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

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.'

Just found a headline on oiland gasinternational website, but i ca`t access it as i`m not a subscriber.

1/5/2005 Sudan grants E&P block to PetroSA.

Could this mean it`s imminent for PET getting one granted?

Dexter

By Peter Fabricius, The Business Report

JOHANNESBURG, Jan 5, 2005 -- PetroSA, South Africa's national oil company, is to send technicians to the Sudan to establish whether there are commercially exploitable quantities of oil in an exploration block that it has been allocated.

Last week, President Thabo Mbeki paid a visit to Khartoum where he met his Sudanese counterpart, President Omar al-Beshir. The two leaders agreed to encourage co-operation in the field of oil exploration.

The department of foreign affairs said in a statement before Mbeki's visit that several South African companies had interests in the Sudan including the Global Railway Engineering Consortium of SA and PetroSA.

PetroSA had signed an agreement with the Sudanese state oil company, Sudapet, for exclusive oil concession rights for oil Block 14 in the Sudan.

"PetroSA has also concluded a capacity building agreement for the development of technical staff in Sudan."

Yesterday, PetroSA said in a statement that Sudan had awarded it a "study agreement" under which it would send technical personnel "to conduct the necessary tests to ascertain the availability of oil in the block allocated".

It added: "Sudan will also send personnel to PetroSA for training to enhance their technical know-how.

"The Sudan will benefit commercially from the venture, while obtaining the critical skills they need to develop their oil industry further.

"The significance of this agreement is that it is an African country-to country partnership, where a win-win solution is pursued in line with the objectives of the New Partnership for Africa's Development."

The Global Railway Engineering Consortium of SA concluded a $21 million (R119 million) contract with the Sudanese Railway Corporation for the rehabilitation of railways and rolling stock on December 9 2004.

During his visit, Mbeki travelled to Kenya to witness the signing of a major peace agreement between the Sudanese government and the Sudanese People's Liberation Movement of southern Sudan.

The movement would join Khartoum in a transitional government of national unity.

South Africa agreed that, with Unisa, it would train the movement's leadership in the skills needed to participate in the transitional government.

South Africa is the chair of the African Union (AU) committee on post-conflict reconstruction of war-affected areas in Sudan, and in that capacity, Mbeki visited Sudan's western Darfur region where warfare continues between the government in Khartoum and its militias and rebels, despite a ceasefire agreement.

Mbeki met government and other officials, including the SA National Defence Force members participating in the AU ceasefire commission.

He also met Sudanese displaced by the war.






Post an article on this thread:

Your nickname: dexter01




By Peter Fabricius, The Business Report

JOHANNESBURG, Jan 5, 2005 -- PetroSA, South Africa's national oil company, is to send technicians to the Sudan to establish whether there are commercially exploitable quantities of oil in an exploration block that it has been allocated.

Last week, President Thabo Mbeki paid a visit to Khartoum where he met his Sudanese counterpart, President Omar al-Beshir. The two leaders agreed to encourage co-operation in the field of oil exploration.

The department of foreign affairs said in a statement before Mbeki's visit that several South African companies had interests in the Sudan including the Global Railway Engineering Consortium of SA and PetroSA.

PetroSA had signed an agreement with the Sudanese state oil company, Sudapet, for exclusive oil concession rights for oil Block 14 in the Sudan.

"PetroSA has also concluded a capacity building agreement for the development of technical staff in Sudan."

Yesterday, PetroSA said in a statement that Sudan had awarded it a "study agreement" under which it would send technical personnel "to conduct the necessary tests to ascertain the availability of oil in the block allocated".

It added: "Sudan will also send personnel to PetroSA for training to enhance their technical know-how.

"The Sudan will benefit commercially from the venture, while obtaining the critical skills they need to develop their oil industry further.

"The significance of this agreement is that it is an African country-to country partnership, where a win-win solution is pursued in line with the objectives of the New Partnership for Africa's Development."

The Global Railway Engineering Consortium of SA concluded a $21 million (R119 million) contract with the Sudanese Railway Corporation for the rehabilitation of railways and rolling stock on December 9 2004.

During his visit, Mbeki travelled to Kenya to witness the signing of a major peace agreement between the Sudanese government and the Sudanese People's Liberation Movement of southern Sudan.

The movement would join Khartoum in a transitional government of national unity.

South Africa agreed that, with Unisa, it would train the movement's leadership in the skills needed to participate in the transitional government.

South Africa is the chair of the African Union (AU) committee on post-conflict reconstruction of war-affected areas in Sudan, and in that capacity, Mbeki visited Sudan's western Darfur region where warfare continues between the government in Khartoum and its militias and rebels, despite a ceasefire agreement.

Mbeki met government and other officials, including the SA National Defence Force members participating in the AU ceasefire commission.

He also met Sudanese displaced by the war.

This is from the Sudan Tribune today;

By Edmund Blair

CAIRO, Jan 6 (Reuters) - An imminent peace deal to end war in southern Sudan will encourage expansion in an oil industry that has managed surprising growth despite two decades of war.

Although Western majors are likely to remain cautious on Sudan, the peace deal is likely to facilitate the operations of the Asian firms that have led developments in recent years.

The peace deal, to be signed on Sunday in Kenya, will end a war that erupted in 1983 in the south. After intense bargaining between the government and the rebel Sudan People's Liberation Movement (SPLM), southerners secured half the oil revenues.

The deal will not cover the separate conflict that flared up in western Darfur last year and which has made some 1.6 million people homeless.

Sudan's oil production, currently around 320,000 barrels per day (bpd), comes mainly from fields in the south, with Chinese, Malaysian and Indian firms the big investors.

"Sudan is attractive. There is large exploration upside. It is the kind of place majors would be interested in, but the risks will remain quite high until Sudan is able to resolve its internal problems," said Teju Akande, analyst at Edinburgh-based energy consultants Wood Mackenzie.

"The country has been getting investment, not from the Western world, but it has been getting investment from the East."

Analysts say state firms working to secure supply for Asia's energy-hungry economies face less shareholder pressure over issues such as human rights than Western firms, many of whom have quit or reduced their presence in recent years.

With one new field ramping up production this year and another, giant, development set for first oil, and total output expected to reach 500,000 bpd in 2005, the country's petroleum industry has flourished under Asian influence.

UNTAPPED EXPLORATION POTENTIAL

Estimates of reserves range from more than 560 million barrels to over one billion, but analysts say swathes of the country are unexplored so actual reserves could be much higher.

That investment has encouraged an optimistic outlook from Sudan's government.

In December, oil minister Awad Ahmed al-Jaz said Sudan had signed a new prospecting agreement with an unnamed firm for one of its exploration blocks, and that at least one further deal on untapped acreage was expected in 2005.

As well as pushing its oil production, Sudan has struck a deal with China to refurbish and expand its Khartoum refinery.

The government is also negotiating with Indian, Malaysian and European oil firms to build a new 100,000 barrel per day refinery in Port Sudan that would expand export opportunities.

Asian dominance of prime sites has reduced openings for Western firms, if they do seek to build up their presence.

For the time being, they are likely to sit and wait for a resolution to the conflict in Darfur, analysts say.

DARFUR FAR FROM PRODUCTION AREAS

The main areas of fighting in Darfur are hundreds of km (miles) from Sudan's key Muglad Basin production area.

Consequently the threat to the oil industry from the Darfur conflict comes more in the form of international pressure over the government's behaviour in the crisis, including threats of sanctions, although a rebel group did attack a small South Darfur oil pumping station in December.

"Even if the conflict in Darfur is not related to the oil issue, the fact that the country is experiencing a humanitarian crisis due to conflict cannot be overlooked by anyone," said Christine Batruch, vice-president of corporate responsibility at Sweden's Lundin Petroleum AB.

She said Lundin, which has reduced its activities in Sudan but retains an interest in one block, would plan its activities for 2005 after the signing of the north-south deal.

But she added: "Most of the prospective acreage has been taken by non-Western companies and as such there are limited opportunities."

Total said in December it had reached a deal with the government to update terms on a block it operated until security issues forced it to suspend activities in 1985, but added that operations could only resume once peace was restored.

"The conflict in Darfur could potentially impact security in the south, in which case we would have to assess the situation," a spokesman said from Paris.

Talk of imposing sanctions on Sudan over the Darfur conflict has added to uncertainty. But analysts said China, with its interests in Sudanese oil output and its veto power at the United Nations, would likely oppose any U.N. sanctions move.