmed Mousa Jiyad’s report.

Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya@online.no, Skype ID: Ahmed Mousa Jiyad).

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ExxonMobil Sells Stakes in West Qurna I


By John Lee.

ExxonMobil signed agreements on Thursday with PetroChina for a 25 percent participating interest in the West Qurna I project in Iraq, and with Indonesia’s Pertamina for a 10 percent participating interest in West Qurna I.

ExxonMobil retains 25 percent interest and remains lead contractor.

The transfer has been approved by the South Oil Company, Oil Exploration Company of the Iraqi Ministry of Oil and Shell West Qurna B.V., as members of the West Qurna I contractor consortium.

China is already the top foreign player in Iraq’s oilfields.

(Source: ExxonMobil)

(Picture: Rex Tillerson, chairman, president, and CEO of Exxon )

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Turkey Unlikely to Upset Iraq in KRG Energy Deal


By Semih Idiz for Al-Monitor . Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

It is no secret, thanks to frequent leaks to the media, that energy cooperation between Turkey and the Kurdistan Regional Government (KRG) is continuing apace. This, however, has not broken the determination by both sides to maintain a low-key position on the subject. The sensitivity is due to strained ties between Baghdad, Ankara and Erbil over a number of issues, including the exploitation of northern Iraqi oil and gas.

The KRG has been demanding an independent say over the gas and oil in its region, arguing that Baghdad has not honored its pledge to give the Iraqi Kurds their rightful share of Iraq’s oil revenues. Baghdad denies this and has declared the KRG’s stance illegal and dangerous in terms of Iraq’s territorial integrity.

Baghdad has also accused Turkey of endangering Iraq’s territorial integrity through separate energy deals with the KRG, and has US support on this point. This, however, has not prevented energy cooperation between Turkey and the KRG. Turkish officials say if the United States is concerned, it should first convince the American oil giants Exxon and Chevron, who have also signed deals with the KRG.

An exclusive Reuters report this week, citing unidentified official sources, also showed that Turkey and the KRG are pushing ahead with “a comprehensive package of deals” in the energy field. This package, reportedly agreed on during last week’s visit to Istanbul by KRG Prime Minister Nechirvan Barzani, includes multibillion-dollar oil and gas pipelines between Turkey and northern Iraq.

According to the Reuters report, these will enable the KRG to export some 2 million barrels per day of oil to world markets, and at least 10 billion cubic meters of gas to Turkey annually when completed. The first pipeline is almost ready and should be pumping oil by the end of December. The next stage will be to pump northern Iraqi gas by pipeline as of December 2016. The technical details for a pipeline that will carry heavy oil between northern Iraq and Turkey are also said to have been mapped.

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Nineveh Takes Steps towards Energy Independence


By John Lee.

The Governor of Nineveh province, Atheel al Nujaifi (pictured), has told Reuters that Baghdad has focused on the giant southern oilfields and has paid little attention to developing resources in his province.

The province has started talks with oil companies, including Exxon Mobil, and is drafting terms to attract investment. Nujaifi added:

We are not ready to wait for decades until the crude runs out from the south to start energy investment in Nineveh province … We listened to [oil companies'] proposals about how to best invest in Nineveh, but we did not sign deals.

We will start oil investments in the province with a priority to the downstream industry, and that could be followed by broader investments in the upstream sector … When we have oil majors working, then definitely there will be social benefits, job opportunities and economic gains. Huge investments could create a better, stable environment.”

Last month the provincial council of the predominantly Sunni Muslim governorate granted him the power to sign deals with foreign oil firms independently of Baghdad, which immediately rejected the move.

The governor has drafted regulations that could allow foreign investors to bid for an integrated project to build a 150,000 barrels per day (bpd) refinery and develop an oilfield to feed it.

Nujaifi said the province holds around 20 discovered but untapped oilfields and has the potential for huge resources that have yet to be discovered.

(Source: Reuters)

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