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

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.

This might be a long article by David Horgan but it is well worth the read.

I have lifted it from Interactive's bb with acknowledgement to "fatgreek".

It is a clinical and unemotional analysis of the Middle East situation.

David Horgan is wasted in business. He should be in politics.

We could do with rational clear thinking like that in the Middle East to replace the Bush/Blair supported gunslingers that shoot from the lip - only to apologise after killing innocent civilians. And that comment applies to both sides of the conflicts.

Now I understand why PET has developed such a powerful business position in Iraq and Jordan.

The oily one


Oil squeeze could cause recession

06 August 2006 By David Horgan
The world economy has taken $70-a-barrel oil in its stride.

The world economy has taken $70-a-barrel oil in its stride.

But with surging commodities reflected in rising interest rates, will geopolitics de-rail the boom?

The world has no genuinely surplus capacity in oil production, refining, tankers or skilled people. Any major supply interruption, from Venezuela to Arabia, will spike energy costs.

Eighty per cent of remaining oil and gas lies in a narrow axis from western Siberia to Arabia.

Policy mistakes in the Middle East could spook markets by triggering another oil supply crunch, as in 1979 when the Shah fell. Then Iran produced 15 per cent of the worlds oil.

Today it is 5 per cent, of which only 3 per cent is exported.

But now Iran is also a major gas exporter and could temporarily shut the straits of Hormuz, through which 25 per cent of traded oil flows.

The Bush administrations policy has led to delays in the construction of Iranian gas export pipelines to India, and eventually China and Europe.

This exacerbates the oil supply squeeze, since gas partially substitutes oil.

We have smoothly absorbed a tripling of the oil price since 2002 - but supply disruption would be more damaging than increased price. The danger of shortage itself creates shortages, as users and speculators inventory.

A major risk premium is nowa permanent feature of energy costs. Gold and safer investments such as bonds will rise and energy-intensive stocks will fall.

Risk perceptions will rise, as players evaluate the small chance of nuclear catastrophe and the irony that it is over-reaction to the limited terrorist threat that exacerbates instability.

There may be a temporary dollar rally as it rediscovers its safe haven status.

But the long-term drift to the euro will strengthen.

Lebanon, Israel and the Arabs have locked themselves into a negative loop: the grievances and excesses of one provoke the other.

Israel is the regional superpower, with uncritical US backing. But demographics are in favour of Arabs: already there are slightly more Arabs than Jews in Israel/Palestine.

For a generation, Israelis can establish barriers, Bantustans and effective apartheid - justified by security needs, but as South Africa learnt, such policies are incompatible with prosperity and a free society.

Eventually, there will be a multi-ethnic, multi-religious state in the Levant. For Israel, the writing is on the wall.

Military and politicians are slow to understand longer-term trends that seem obvious to business people. Israels high command didnt want to withdraw from Lebanon in 2000 and were anxious for a rematch.

Israels assault on Lebanon is not motivated by the captured soldiers. They could easily be swapped, as so often before. The attacks are designed to degrade Hezbollah, in preparation for a US attack on Iran. The Iranians also know an attack is likely, and have prepared for reprisals with rockets in Lebanon.

But strategic bombing of infrastructure will not intimidate the Lebanese anymore than Israels 18-year occupation. Last month I was amazed to hear wealthy Beirut Christians praising Hezbollahs guts and patriotism - as surprising as Ian Paisley praising the IRA.

Hezbollah is an organic part of Lebanese society, with extensive non-military activities.

The most that can be achieved is to degrade them temporarily.

The actors cannot be defeated.

Attacks on Lebanon, Gaza and Galilee will achieve little.

We need to make the vicious circle virtuous. We need to cut a deal with the major players, especially Iran.

Sabre-rattling by either side seems irrational - but they are driven by ideology and domestic politics. Wild rhetoric is not meant to be taken seriously.

Iran is not proven to be doing anything illegal: they are entitled to develop nuclear power, as was the Shah in the 1970s. Yet, why would the country with the worlds second largest gas and oil reserves - besides solar and hydro potential - need nuclear power when it has low per capita energy consumption, exploration upside and continues to flare gas?

This question wasnt asked of the Shah when Iran was an even bigger energy player.

The western military are sensibly wary because they realise the high risk of failure.

But neocons are trying to provoke a crisis. There are no practical military options. The trouble with bombing is that you wont destroy targets unless you bomb repeatedly.

Theyll miss buried or camouflaged sites. So theyll have to target big, visible structures like infrastructure. Even if they destroy buried facilities, the attackers wouldnt know that they had.

So repeated, intensive strikes would result. The 1991 Iraqi experience wont be repeated, since Saddams Osirak operation was an advertised, vulnerable nuclear reactor - which is hard to repair because of micro-fractures.

Israel could only carry out an Osirak-style raid and not heavy, repeated attacks. Irans facilities are buried and dispersed and the critical element of surprise is absent.

A land invasion is impractical for reasons of geography and population. Iran is a large, mountainous country with 70 million people, of which 12 million live in Tehran.

Unlike Iraqis or Afghanis, they are not easily divided: 98 per cent of the population are Muslim, overwhelmingly Shia.

Most ethnic minorities have cordial relations with Tehran.

Half the people are under 15.

Their desire for international fashions and reform makes them seem open to western pressure. But young people and women voted disproportionately for the new hardline president, who plays to Persian nationalism.

The cult of martyrdom is an important part of Shia tradition.

Iranians remember the 1953 coup when the CIA toppled Irans elected president and installed the brutal Shah, as well as US sanctions and support for Saddams bloody invasion in the 1980s.

You make peace with enemies, not friends. Never humiliate an opponent nor squeeze him into a corner unless he is powerless and there is no alternative. Negotiation is a rational dance of concession and counter-concession. Trust is hard to build and easily undermined.

It is dangerous to act without thinking through the consequences, particularly when signals may be misunderstood by persons from different backgrounds.

Hostile rhetoric has the opposite effect of that intended: encouraging Iran to divert resources to defence rather than developing their economy and providing jobs. We should support positive reformers.

I have travelled extensively throughout Iran in recent years and have seen the gradual process of reform. In the sophisticated cities women probably play a greater role in the public service and middle management than they do in Ireland.

In remote villages women are clad in black and play a minimal role in business.

The stakes are high. Some of the largest oil exporters, from Saudi Arabia to Russia, are now alienated from Anglo-American policy. They must be tempted to reduce output to pressure Washington. If that were to happen, a global recession in 2007 would result.

David Horgan is managing director of Petrel and chief executive of Pan Andean Resources.

So if/when our wonderful leader does take the hint and packs his bags, we know who should be topping the potential candidates list.
Not wanting to stretch the previous post into a full blown discussion, but although the article was extremely well written and argued, it did not give a solution that in my mind would solve the problems referred to.
As has been often said, how can you negotiate with Iran who have gone on record(through their leader) stating that their aim is to see Israel wiped of the face of the earth.
The simple question is, 'Can we allow the mullahs to have an atomic bomb at their disposal'.
I also don't have an answer.

With BP's mess in the huge Prudhoe Bay oil field in Alaska and Bob Malone, chairman of BP America, saying that in a worst-case scenario it could take weeks or months to replace the pipelines.
The urgency to pump and/or find more oil is getting greater every day.
If the Israel, Lebanon situation spreads to action against Syria or Iran, one speculator put the possible oil price at over 200$ per barrel about 3 times todays price.
It is always a fact that from bad situations some make good.
Whatever happens who will doubt that the oil companies profits will continue increasing.

Pan Andean Resources says in early stage of assessing oil project in Iran

LONDON (AFX) - Pan Andean Resources PLC, an oil and gas producer in South America and the Gulf of Mexico, said it is at an early stage of assessing an oil exploration project in Iran.

Persian Gold PLC, a company under the same management as Pan Andean, is already exploring for gold in the Takestan mountains west of Tehran, while another company under the same management, Petrel Resources PLC, has signed an oil field development services contract on the Subba & Luhais oil fields in the predominantly Shia south of Iraq.

Looks like things are moving in the area, Iran, Jordon, Iraq.

nice write up in investors chronicle today

Pet not mentioned but I especially like the bit underlined. As we know Pet did some geo surveys several years ago and as I understand it still has access to said data under the earlier agreement with the Iraq Government.

Snippets from Article.

Oil majors seek dominant Iraq position Published: Thursday, 24 August, 2006, 09:09 AM Doha Time

The worlds top oil companies are manoeuvring intently to win a stake in their oilfield of choice when Iraq finally opens to multi-billion dollar investment.

From a safe distance, multinationals are poring over data from Iraqs most promising oilfields and some of its older workhorses to gain the edge when the bidding begins.

Iraqi Oil Minister Hussain al-Shahristani has signalled the race for oilfield deals worth $20bn could start this autumn.

Only small firms, such as Norways DNO have dared to venture into Iraq.

(OK we know Pet is also one such firm)

For full article see link...http://www.gulf-times.com/site/topics/article.aspx?cu_no=2&item_no=104123&version=1&template_id=48&parent_id=28

A very interesting article, well worth a read.

Hawrami responds to comments on Petroleum
Dr. Hawrami:In 2008 we should go to over 200,000 barrels of oil per day.

The initial Kurdistan Regional Government (KRG) Draft Petroleum Act was produced for internal discussions in early July 2006. At the same time, a similar compatible Draft Law was also prepared by the KRG for the whole of Iraq, which was presented to the Federal Authorities.

As I said earlier, we only have four signed contracts, but I am unaware of any official objections from Baghdad on them. For the record, everyone should be aware of the good standing of all these contracts, as their legality is clearly reaffirmed by Article 141 of the Iraq Constitution, which states that Legislation enacted in the region of Kurdistan since 1992 shall remain in force, and decisions issued by the government of the region of Kurdistan, including court decisions and contracts, shall be considered valid.

For full article see link....http://www.kurdishaspect.com/doc824104.html

Agreement nearer on the long awaited hydrocarbon laws.
2517

good volme today,nice close to the day

that's the finance in place.............

Petrel Resources PLC
13 September 2006

Strategic Partnership



Petrel Resources is pleased to announce a strategic partnership and cooperation
agreement with ITOCHU Corporation ('ITOCHU'). The strategic partnership will
cover future exploration and development activities in the Iraqi oil and gas
industry.



ITOCHU is one of the largest and most respected Japanese conglomerates. ITOCHU
launched its upstream activities in Indonesia and Sakhalin Island in the 1970s
and has been a successful player in the upstream energy sector ever since
through its active participation in the challenging environments of Algeria and
Azerbaijan, as well as other oil producing regions such as the North Sea and
Western Australia. In addition to the above-mentioned upstream activities, the
ITOCHU group is also one of the largest traders of crude oil in the Far East and
is a major force in numerous business sectors, including areas such as steel
pipe supply, finance, logistic and plant businesses.



The cooperation agreement between Petrel and ITOCHU will initially cover work on
the Merjan oil field under a Technical Cooperation Agreement with the Iraqi
Ministry of Oil, subject to applicable laws. ITOCHU will also have a first look
at future Petrel projects in the Iraqi oil & gas upstream sector.



As part of the cooperation agreement, ITOCHU will contribute towards Petrel's
historic costs in the Iraqi oil & gas sector and will cover a fixed share of the
costs of the current study.



Petrel Managing Director David Horgan welcomed the development:



'We have gotten to know ITOCHU well over several years. There is a near perfect
fit with Petrel. ITOCHU, one of Japan's leading companies, with its strong
balance sheet and long-term perspective, is a strong player in upstream oil and
gas business. There is no better partner for us in our quest to expand and
deepen our Iraqi activities.'



A fuller Corporate Profile is available on the ITOCHU website at:

http://www.itochu.co.jp/main/index_e.html





For further information please contact:
Petrel Resources Plc

David Horgan + 353 87 292 3500
John Teeling +353 1 833 2833
Corporate Synergy

Ian Rice +44 (0) 117 933 0020
Craig Howie +44 (0) 20 7448 4400



www.petrelresoucrces.com


This information is provided by RNS
The company news service from the London Stock Exchange

YEEAAAAAGGGHHHHHHHHHHHHHHHHHHHHHHHHHH!!!

Fantastic news.
At last they have been taken seriously!
Roll on the PSA's!

yes,things looking great now,everything coming perfectly together

Results look good.
Several prospects on track with no noted problems (obviously in Iraq anything can happen).
With the balance sheet far better than I expected (nicely surprised), they are well able to sustain the pro quo.
Pet have a good team of partners, both inside and out of Iraq.
If things proceed as hoped Pets next 6 months will be very interesting.
Still a risk share, but looking at 12 months ago, a far better punt now.

This is still heading nowhere but down. Iraq will disintegrate into a full civil war when the US/UK leaves and PET will go with it.

The whole oil sector is down today due to there being a lot of uncertainty about the oil price.
Also DNO a Norwegian oil company has been told that the Iraq government does not have to honor agreements made by regions such as the Kurdish controlled areas.
People want to get out of stocks such as DNO in times of turbulence.
It appears Pet are being dragged down by the sector in general.

DH has just been interviewed by CNN.
It is well worth listening to. Last about 9 mins.

http://www.opec.org/home/Multimedia/videos/2006/OPEC%20Seminar/InterviewHorgan.htm

Nothing directly to do with PET, so will only put the link.
The article is well worth a read, for those who want a excellently written overall picture of the future in IRAQ. Peace prospects in IRAQ look even less likely.

Max Boot: Iran and Syria aren't our friends in Iraq
Our enemies have no interest in bailing us out, unless they win major concessions.
November 29, 2006

http://www.latimes.com/news/opinion/la-oe-boot29nov29,0,5922386.column?coll=la-opinion-columnists