Custom Search

By John Lee.

Irish-based Petrel Resources Plc (LON: PET) has published its consolidated financial statements for the year ended 31st December 2024.

The company's accounts show no assets or liabilities in Iraq. It adds:

"Title to oil and gas assets in Ghana and Iraq can be complex. The Group is currently awaiting ratification of its licenses in Ghana and Iraq."

Regarding prospects in Iraq, the company said:

"An early opportunity may lie in projects to recover and monetise flared gas with contained liquids in southern Iraqi oil-fields. Petrel had made such proposals from 2004 through 2009 on the Subba & Luhais fields, on which we were the EPC (Engineering, Procurement & supervision of Construction) Operator. At that time our client (SCOP) [State Company for Oil Projects] was unable to sign such an agreement for legal reasons - even though it would have substantially reduced their development costs. However, we believe that some or all of the bureaucratic barriers may now have been overcome.

"There has been a recent site visit and early discussion with the authorities by an experienced regional services provider, which has successfully conducted such operations elsewhere.

"We had excellent relations with the local communities, and had negligible security issues when working there previously. It's too early to be sure how such contracts would be structured.

"The Merjan oil field was discovered in 1983 by Mobil, but though economic, never developed due to the sub-economic terms available. From 2004, Petrel was invited by the Ministry of Oil to study how best this discovery could be proven up and brought into production. For best results, such smaller Iraqi fields should be developed under enhanced fiscal terms, to best align the interests of capital providers, operators and the Iraqi State. An updated development proposal was accordingly prepared to reflect financial reality and evolving Ministry guidelines.

"During 2024, Petrel was asked by the Ministry of Foreign Affairs in Iraq for its proposals on how Iraqi oil & gas exports could be de-bottlenecked and boosted. There is considerable scope to improve Iraqi market access, adding value to Iraqi people."

(Source: Petrel Resources)

By John Lee.

In a meeting of the Joint Management Committee, Iraq's Oil Ministry discussed the development plan for fields and projects contracted with the French company TotalEnergies.

The Deputy Minister for Extraction Affairs affirmed the ministry's commitment to implementing strategic projects with TotalEnergies and QatarEnergy.

According to a statement from the Ministry, the four significant projects under the contract aim to support the national economy through field and oil reservoir development, gas utilization, water supply for local needs, and a groundbreaking 1,000-megawatt solar energy project, a first for Iraq.

It adds that the contracting company has received the work for project execution, including the development of the Artawi field to increase its production capacity to 210,000 barrels. Additionally, the gas treatment project in six oil fields (Ratawi [Artawi], Majnoon, West Qurna 2, Siba, Luhais [Lahais], and Tuba [Subba]) and the seawater project, which will provide substantial quantities of water for industrial and agricultural projects, were discussed. The transition to alternative energy is also part of the plan.

These projects will open doors for the Iraqi private sector to participate and create significant employment opportunities in the region. The Regional Director for the Middle East and North Africa at TotalEnergies, Julien Pouget, expressed the company's pride in the contract and appreciated the continuous support from the Oil Ministry to facilitate the projects included in the agreement. These projects, including Artawi field development, gas emissions reduction, utilization of associated gas in oil fields, seawater supply, and the 1,000-megawatt solar energy production, are expected to have a positive impact on Iraq's oil and gas industry.

(Source: Ministry of Oil)

By John Lee.

The Iraqi cabinet has approved the agreement between the Ministry of Oil and French company TotalEnergies to implement four major energy projects in the country:

1. Plants to collect and refine associated natural gas at the fields of Artawi [Ratawi], West Qurna 2, Majnoon, Tuba [Subba] and Lahais [Luhais]. This will include a Central Gas Complex at Artawi;
2. Development of the Artawi field;
3. The integrated seawater project [Common Seawater Supply Project (CSSP)?], which the ministry has been trying to implement for more than ten years; and,
4. A 1,000MW solar energy plant.

The project was originally agreed in March.

(Source: Govt of Iraq)

By John Lee.

Iraq's Ministry of Oil has signed an agreement of principles with the French company Total for four major energy projects in the country:

1. Plants to collect and refine associated natural gas at the fields of Artawi [Ratawi], West Qurna 2, Majnoon, Tuba [Subba] and Lahais [Luhais]. This will include a Central Gas Complex at Artawi;
2. Development of the Artawi field;
3. The integrated seawater project [Common Seawater Supply Project (CSSP)?], which the ministry has been trying to implement for more than ten years; and,
4. A 1,000MW solar energy plant.

Full statement here (Arabic)

(Source: Ministry of Oil)

By John Lee.

In its financial results for the six months ended 30^th June 2020, Petrel Resources made the following statement on its interests in Iraq:

"Petrel is active once more in Iraq after a hiatus since 2010 due to political and financial instability. We negotiated a large exploration block, Block 6, in the Western Desert in 2005. Nothing has happened there in the recent past. In discussions in early 2020, before the Covid-19 pandemic, with Ministry officials we renewed our Block 6 interest and re-presented the technical slides done by the Company on the Merjan-Kefl-West Kifl oil discoveries which remain undeveloped. We did extensive work under a Technical Co-operation Agreement on possible ways to develop these discoveries.

"With appropriate terms and pipeline access, the Merjan oil-field seems poised for early development: it was discovered, as an oil reservoir, by Mobil in 1982, but work did not proceed, mainly for political reasons.  Petrel's work on Merjan did not suggest that the area was gas-prone. The discovery well - Me-1- was located using 2D seismic on a Jurassic reef. No reef or oil was found in the Jurassic, but the well discovered oil in the Upper Cretaceous Hartha Formation.  Recent analysis of 3D data focusses on the Jurassic seismic feature, and does not discuss the nature of any hydrocarbons in the well or the area. The Hartha reservoir in the well tested oil and water, without a significant flow of gas.

"Given the scope to reduce emissions through gas development, we should also bear Iraq's gas potential in mind:  a staggering 16 billion cm (0.6 tcf) of gas are flared yearly (including valuable liquids), which is about half Iraq's gas output.  We proposed gas and condensate recovery on Subba & Luhais, at various times, from 2004 through 2010, but the necessary legal framework was not then in place.  With appropriate terms and infrastructure, gas economics are also attractive.

"As lowest cost oil producer Iraq is well poised to benefit from the development of the oil market. Their output can easily double in size."

(Source: Petrel Resources)

By John Lee.

In its preliminary results for 2018, Petrel Resources gave the following update on its activities in Iraq:

We had high hopes of commercial success in Iraq. It has the best oil geology on the planet with drilling success over 90% and a $2 to 4 a barrel production cost. But the political risk offsets all of this.

Petrel first entered Iraq in 1997 and had initial success in obtaining a large exploration block in the Western Desert between Baghdad and Amman Jordan. We were seeking development rights to any one of the many proven but undeveloped oil fields but we needed to establish our credentials. We undertook exploration work but were frustrated by sanctions which stopped us from drilling.

We continued involvement with the Iraqi Oil Ministry and undertook extensive technical work, with Itochu of Japan on the Merjan oil field.

Post 2003 we were awarded a development contract on the Subba and Luhais oil fields. Bureaucratic interference and payment problems forced Petrel to sell out in 2010.

We maintained our interest and appointed an Iraqi Arman Kayablian to work in Iraq. We purchased a 20% stake in Amira Hydrocarbon which had joint operations with Oryx Petroleum, in the Wasit province.  The joint venture failed to obtain a licence. In 2018 the agreement was dissolved and some 20 million Petrel shares returned to the company.

We have recently appointed Riadh Mahmoud Hameed to the Petrel board. Riadh worked as project co-ordinator for six years for Petrel in Iraq.

Activities are normalising in Iraq. There are many oil projects in Iraq which need to be developed. Petrel will be making a case to be part of the development.

Interest is reviving in Iraq. We now have the people to seek out operations on the ground.  

(Source: Petrel Resources)

By John Lee.

Iraq plans to supply an additional 5 million barrels of crude oil to its partners in June, according to industry sources cited by Reuters.

The country joins other Middle East producers in attempting to increase market share ahead of an OPEC meeting in Vienna later this week.

Iraq had already been targeting record crude export volumes from southern terminals next month of 3.47 million barrels per day.

The State Oil Marketing Organization (SOMO) has allocated 5 million more barrels of Basra Light grade to partners including PetroChina, Eni and Lukoil, with which Iraq has technical service contracts (TSCs).

An industry source said the additional oil was given "because of the pressure from the TSC contractors".

The additional supplies come from an expansion of the Luhais and Artawi fields in southern Iraq.

(Source: Reuters)

By John Lee.

Iraq has reportedly approached PetroChina and ExxonMobil about investing in a multi-billion dollar project to help boost output from a number of smaller southern fields.

The Deputy Chairman of the South Oil Company (SOC), Basim Abdul Kareem, told Reuters that the "Integrated South Project" consists of building oil pipelines, storage facilities and a seawater supply project to inject water from the Gulf to maintain pressure and enhance oil recovery.

The project targets the Luhais, Nassiriya, Tuba, Nahr Bin Umar and Artawi oilfields, which are currently producing about 240,000 bpd currently and SOC's initial plan calls for raising that to about 350,000 bpd in 2016.

Petrochina has shown more interest than ExxonMobil in the project, according to another SOC official who declined to be identified.

(Sources: Reuters)

By John Lee.

Petrel Resources, the AIM-listed, Irish hydrocarbon exploration company with activities in Iraq, Ghana and Offshore Ireland, today announced its interim results for the six months ending 30 June 2012:

Operational Highlights:

• New management team appointed in Iraq. They have clarified Petrel's relationship with the authorities and are pursuing existing and new opportunities.
• The Ghanaian authorities have been provided with evidence of Petrel's financial and technical ability to conduct the required work programme on Tano 2A Block.
• Exploration in Ghana, elsewhere in Africa and in South America, has confirmed the value of the Tano Basin acreage.
• New exploration data support Petrel's view that the extensive oil shows and seeps on the Tano shoreline are sourced from the prolific Cenomanian-Turonian source sequences of the deeper Tano Basin.
• Petrel is progressing it's Irish Offshore Option Blocks in the northern and eastern sections of Porcupine Basin. Several new targets have been identified.

Chairman, John Teeling said:

"Petrel is well financed for all current needs with over US$4m cash. The board is committed to our activities in Iraq and Ghana offers significant upside to the company. The Irish offshore, where Petrel began in the early 1980's has once again become an attractive target. We have a strong expert team, we have good ground and we hope to interest multinational parties to explore with us. The mix of projects, all high risk, offers significant potential."

Iraq

Petrel has had a presence in Iraq since 1999. In 2002 an agreement was reached with the Oil Ministry in Baghdad on an exploration contract over 10,000 sq km in the Western Desert. In 2005 Petrel was awarded a contract to develop the surface facilities for a large oilfield development in the Subba and Luhais area. We were asked to take a local Kurdish partner, Makman, in a joint venture.

After protracted discussions Petrel exited the contract leaving Makman the sole operator.

Between 2009 and 2011 Petrel applied to be considered for new oil field licences being offered. We expected to qualify and did not. Following a review of our position in Iraq we appointed a new management team with the brief to clarify our standing in the country, in order to highlight our interest in the exploration ground and to seek out new opportunities.

Though working only for a short time the team has made significant progress. The first objective was to clarify the position of Petrel with the national authorities in relation to existing and historic projects in which Petrel has or had an interest. This is done.

The second objective is to work with national and regional authorities in Iraq to identify projects in which Petrel can be involved. This work is ongoing.

(Source: Petrel Resources)

John Teeling, Chairman of Petrel Resources, made the following comments on the company's Iraqi operations in its preliminary results for the Year Ended 31 December 2011:

"First formed in the 1980's to explore offshore Ireland, Petrel entered into Iraq in 1999. We worked diligently with the Iraqi Oil Ministry and in 2002 agreed an exploration lease on a 10,000 sq km area in the Western Desert.

"This was approved by the Oil Ministry but not the supreme authority. Post 2004, Petrel was successful in obtaining a large oil field construction contract, Subba and Luhais, and Technical Cooperation Agreements on two undeveloped oil fields, Merjan and Dhufriyah.

"A local partner was imposed on Petrel at the signing of the Subba and Luhais agreement. Difficulties arose in the execution of the contract and after extensive negotiations Petrel withdrew from the contract with $ 7m in compensation and a 10% net profits interest. The project is virtually complete but we expect no further payment.

"Since 2008 we have applied to be pre-qualified for four licencing rounds. To date we have been unsuccessful. When compared to the super-major and giant national oil companies who applied in the early rounds, our small size militated against us - though we had strong in country experience.

"It must be said that even had we pre-qualified there is no certainty that we would have completed a deal. Iraqi terms are very difficult and it is not clear how economic they are for investors. But we remain committed to Iraq. It is the best and cheapest place in the world to find oil and gas.

"The current political, economic and legal uncertainties will be ironed out but it could take time. We have recognised that our existing structure has been unsuccessful so we are in the process of establishing a new Baghdad based specialist oil team who will further our Block 6 interests as well as seeking out new opportunities."