The tiny Irish stock on the brink of landing 'the first' post-sanction oil deal in Iraq. Ref 'Fleet Street Letter' 12-04-04..

Just found this in my Reuters e-mail, the way PET reacts to any news this could knock it a bit, especially if the contracts need government approval.


Baghdad governor assassinated
Tue Jan 4, 2005 08:38 AM GMT
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By Matt Spetalnick
BAGHDAD (Reuters) - Gunmen have killed Baghdad's governor in Iraq's highest-profile assassination in eight months and a suicide bomber has killed 10 people near the Green Zone in an escalating campaign to wreck a January 30 election.

The targeting of Governor Ali al-Haidri showed insurgents' power to strike at the heart of Iraq's governing class, raising fresh doubts whether Iraqi security forces can protect politicians and voters as the national ballot draws near.

The assassination on Tuesday took place just hours after a suicide bomber rammed a fuel truck into a checkpoint near Baghdad's Green Zone, a sprawling complex housing the Iraqi government and the U.S. and British embassies. It created a giant fireball that rocked the capital, police and hospital sources said.

The bombing, which also wounded 58 people, brought fresh scenes of bloodshed and destruction to Baghdad a day after 17 security men were killed in a string of ambushes and explosions across the country.

The attacks were the latest in a drive by Sunni insurgents trying to force out U.S.-led forces, cripple the American-backed interim government and scare voters away from the polls. Iraqi leaders say guerrillas also want to provoke sectarian civil war.

Details of Haidri's death remained sketchy. He was the most senior Iraqi official to be assassinated in Baghdad since the head of the Governing Council was killed by a suicide bomb in May last year.

Haidri, the head of Baghdad province, had survived a previous assassination attempt in September.

Insurgents have repeatedly targeted Iraqi officials as well as the country's fledgling security forces as part of a fierce effort to destabilise the government.

Tuesday's powerful explosion hit a roadblock manned by police and National Guards on the outskirts of the Green Zone, police and witnesses said.

SECURITY FORCES VULNERABLE

The choice of targets again showed the vulnerability of Iraq's security forces.

Suicide bombers have struck the entrances to the complex, the site of palaces that once belonged to former dictator Saddam Hussein, several times since the U.S.-led invasion in 2003.

The latest attacks, concentrated in Baghdad and the restive Sunni heartland of northern Iraq, have come in rapid succession.

The Foreign Office in London said overnight that three British nationals were killed in an explosion in Baghdad on Monday, but gave no further details.

In west Baghdad on Monday, an explosives-laden car tried to ram through a checkpoint on a road leading to interim Prime Minister Iyad Allawi's party offices but hit a police pick-up truck and blew up, killing two officers and a civilian.

Police commanders said the bomber had been driving a taxi, a method used before by insurgents to avoid raising suspicion.

The Iraqi militant group Army of Ansar al-Sunna, which last week mounted the deadliest suicide attack on Americans since the start of the war with an attack on a U.S. base in Mosul, claimed responsibility for the bombing.

"One of the lions of Islam launched a heroic martyrdom operation on a huge congregation of agent policemen protecting the party headquarters of the apostate Iyad Allawi," the group said in a statement posted on its website.

Osama bin Laden and Islamist groups have pledged to wreck the elections as part of a holy war.

Bloodshed has been heaviest in areas dominated by Saddam's once-privileged Sunni minority which now faces the prospect of elections cementing the newfound political power of the long- oppressed Shi'ite majority.

U.S. and Iraqi officials ushered in the New Year warning they expected a spike in pre-election assaults by insurgents but pledging to do everything possible to safeguard what they say will be the country's first free elections since the 1950s.

Also on Tuesday, a U.S. Marine was killed in action in al- Anbar province west of Baghdad, the U.S. military said.

Anbar province includes the restive cities of Falluja, where U.S. forces launched a major assault in November to drive out insurgents, and Ramadi.

Since the invasion to oust Saddam in March last year, at least 1,049 U.S. military and Pentagon personnel have been killed in action in Iraq. Including non-combat deaths, the toll is at least 1,334.

Reuters 2005. All Rights Reserved.

Must be happy with that +7.

I`ve just been reading the annual report again. I don`t know if this has been posted before(apologies if it has).

Most of us are fairly confident that PET will get Block 6 rubber-stamped, me included, if this happens then the sp could go into orbit. PET have a chap called Mahmoud Ahmed as their Irqai representative, who is ( according to PET) is highly regarded throughout the industry. He formaly ran the North Oil Company of the Iraqistate-owned petroleum industry and is one of the most SUCCESSFUL DRILLERS WORLDWIDE, with some of the world`s premier fields among his discoveries.

Also it will do PET no harm, IMO, to have someone like him onboard when it come to negoiating these contracts on offer now.

Just a thought, but when i got a reply from Ivanhoe saying they are only after service contracts on these oilfields, could it be they are going in as a sub-contractor, like Haliburton and GE are hoping for with PET ?

regards,
Dexter

dexter01,

Do you know when the result of the block-6 bid will be announced? A recent snippet I read said PET are awaiting 2 further bid results some time soon - with a further 18 sites as possible bid targets?

Personally, I have been sceptical about PET, but I'm interested to find out what all the hype is about. Are there any concrete dates for bid results announced?

rgds,
skids

skids, the general concensus of opinion from what i have read is that Block 6 won`t be ratified until after the elections on 30th Jan.

It might be worth keeping an eye on Norwegian companies in Iraq, because at the end of the day we don`t know who is competing against PET for these contracts,i got the peice below from Iraq procurement.The article is from the middle of 2004, but could still be relevant IMO
Dexter

The tiny Norwegian oil company DNO ASA on Tuesday announced plans to extend its operations into the potentially volatile Kurdish-controlled areas of northern Iraq. In a statement, Oslo-based DNO said it had signed an agreement with the Kurdistan Regional Government to search for petroleum and develop possible finds in northern Iraq.

"DNO is very pleased with this new and encouraging opportunity and is looking forward to develop a long-term cooperation with Kurdistan Regional Government to exploit hydrocarbon resources in Northern Iraq," the company said.


The regional government has controlled Kurdish areas natural resources since 1991. DNO noted that political, regional and constitutional developments in Iraq could, however affect the agreement and operations. The United States on Monday transferred political power to a transitional government, with elections and constitution reforms expected in the future.

DNO was founded in 1971 as the first Norwegian oil company listed on the Oslo Stock Exchange. It specialized in extending the life of mature oil fields through enhanced recovery and cost-cutting measures. However, it has begun to expand into other areas and currently produces approximately 14,000 barrels of oil a day.

Pipelines passing oil to and from the refineries

Since 1998, the company has been active in Yemen, where it operates the Tasour field, which is already producing, and made a new find of oil in the Nabrajah field. It also has interests in Norwegian and British offshore sectors in Mozambique and Equatorial Guinea.

Source: Forbes

Dexter01,

So its a waiting game. Think I will hold off until concrete news is here.
Thanks for the post.

cheers,
skids

so what is the possiblity of PET getting any of the 3 contracts in IRAQ...

rkausar,

I think thats the million dollar question! Its probably fair to presume its only 2 contracts at present, as one has gone to a Turkish company from what has been banded about so far. But it does look as though there are at least 18 other sites that PET can bid for on top of the 2 we're waiting for.

So if PET only gets one I presume its very good news (seeing as their so small). These type of companies are not really my area - and I usually steer clear, but...

Anyone else have a view on this?

skids

skids, there are other things to consider with PET. They have interests in Jordan going ahead and in Sudan, so 'if' (crossed everything) something developes in post war Iraq and the share RETURNS post reuters report position it will get great support from other locations/contracts/tenders. So many tenders and many prizes going on with PET.

watcher

Good Morning Pet Lovers

03/01/05

http://www.csmonitor.com/2005/0103/p17s01-cogn.html


But the plan carries risks for Iraqi moderates, the business interests of the United States and Britain, and the international oil companies themselves.

But foreign oil companies face big physical, economic, and political risks. A "monster if" - as in if it's safe, says Ronald Gold, an economist with the Petroleum Industry Research Foundation in New York.

The insurgency has already taken its toll: some 182 attacks on Iraq's energy infrastructure since June 2003, according to the Institute for the Analysis of Global Security, a nonprofit energy-security group. That sabotage has slowed output by some 400,000 to 600,000 b.p.d., Bayati estimates. It has also made oil companies wary of moving in. "Security problems are the main obstacle" to attracting foreign investment, he adds.

"A free Iraqi people will not give their oil away," warns A. F. Alhajji, an economist at Ohio Northern University in Ada. "Negotiations [with foreign oil companies] are going to be very tough." He predicts that the nation's oil reserves will have to remain under government ownership, even if foreign oil companies are allowed to be partners in their exploitation.

The previous Iraqi constitution prohibited foreign ownership of the nation's oil. Further, Shiite Muslim clerics issued religious decrees decades ago that still stand, supporting the nationalization of the oil industry."

............................................................

The above extract supports my often repeated thesis that the Iraqis will do their utmost to deny the US/British control of their oil.

We see this already happening with the awarding of a contract to a small Turkish company Everasia against the failure of Shell to get a contract as confirmed in :

http://www.occkw.com/Iraq/view_news_main.asp?pid=850

02 Jan 2005

News: Shell loses out in contest to develop Iraq's Kirkuk oil field

Shell has failed in a controversial attempt to win the first post-war contracts to develop oilfields in Iraq. Hazim Sultan, Iraq's oilfield development director, said five companies had been shortlisted to evaluate the potential of the huge Kirkuk field in the north.

Also I have said numerous times before, the insurgents who now numbers about 200,000 members according to Iraq security chief, will target the big US/British oil companies but not small companies from neutral countries like Pet. For even the insurgents know that they themselves need the revenue from oil. Further by targeting the big US/British oil companies and supporting other small companies is in itself a war strategy against the US/Britain.

Morning all,
Just to follow up on my post yesterday, an e-mail i sent and one received from PET, and my post from yesterday;

Subject: RE: Contact Petrel Resources : Mr Ahmed
Date: Tue, 4 Jan 2005 17:38:28 -0000
From: "David Horgan" Add to Address Book
To: ******.*****@btopenworld.com


Yes. Mahmoud is enthusiastically involved and a valuable asset.
DH

-----Original Message-----
From: Jacqui Gallagher
Sent: 04 January 2005 17:29
To: David Horgan
Subject: FW: Contact Petrel Resources : Mr Ahmed



-----Original Message-----
From: petrel@hub04.mail.esat.net [mailto:petrel@hub04.mail.esat.net] On
Behalf Of ******.*****@btopenworld.com
Sent: 04 January 2005 16:29
To: petrel@iol.ie; ******.*****@btopenworld.com
Subject: Contact Petrel Resources : Mr Ahmed

Name - roger
Message :
Dear sir/madam,
I have been reading your last annual report and on page
11 where you have listed your partners and suppliers you mention
Mahmoud
Ahmed and his track record. Could you please tell me if he is still
your
representative in Iraq, or involved in any way with Petrel?.
I fully understand the situation with the IOM and the need
for descetion, but if you could answer my question i don`t think it
would be breaking any confidence.
Many thanks, and keep up the good work.
Yours,
Roger

I`ve just been reading the annual report again. I don`t know if this has been posted before(apologies if it has).

Most of us are fairly confident that PET will get Block 6 rubber-stamped, me included, if this happens then the sp could go into orbit. PET have a chap called Mahmoud Ahmed as their Irqai representative, who is ( according to PET) is highly regarded throughout the industry. He formaly ran the North Oil Company of the Iraqistate-owned petroleum industry and is one of the most SUCCESSFUL DRILLERS WORLDWIDE, with some of the world`s premier fields among his discoveries.

Also it will do PET no harm, IMO, to have someone like him onboard when it come to negoiating these contracts on offer now.

Just a thought, but when i got a reply from Ivanhoe saying they are only after service contracts on these oilfields, could it be they are going in as a sub-contractor, like Haliburton and GE are hoping for with PET ?

regards,
Dexter

dexter

Whither the sp of PET? Recent posts seem to have bullish and bearish content. Bullish: PET are still in play for two of the three contracts; Block 6 should come into play with new government; elections likely to go ahead on time because of US pressure; PET have key player in Ahmed to argue their corner. Bearish: Iraq determined to own drilling and production rights; initial contract are cost plus risk factor; danger of contracts being bought as I suspect has happened with Turks in Kirkuk; even Block 6 likely to be an exploration licence with % perhaps of production. My conclusion is that PET will make good progress but we should not overstate value of success in winning contracts. How much is built into price? SEY may be a better target model, rather than Cairn. Do you agree?

Eric

Very strong buying over last couple of hours. Do some people know something?

Eric

eric, first things first hope the missess is OK. I have looked in on PET trades over the last couple of hours and there is a lot of buys and the price has recovered today back to start point. I hope this is a sign that something is in the wind. No doubt things are gonna get very hairy in Iraq over the next couple of weeks, so that might effect news coming out of the ministry.

watcher

Eric,
Good to have you back, how is Mary?, did you have a good New Year?.

I have said all along that if PET were to get one cash contract it will give them a foothold in Iraq. Even if they get block 6 on exploration licence, it would probably be % of production otherwise i don`t think the risk involved would make it worthwhile. Having Ahmed on their side is definitely going to be only for the good, even if only for his contacts in the OM.

With hindsight i do feel the sp, when at 1+ was inflated and driven by hype, even by DH and JT giving an almost running commentary on the "urgent talks" etc., it would have been better just saying "we are still in negotiations", if anything at all. Most companies only put out an RNS when they have won a contract etc., but as i say hindsight is a wonderful thing!.

I think now that the sp would be more like what was put on PET`s powerpoint presentation( can`t remember exactly how much!), and not the figures that had been put about ie. 10 to 25 or so, however much we would like that!.If nothing else the fall in Dec. has bought us all down to earth a bit!.Having said that, i still think PET is a good buy at these prices, there would be nothing wrong with 500% or so from now!.

regards,
Dexter

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

Dexter

Kivver's gone to sleep but that may be no bad thing. Thanks for enquiry re Mary. I think she took a battering with the pancreatitis and we have been a pair of zombies arriving back with colds and jetlag. But Whistler was great with super snow from Christmas Eve. Mary even did some skiing but I think she finds it easier than walking just gliding down the piste with the greatest of ease!

Must admit to selling up my loss makers: EPO and PET; PET at 50p today. My reading of Kahn over the holiday said you should be able to see a 3:1 risk ratio between up and downsides. Have decided to run ASC hard as I believe Christmas trading has been phenomenal based on Hitwise figures - trading statement due on 21st; worth a few spankers. Have promised johngtudor that I will observe the charts in buying/selling. No doubt I'll be back in but you can't be everywhere at once. Good luck to all, whether or not I share the dosh!

Eric

Good Morning Pet Lovers!

Hamrin and S&L contracts will definitely be awarded before the elections my take by 15 January. The Iraqi government have already awarded the first contract to Everasia. The Iraqi government would want to send the message to the Iraqi population that they are creating business, jobs and starting the rebuilding of the country, to encourage them to vote. They would also want to send the message that the insurgents are not winning the war, otherwise the insurgency will gain more credibility, momentum, increase in size and impact.

Note with the 3 tenders so far, all involve tendering companies from mainly neutral countries, notwithstanding the fact that DSP is a British co, it is part of a consortium of 2 other companies, a Turkish and an Iraqi one, led by the Turkish one, Everasia. The inclusion of DSP may have been a deliberate a test case to see how the Iraqis would react to a British company winning a contract or/and whether companies from hostile countries are prepared to take the risk and work in Iraq and therefore set an example for others to follow.

On the whole the message the government is actually sending now is that small cos from neutral countries are being offered contract not big US/British companies. Note the failure of Shell losing on one of the biggest oil field contract in Kirkuk only this week. Now think about it: a month before the election the government offers a contract to a small Turkish company Everasia whilst at the same time refuses a contract to Shell, a big British(/Dutch)multinational. Can anyone really believe a company like Shell wasnt capable of tendering properly to end up losing one of the most lucrative oil contracts?

This certainly smacks of politics: the government want to reassure the people that big US/British multinational will not be in control of Iraqi oil. What better way of doing this than by offering contract to small companies from neutral countries, especially before the election. That is why the 2 contracts left will definitely be awarded before the election.

Even after the election, no matter who governs Iraq (a US puppet definitely the case) the small cos from neutral countries will always be offered contracts if only as a cover for other big US/British multinational to get theirs, all to make it look like every one is getting oil contracts not just big US/British multinational.

Especially so after the election, because that is when the rebellion will either increase 10 folds or die down, depending on the conduct of the newly elected government and its perceived relationship with the US. I have no doubt the US is aware of this and will therefore try to remain in the background and not push it by having contracts mainly going to US/British companies.

Remember the US is really bogged down in Iraq and has no control over the security situation now - read the article quoting Iraq security chief. They wouldnt risk more by being seen to have control over Iraq oil after the election. Think about it: it is the US that is in control of Iraq not Allawi and his government. For these 3 contracts that are going to small non US cos, doesnt the Iraqi government have the tacit agreement of the US? Further why no oil contract has gone to US companies so far? Because the US is aware of the political and the next security risks that a perceived control of Iraq oil will engender. Therefore even after the election and with their puppet in place the US just cannot afford to ride rough shot over Iraq oil even if that was the reason for going into Iraq in the first place. They just didnt expect such a resistance and now they know this will increase dramatically if they dont remain in the background after the elections.

Ironically, it is the chaos in Iraq that is the protector of the small cos like Pet; and contrary to some posters views, chaos will ensure that the likes of Pet get their slice of the cake. For the militants will protect the likes of pet and concentrate their attack on US/British multinationals.

One has to add, that unlike the pipelines which runs into 1000s kilometres, oil wells are well protected with 25,000 specially trained armed force set up by the ministry of oil. Another irony is that many of the members of this force would most likely be working for the insurgency. Remember last week suicide bomber, a member of the Iraqi forces working in A US military base, who blew himself up and killed about 25 US soldiers in their refectory.

This, I think, is not a threat to the likes of Pet but to the big multinationals. For again the insurgents would not want to attack all the companies and have Iraq on its knees and risk losing support of the population, which has only oil to survive. The resistance is not made up of few dozens mad Islamic fundamentalists as Bush and Blair want us to believe but a mainly Iraqi one who perceives the US, their tormentor for a long time, has engineered this war for oil. I have said this many times before and now the Iraqi security chief and western media confirm that the resistance is an Iraqi one. I will post the article quoting Iraq security chief following this one.

I may be accused of being anti-western by those who are unable to separate emotion from rational & objective assessment of the political realities on the ground.

Note the Iraqi security chief calling the insurgency resistance. He doesn't mention the word terrorists at all.

Note too his last quote at the end the article, which to me maens the US will be unable to fully control Iraq oil and therefore the likes of Pet have more chance to get work in Iraq.

AFX 03/01/05

Iraq battling more than 200,000 insurgents: intelligence chief

BAGHDAD, (AFX) - Iraq's insurgency counts more than 200,000 active fighters and sympathisers, the country's national intelligence chief told Agence-France Presse, in the bleakest assessment to date of the armed revolt waged by Sunni Muslims.

'I think the resistance is bigger than the US military in Iraq. I think the resistance is more than 200,000 people,' Iraqi intelligence service director General Mohamed Abdullah Shahwani said in an interview ahead of the January 30 elections.

Shahwani said the number includes at least 40,000 hardcore fighters but rises to more than 200,000 members counting part-time fighters and volunteers who provide rebels everything from intelligence and logistics to shelter.

A senior US military officer declined to endorse or dismiss the spy chief's numbers.

'As for the size of the insurgency, we don't have good resolution on the size,' the officer said on condition of anonymity.

Past US military assessments on the insurgency's size have been revised upwards from 5,000 to 20,000 full and part-time members, in the last half year, most recently in October.

Insurgents have gained strength through Iraq's tight-knit tribal bonds and links to the old 400,000-strong Iraqi army, dissolved by the US occupation in May 2003 two months after the US-led invasion, he said. Asked if the insurgents were winning, Shahwani answered: 'I would say they aren't losing.'