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By John Lee.

In its preliminary results for the year ended 31st December 2020, Petrel Resources made the following statement on its interests in Iraq:

"Meanwhile Petrel continues to push its interest in Iraq and Ghana. For the foreseeable future oil will play a major part in world economic development.

"Iraq has some of the best oil deposits in the world. In a stable era Iraqi oil production would be 2 or 3 times the current under 4 million barrels a day.

"For more than 20 years Petrel has been in Iraq. Activities have languished in year past but the addition of an Iraqi director, Riadh Mahomud Hameed and the contact of French investors led to a re-opening of contacts.

"It has been, and remains a difficult and dangerous place to explore. Led by Riadh we are putting exploration proposals to the authorities. We are particularly keen to revisit the Merjan field where we earlier produced development proposals ...

"Our focus in the immediate future will be Iraq"

(Source: Petrel Resources)

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.

Petrel Resources has said that its operations in Iraq, which had been dormant for some time, are "once again showing life".

In its Preliminary Results for the Year Ended 31/12/19, the company said:

"Our Iraqi, director, Riadh, is actively promoting our ongoing interest in participating in the development of the many oil opportunities in Iraq. It remains the best place on earth to find and produce oil.

"The political situation is finally stabilising. We have reconnected with people who assisted us between 1999 - 2010 when we were active in the country. Though only a small company, we have a track record in Iraq, we worked there for more than a decade and have a wealth of data on the oil geology of the country.

"We are hopeful that we will get an opportunity to play a part in developing the oil industry."

(Source: Petrel Resources)

By John Lee.

Petrel Resources Plc (Lon: PET) has announce that the company has arranged a placing with ETX Capital to raise £250,000 (before expenses) via the issue of 7,692,308 new ordinary shares (the "Placing Shares") at a placing price of 3.25p per Placing Share.

Subject to the appointment of responsible officials by the new Iraqi Government, and the lifting of Covid-19 restrictions, Petrel expects to enter into re-qualification discussions with the appropriate decision-makers at the Ministry of Oil.  Discussions may cover Petrel's past studies on the Merjan-Kifl-West Kifl area, and the Mesozoic and Paleozoic potential of the Western Desert.

Pending, such discussions, this investment will strengthen the company's Balance Sheet.

David Horgan, Director, commented:

"Petrel is fortunate to have maintained strong relationships with Ministry of Oil officials, even during the darkest hours of sanctions, invasion, conflict, and Covid-19.  Our Iraqi Director, Riadh, is a son of the renowned "driller", Mahmoud Ahmed.  In Iraq we found World-class geology.

"Prevailing circumstances obliged Petrel temporarily to dis-engage from on-the-ground operations in 2010.  We saw too many challenges - both governance, political and financial - to justify risking Shareholders' funds given the then-limited upside available."

"Recent events are transforming this situation. A three-way rivalry among Saudi Arabia, Russia and American producers - aggravated by an unprecedented demand-hit caused by Covid-19 - crashed the oil price.  This cripples high cost operations offshore, and unconventional reservoirs.  As a low-cost producer, Iraq is now well positioned to exploit this historic opportunity.  I believe that Petrel has the experience, contacts and board commitment to help drive forward the next phase of Iraqi oil development."

(Source: Petrel Resources)

By John Lee.

Petrel Resources has announced that it is interested in the 'fresh opportunities' in Iraq thrown up by the turbulent oil price and political events of recent months.

In a statement, the company said that its Iraqi Director, Riadh Ani, is coordinating discussions with the Ministry of Oil in Baghdad to take advantage of the situation.

(Source: Petrel)

By John Lee.

Irish-based Petrel Resources has said that one of its main priorities has been re-building its presence in Iraq.

In its financial results for the six months ended 30^th June 2019, the company said:

"While challenges remain, the Iraqi government encourages international investors with Iraqi operating experience.  The security situation has dramatically improved since 2018.  Iraq remains exempt from OPEC quotas, and Iraqi oil output has reached 4.7 million barrels of oil daily.

"The next Iraqi bidding round (for exploration of blocks with gas potential) is expected during 2020.  The model contract is expected to be an updated version of the Iraqi hybrid exploration and development contract, incorporating aspects of service contract and production sharing.  These terms are more attractive for international explorers than in prior bid rounds.

"The improving security situation in western Iraq has again made possible field-work on prime western desert exploration blocks, including Block 6, on which we worked from 2002. Similarly, the Merjan oil discovery, by Mobil in 1982, which has recently been packaged with Kifl & west Kifl oilfields, has arisen as a possible development project. 

"The Merjan oilfield and surroundings, on which Petrel operated a Technical Cooperation Agreement in joint venture with Japanese giant Itochu from 2004 through 2007, has recently been covered by 1,000 km sq a 3d seismic survey conducted by the Iraqi Oil Exploration Company.  This enhanced data should further minismise the risks & costs of development."

(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.

Petrel Resources has announced the appointment of Riadh Hameed as Non-Executive Director with immediate effect.

Riadh Mahmoud Hameed (aged 38) is a quality control engineer working for an aerospace component company based in the USA.   Prior experience has included over a decade of working in the oil and gas sector, to include six years working for Petrel as a co-ordinator for its projects in Iraq.

David Horgan, Managing Director writes:

"I am delighted to welcome Riadh to the Board of Petrel Resources, and look forward to working with him again, and to renew our connections on the ground in Iraq."

Last year, having taken an EUR 4.1-million impairment on its investments in Iraq, the company announced that it was re-establishing operations in Baghdad.

(Source: Petrel Resources)

Irish-based Petrel Resources has said it is "re-establishing its Baghdad operations".

In its interim statement for the six months ended 30 June 2018, the company said:

"As we approach the end of 2018, Iraq is fitfully emerging from conflict, and again open for responsible business.  Baghdad has re-established its authority, by defeating Da'ech insurgents and recovering Kirkuk. 

"Pro-business parties won the 2018 elections.  While it proved difficult to form a National Government in 2018, which contributed to turbulent protests in southern Iraq during 2018, prospects are now more encouraging than at any time since 2010.

"Iraq has endured an almost continuous period of conflicts and/or sanctions since 1980, from which it is only now emerging.  Much trauma has been inflicted, as shown by the difficulties forming a government in 2018 and the protests in southern Iraq - a region generally supportive of Baghdad governments since 2005.

"Yet, despite 2018 difficulties, we believe Iraq is finally turning a corner: pro-business parties open to international investment polled well in the May 2018 general election.  But no one party holds a majority and, as of September 2018, negotiations on new government formation were ongoing.

"So far, the impact of this unrest on oil production from the southern fields has been limited, with August 2018 output stable at 4.65 million barrels daily (mmbod).  Internal demand of 0.8 mmbod leaves nearly 3.8 mmbod available for export - which has remained consistent despite infrastructural and decision-making challenges - though well below the 2008 target of 6.5 mmbod and the 2012 target of 8.5 mmbod.  Iraqi output is actually higher than immediately before the November 2016 OPEC + Russia cuts, and also higher than its current official OPEC quota of 4.444 mmbod.

"The Western Desert, where Petrel has an interest in exploration ground, is still impossible for international companies to effectively operate."

(Source: Petrel Resources)

By John Lee.

Irish-based Petrel Resources has taken a €4.1 million impairment of its investment in Iraq:

"In August 2013, Petrel did a deal with Amira in Iraq whereby, for US$500,000 in cash plus 18,947,368 initial consideration shares (which were to be locked-in until spudding of the first oil well by our partners), Petrel acquired a 5% full free carry in Amira's activities in the Wasit province in Iraq which was then, and still is, a relatively stable Shia dominated province. 

"The expectation was that provinces in Iraq would offer licences in their own right rather than solely through the central government in Baghdad.  This did not happen.  In fact, nothing happened.  As mentioned above, we have therefore impaired our investment."

However, the company said it remains interested in oil opportunities in Iraq:

"Iraq remains one of the very best oil provinces in the world.  The oil exploration potential is outstanding.  The improving political situation in Iraq has resulted in Petrel re-awakening an interest.  We have been there since 1999 and like the country. 

"We are discussing with Amira, our partner, how best to declare an interest in certain fields.  We are also re-establishing contacts in the administration.  It is very early days, but it does look as if Iraq is slowly re-opening for business, and we want to be there."

(Source: Petrel Resources)