Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.
 

Companies Mentioned:

ExxonMobil, Lukoil, Statoil, Total, Samsung

Action Calls:

• National Reconciliation Conference looks dead, Sadrists ask their price: Nothing likely to come of it, unless it is to be used to announce developments elsewhere.
• Exxon moving into KRG: Exxon has their contractual commitments, so expect this to continue.
• Total close to securing Kurdistan oil rights: Just as we predicted, another major moving towards Kurdistan.

Headlines:

• Increasing attacks along the trigger line: Triggered by increasing political uncertainty, something to watch.
• Samsung wins $1 billion WQ-2 contract: Shows that life goes on in southern Iraq.

Calendar:

• 31 Jan – Parliament to reconvene
• This week – Exxon reports, Basra single point mooring set enter service
• Next month – National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.

The Sunday Times, citing unidentified industry sources, reports that French oil and gas producer Total is close to securing exploration rights over several exploration blocks in Iraqi Kurdistan.

A deal could be announced within weeks, according to the newspaper.

Chevron and ConocoPhillips are also believed to be competing for rights in the semi-autonomous region, following the announcement last year that ExxonMobil had acquired six exploration blocks in defiance of central government in Baghdad.

(Source: Bloomberg)

Despite objections from Baghdad, ExxonMobil already has personnel on the ground in Iraqi Kurdistan, according to Reuters.

Whiel the company has kept silent on its exploration agreement with the Kurdistan Regional Government (KRG), one central government regards as illegal, one Western industry source in Erbil told the news agency:

“They [Exxon] are definitely here and they are definitely assessing living and working accommodation … There are around 10 individuals here at any one time looking at what it takes to fully mobilise here – office space, housing space, these types of things. No oil company comes in in a day.“

Executives from Exxon reportedly met Ashti Hawrami, the region’s Natural Resources Minister, last week, and are preparing to issue a tender for seismic work for at least some of the six exploration blocks acquired in October.

Exxon has been summoned to the oil ministry in Baghdad for final talks, but it is unclear whether the discussions would take place before the company’s fourth quarter results on 31st January, when it is expected to publicly announce its Kurdistan investment.

In the meantime, however, it is business as usual at Exxon’s West Qurna-1 field in the south of the country, where output has risen to about 390,000 barrels per day, and where Exxon continues to lead a multi-billion dollar water injection project that is crucial to boosting output in the area.

The KRG is in talks with other oil majors and further agreements are expected in the coming months. Sources say France’s Total, which has a minority stake in the Halfaya oil field in southern Iraq, is keen to move into the north, possibly linking up with Anglo-French explorer Perenco in the Sindi-Amedi block along the Turkish border.

A Lukoil spokesman, on the other hand, dismissed the possibility of the Russian company heading north.

(Source: Reuters)

Prime Minister Barham Salih will hand over to former Prime Minister Nechirvan Barzani in a reshuffle of the Kurdistan Regional Government cabinet.

The move is part of the strategic alliance between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) which are in a coalition government. Under the agreement, Dr Salih was sworn in as prime minister for a two-year term in late 2009.

Yesterday Mr Barzani accepted the nomination of his party, the KDP, for the post of prime minister. He was selected because of his experience inside and outside government which is needed at a challenging time in the Kurdistan Region and Iraq as well as the Middle East.

Mr Barzani will continue to focus on improving the living standards of the people of Kurdistan, strengthening government and independent instititutions and upholding international standards of human rights, freedom of expression and the rule of law.

He will continue the policy of developing Kurdistan’s oil and gas sector, implementing strategic projects, and promoting international trade and investment.

(Source: KRG)

ShaMaran Petroleum has signed a final binding agreement with the Kurdistan Regional Government (“KRG”) to relinquish to the KRG the 60% working interests currently held in each of the Arbat and Pulkhana Production Sharing Contracts (“PSC”).

Under the terms of the agreement the PSC for each of the Pulkhana and Arbat blocks is terminated whereby ShaMaran’s interests in both PSC’s are relinquished. The Company has agreed to a payment to the KRG of consideration valued at $US25 million after which the Company will be relieved of all further obligations under the PSC’s.

This asset realignment will relieve the Company from the remaining work program obligations of Pulkhana and Arbat block, and allow ShaMaran to focus its activities and resources on the Atrush and Taza Blocks which the Company considers to be their most prospective blocks.

The Company, as part of General Exploration Partners Inc (“GEP”) and its partner Marathon Petroleum KDV B.V., are currently carrying out an appraisal program in the Atrush block in which a major discovery was announced in April 2011. This program consists of a 3D seismic survey which is underway and expected to be completed in the first quarter. The partnership is also planning to drill an appraisal well in the second quarter of 2012 followed by the installation of an early production system. ShaMaran, through its wholly owned subsidiary ShaMaran Ventures BV, has a 33.5% stake in GEP which is a party to the Atrush Block Production Sharing Contract and currently holds an 80% interest. Marathon Petroleum KDV B.V., a wholly owned subsidiary of Marathon Oil Corporation (NYSE: MRO), holds a 20% interest in the block.

The Company in coordination with Oil Search Iraq Limited (“OSIL”) is also planning to drill its first well in the Taza Block (formerly Block K42) in the second quarter of 2012. ShaMaran holds a 20% working interest in the PSC. OSIL is the operator with a 60% working interest in the PSC. The Kurdistan Regional Government of Iraq (“KRG”) holds a 20% working interest in the PSC with costs carried by ShaMaran and OSIL.

ShaMaran President and CEO Pradeep Kabra commented:

“This agreement allows ShaMaran to move forward in Kurdistan on its highly prospective remaining projects by removing the high financial obligations of the Pulkhana and Arbat blocks which were not as prospective as anticipated. We still consider Kurdistan to be one of the most attractive regions in the world to explore and develop oil projects and will continue to look for growth opportunities in the country.”

A member of the Dutch parliament, Van Bommel who is currently in Kurdistan Region on an official visit, said that the Netherlands is willing to increase its representation in the semi-autonomous region.

During a meeting with President of the Kurdistan Region, Massoud Barzani, he said that the goal of his visit to Kurdistan is to raise the level of Dutch representation in the Kurdistan Region to a “permanent representation” and to encourage Dutch companies to invest in the region.

Netherlands officially opened it’s consulate in Erbil in October of last year. The consulate, however , does not offer services like visas and passport renewal.

(Source: AKnews)

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.
 

Companies Mentioned:

DNO, Exxon, Genel Energy, Gulf Keystone, Longford, WesternZagros

Action Calls:

• As Maliki consolidates power, all eyes turn to Kurds: As we expected, Iraq’s future will be decided along Baghdad-Erbil axis.
• Gulf Keystone shares spike on PSC back-in rights: Not new news, unless someone actually knows specifics of a bid for GKP. But big win won’t occur until Erbil-Baghdad is resolved.
• Genel boosts stake to 80%, becomes operator of Chia Surkh PSC: Genel, in not unexpected move, continues as consolidator in Kurdistan.

Headlines:

• Source: Kurds moving towards state in March: Persistent rumors, but at this point file under “negotiations positioning.”
• Sonangol attacked in Ninewa: Most likely criminal attack, designed to extract money or concessions, not broader activity.

Calendar:

• 19 January – Parliament to reconvene, Iraqi budget on docket
• Next month – Reconciliation meeting

Please click here to access the report, or to add your email address to Dunia’s mailing list.

Following a demonstration in Erbil by 700 mine action professionals late last year, the Kurdistan Regional Government will review their pay and working status to ensure that they are fairly rewarded for their vital work.

The deminers marched to the Kurdistan Parliament in November to submit their demands. The Speaker Dr Kamal Kirkuki spoke on behalf of the parliament during discussions with the Iraqi Kurdistan Mine Action Agency (IKMAA) representatives over security and benefits concerns. The IKMAA representatives were headed by General Director Mr Siraj Barzani.

Dr Kirkuki said, “I understand the deminers’ demands and have enormous respect for their vital and extremely dangerous work to clear Kurdistan of mines and prevent deaths. That’s why I urge the KRG to listen to their requests and give them the recognition and status that they deserve.” Dr Kirkuki concluded that he would lobby executive officials to help the IKMAA in promoting those rights.

Following the demonstration, the Kurdistan Regional Government (KRG) has reaffirmed the importance of the mine clearance teams’ operations and will consider increasing their salaries and introducing retirement plans. It is expected that next year a draft law securing rights for mine clearing personnel will be prepared and submitted to parliament.

The other aims of the IKMAA are to secure other benefits for their teams and to unify the two Kurdistan mine agencies which currently operate separately, one in Erbil and Duhok governorates, the other in Suleimaniah governorate. Currently the employment system for mine action professionals in Kurdistan is based on one-year renewable service contracts; reforms to this system will guarantee employees a lasting future in the industry. If the unification is approved by parliament it would form a dependable mine clearance agency with talks of pay and contracts changes on the horizon.

As some of Kurdistan’s rural borders are among the most heavily mine contaminated places in the world, the IKMAA’s presence is essential in eliminating the danger and legacy of war. In 2011 alone, IKMAA set a clearance record of over 1 million square meters, cleared through manual electronic processing. The Iraqi Kurdistan Mine Action Agency also recently won a clearance contract with the private oil and gas sector, which was signed in September 2011 with Kalegran. This contract will generate revenue for the KRG and secures the position of the Kurdistan’s mine clearance agencies as the major mine action service provider in the Kurdistan Region.