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The latest news on Iraq Oil Production – oil companies, oil output and more – brought to you by Iraq Business News

Genel Energy Down 3% on Trading Update


Shares in Genel Energy were down 3 percent on Wednesday morning following the company’s trading and operations update in advance of the its full-year 2014 results, which are scheduled for release on 5 March 2015. The information contained herein has not been audited and may be subject to further review:

HIGHLIGHTS

  • A combination of low development and operating costs and Production Sharing Contract structure creates a robust Kurdistan Region of Iraq (“KRI”) oil business very resilient to sustained low oil prices
  • 2014 production of 69,000 boepd, an increase of 58% year-on-year with significant further growth expected in 2015
  • Capital expenditure guidance for 2015 lowered by 30% to $200-250 million, a reduction of 70% on 2014
  • Revenue guidance for 2015 revised from $500-600 million at a Brent price of $80/bbl to $350-400 million at a Brent price of $50/bbl
  • Cash balances at 31 December 2014 stood at c.$490 million, balance sheet strength underpins future growth in the KRI
  • Agreement on crude oil exports through northern Iraq reached in December 2014 between the Kurdistan Regional Government (“KRG”) and Federal Government of Iraq (“FGI”), operational implementation commenced in early January 2015
  • First payment for oil exports via the pipeline received in December, further payments expected shortly

PRODUCTION

  • Net working interest production for 2014 averaged 69,000 boepd, an increase of 58% on 2013 and at the top end of the 60-70,000 boepd guidance range
  • Gross production from Taq Taq averaged 103,000 bopd in 2014, an increase of 34% on 2013. Following the successful installation and commissioning of well site temporary production facilities in December 2014, Taq Taq set a new daily production record of 135,000 bopd and a new record for gross daily liftings of 147,000 bopd
  • Gross production from Tawke averaged 91,000 bopd in 2014, an increase of 131% on 2013
  • In 2014, 36% of Genel’s production was exported by the KRG through the KRI-Turkey pipeline system, with 12% exported by the KRG via Turkey by truck and the remainder sold into the domestic market
  • The Company’s 2015 production guidance is maintained at 90-100,000 boepd

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Record Oil Production set to Increase


By John Lee.

Iraq produced a record of around 4 million barrels per day (bpd) of crude oil in December, Oil Minister Adel Abdel Mehdi (pictured) told a press conference on Sunday.

This beat the previous record for Iraqi production of 3.56 million bpd in 1979, according to an official from the State Oil Marketing Organization (SOMO).

The Minister went on to reveal plans to export 375,000 bpd for the first three months of 2015 from Kirkuk and the Kurdistan region, increasing to 600,000 bpd from April.

(Source: Reuters)

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Southern Oil Output at 3m bpd


By John Lee.

The current average output from Iraq’s southern oilfields is reported to be about 3 million bpd, according to a report from Reuters.

Oil Minister Dr. Adel Abdul Mahdi [Adel Abdel Mehdi] told reporters that average export levels are about 2.5 million bpd.

(Source: Reuters)

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Lukoil to Increase Output at West Qurna-2


By Patrick M Schmidt.

The Dubai-based division of the Russian oil company, Lukoil announced revise production figures for the West Qurna-2 fields.

The company began production in March 2014 with an output of approximately 120,000 barrels of oil per day. Current production levels are now at 300,000 barrels of oil per day.

It is expected output will reach 400,000 barrels of oil per day by next year.

West Qurna-2 has an estimated 13 billion barrels of oil in reserve and is located approximately forty miles from the city of Basra.

(Source: Gulf News)

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GKP Shares Surge on Shaikan Update


By John Lee.

Sharess in Gulf Keystone Petroleum surged as much as 10 percent by lunchtime on Wednesday, after teh company issued an update on the its operations at Shaikan, its key producing asset:

The Company remains focused on achieving the target of 40,000 barrels of oil per day (“bopd”) of production capacity from the Shaikan production facilities (“PF-1″ and “PF-2″) in line with our Half Year Report schedule published on 28 August 2014. The Company’s staffing levels in the Kurdistan Region, including all key international contractors, returned to normal in the first half of September.

In the period since 28 August 2014, Shaikan PF-1 and PF-2 production has been achieving stable rates of approximately 23,000 gross bopd from three wells at PF-1 and two wells at PF-2. The work on the flowlines to connect additional production wells, Shaikan-7, -8 and -10 later in 2014 is on-going.

Trucking operations from PF-1 and PF-2 continue with approximately 70% of the current production trucked as export crude oil to the Turkish port of Dortyol and sold to the international market by Powertrans, an authorised transportation and marketing agent of the Kurdistan Regional Government’s Ministry of Natural Resources (“KRG” and “MNR”).

Seventeen cargoes totalling approximately 4.0 million gross barrels of Shaikan crude oil have been sold to the international market since the Shaikan crude oil export sales began from Dortyol in January 2014.

As previously announced, constructive discussions surrounding a payment cycle for past and future Shaikan export crude oil sales are progressing with the MNR, while the Company is awaiting further payments for export sales.

Approximately 30% of the current Shaikan production is being sold to domestic buyers in the Kurdistan Region. Since the publication of the Half Year Report, the domestic market has been providing steady revenue with approximately 220,000 barrels gross sold since 28 August 2014 generating US$9.4 million in gross revenues. The cash receipts associated with these sales as at 30 September were US$5.9 million.

The Company’s Q3 2014 Interim Management Statement will be published on 30 October 2014.

John Gerstenlauer (pictured), Gulf Keystone’s Chief Executive Officer commented:

Receiving steady revenues from our domestic sales is positive as we continue our constructive discussions regarding a stable payment cycle for past and future export sales.

“With all personnel now back in country, we are making good progress and look forward to reaching our target of 40,000 gross barrels of oil per day.

“We continue to manage our expenditure in a prudent manner in order to maximise production, whilst actively pursuing options regarding the Company’s 20% working interest in the Akri-Bijeel Block.”

(Sources: GKP, Yahoo!)

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The New Oil Production Targets


By Ahmed Mousa Jiyad.

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

The New Oil Production Targets, New Terms and Implications

Most petroleum professionals, including myself, had expressed their serious doubt about the suitability, attainability and sustainability of oil production plateau targets for many oilfields that were concluded pursuant to bid rounds one and two of 2009 and 2010.

The Ministry of Oil-MoO and senior energy decision makers in government begun to rethink those production targets only after the findings of both the International Energy Agency IEA (2012) and the Booz&Co., Integrated Energy Strategy INES (2013) raised similar doubts on the likelihood of realizing the contracted plateau targets in volumes and on time; and both IEA and INES called for serious reduction on these contracted targets.

Recent information from various official, industry and specialized media sources tells that agreements between MoO and related IOCs have been concluded pertaining to Rumaila and Halfaya oilfields, while those for West Qurna 1 (WQ1), West Qurna 2 (WQ2), Majnoon, and Zubair giant oilfields were finalized earlier; and related contracts have already been amended.

The full paper can be downloaded free-of-charge from our Reports service.

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: [email protected], Skype ID: Ahmed Mousa Jiyad).

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Revised Production Target for Rumaila


By John Lee.

BP has reportedly finalised its revised contract for Iraq’s giant Rumaila oilfield, cutting the final production target from 2.85 million barrels per day (bpd) to 2.1 million bpd.

According to Reuters, officials from BP and Iraq’s oil ministry signed the amendment to the existing contract in a closed-door meeting at Rumaila on Thursday.

For more on revised production Targets, please see this report from our Expert Blogger Ahmed Mousa Jiyad.

(Source: Reuters)

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KRG Calls for Increased Oil Production


The KRG’s Ministry of Natural Resources has said it attaches the highest priority to the safety and security of all oil industry workers and their operations in the Kurdistan Region.

MNR remains in constant contact with KRG security forces regarding the deterioration of security on the Region’s borders and it continues to share all relevant information with its contractors.

Until now, the enemy has not been able to target oil operations in the Region, but as a precautionary measure some of the exploration activities in areas abutting potential combat zones have been temporarily halted and staff relocated.

However, oil production in the Region remains unaffected, and is being delivered to both the domestic and export markets. Indeed, the KRG is expecting that the producing companies will ramp up production in the coming weeks as ongoing export infrastructure improvements come online as planned.

The producing companies continue to receive their share of production and revenue from all the domestic uses of the oil, and they have been advised to also work on the export sales for their share of the exported oil.

Meanwhile, MNR would like to remind the operating and the service companies working in the Region not to take any steps without close coordination with the Ministry of Natural Resources, as this may lead to unnecessary complications and in some cases could harm the operators’ own interests as well as the KRG’s overall needs.

MNR is continuing with oil exports and sales via Ceyhan and welcomes the support and investment of the oil companies in the Kurdistan Region.

(Source: KRG)

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