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

Difficult to imagine number like these.


The global oil industry is worth $2.4trillion. While oil consumers are suffering , the increased oil prices have benefited oil companies across the board. Chevron boosted this year its first-quarter earnings 49 percent over a year ago to $4 billion, while ConocoPhillips and Exxon Mobil, posted similarly large first-quarter earnings. Combined, the three oil companies earned $15.7 billion during the first three months of this year. That's 17 percent more than the trio made during the same time last year. For all of 2005, they went on to pocket a combined profit of nearly $64 billion.

OK we know that against these giants, PET is a tiddler, but whichever way the price of crude oil moves, oil companies (and our beloved chancellor) can't loose. Once Pet get fully established they are in a business that can almost print it's own money.
Yes things can still go badly wrong, but oil along with most commodities has a big advantage over the vast majority of other items/produce.
It's not that we want or like oil (it's smelly, messy and expensive). We need it and in modern society we can't live without it.

Now if a tiny fraction of this wealth comes our way!

I was actually pondering whether or not one would be better off investing in the likes of Petrofac who supply drilling equipment and the like. The analogy I draw is with the suppliers of the picks and shovels and tents etc to the gold rush prospectors to California and Yukon ..... They may not have made ther bucket-loads of the few who struck it lucky, but they sure made more than their share

Nothing wrong with that theory, Cynic - plenty of the gurus like it, and it makes a lot of sense. Being a greedy sort with a ruinous gambling streak, I like my E&P co's undiluted, but even there I seek to mitigate my risks by predominantly picking those with production on the horizon. Or something. PET is one of those that's always at the centre of speculation; right now the market is still so queasy when it comes to digesting good news that I wonder if one could possibly afford to wait for the RNS that says "We've struck oil in Saddam's back garden" and then buy in.

I don't need to wax on at great length. Didn't the last Shares mag carry a recommendation along the picks 'n' shovels line?

Cynic,

Yes a good analogy re the gold rush.
I liken it to medium blue stock type shares (the suppliers of the picks shovels etc), and the high risk, high reward lot (pet and the others prospectors).
Pet is hopefully our gold rush big winner, and I hope it does not pan out (an old Klondike saying).
A well balanced portfolio is the key as I am sure we all agree.

NICE RISE BOYS!

This does look very risky still. It is trying to do business in a country that is on the brink of civil war and is unlikely to be peaceful for many years yet. No wonder it is in a long term down trend.

brink of civil war ? it alread is civil war. dont listen to politicians..... they arent exactly going to admit civil was is happening are they ? Every definition of civil apparent in Iraq..... civil is happening.. has been for a while.

Fusebox,
Agreed. The thing is, wherever there are wars, especially civil wars, there are area's of the country that are relatively calm, either due to certain area's of no strategic importance, or as in several main oil field locations, one side or the other have total control.
If you relate Iraq to the Balkans during there ethnic cleansing (a bit like Rwanda, although according to most western governments until many thousands were ethically cleansed, it was not happening either) there were several parts of the country where life (business) went on without much interruption.
Iraq is almost a north south divide.
PET as often said being none coalition country linked, and trying it's best to employ locals whenever possible do have an advantage over many such companies.
Of course the risks are still great, but if you look at the figures for last week, there was more internal violence than over any time in the last year, but oil flow was also at it's highest level.

From The Wall Street Journal

Iraq Lifts Oil Output in South
By Chip Cummins in Basra, Iraq, and Hassan Hafidh in Amman, Jordan

Iraqi engineers have significantly lifted crude-oil output capacity in the country's southern fields, delivering a short-term shot in the arm to Baghdad's new government and underscoring its oil supply's vast geologic potential despite increasing sectarian violence and insurgency.
End of extract.

This does prove a point. The oil must flow, and the authorities will make sure it does, no matter what.

nice tick up...looking good + AGM tomorrow

AGM, statement out. Nothing of new substance, re further contracts, but the updates look very good.
We now have a fairly good time scale for present and future developments.
I would think the presentation for tomorrow will expand on the detail.

What is the poistion of PET now can any one help

It will be a few months before the Hydrocarbon law is passed, then PSAs will be ratified and another 12 to 18 months before a single barrel of oil is extracted. You are looking at 2 years minimum, possibly longer if the continuing unrest in the region destroys the infrastructure.

This is a long term play if you expect Pet to be the next Cairn. However, if the PSAs are ratified this year, then you can expect the SP to rise significantly. Highly speculative but can be very rewarding. Good luck.

Ticking up nicely on small volume.
2517

'Hi all' Did'nt quite make 435! did a nice run up to 160 back in oct 04
.
I'm up and running again after having part of my internal bits removed, the big 'C' don't you know...

Mike........

CHARTIST2004....best of luck to you.hope your feeling fine now...PET will cheer you up soon

A very interesting article re the Middle East troubles.
As Pet is not mentioned I have put the link for those who want it. It is a very frightening well written piece, which unfortunately gives (the way I read it) no hope.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060731/OPINION03/607310301/1020

BAGHDAD, Aug 2 (Reuters) - Iraq is expected to start talks with major companies in two months to develop its oilfields and some are eager to begin work even before a hydrocarbon law is in place, its oil minister said on Wednesday.

Some companies said they were ready to work before the hydrocarbon law is approved. Shahristani said fields chosen from each part of Iraq will be offered to foreign companies.

"Our plan is to begin in one important field from each part of Iraq, one in the north, south, west, central and Kurdistan," he said.
END OF EXTRACT.

For full article see link.
http://www.alertnet.org/thenews/newsdesk/GEO247098.htm

My comment.
Although not mentioned, I would think that as PET are already fairly well established in Iraq, and having a head start on many if not all of the Majors, they will either benefit directly, or indirectly by perhaps piggybacking of those said Majors.
Lets hope corruption (the majors can offer bigger bribes) does not get in the way too much.

http://news.bbc.co.uk/1/hi/uk/5240808.stm

Civil war is a more likely outcome in Iraq than democracy, Britain's outgoing ambassador in Baghdad has warned Tony Blair in a confidential memo

Civil war, although obviously bad for the Iraq people is not necessarily going to make violence around the oil fields worse.
In many areas of past civil wars (Bosnia for example) there were many areas that were relatively peaceful.
At the moment even in so called calm areas of Iraq there is unrest with localized insurgency.
A full blown civil war can bring the main body of the waring factions to areas where the main demarcation lines are drawn up.
Also the security services (not the Iraq army as they will be divided to some extent along ethnic lines) can concentrate more on the vital installations such as the oil infrastructure. The waring factions will be too busy trying to kill each other to bother with the security forces to the extent they do now.
Obviously I do not condone war of any kind if avoidable, but sometimes a civil war clears the air so to speak. Again look at Yugoslavia that was. It is a far more peaceful area now than in the couple of years proceeding their civil war.
Iraq has been at war within itself for months, just not officially.
My comments, blunt but I feel true may sound blasbut facts speak for themselves.
Obviously these are my opinions only.