March 02, 2003

Petrel to fight for Iraqi oil deal
Juno McEnroe



DUBLIN-BASED oil firm Petrel Resources, which claims to have made a potentially-lucrative deal with Iraqs Ministry of Oil, is threatening to sue any country or company that attempts to seize its property in the event of a regime change.
As Saddam Hussein faces further scrutiny from the international community, Petrel is insisting that, under international law, it has acquired the right to explore a 10,000 sq km area of the Iraqi western desert.Last May the Dublin group finalised a 100-page contract with the Iraqi leaders oil ministry. Saddam has yet to give his final approval to the deal.

David Horgan, managing director of Petrel Resources, said the Iraqi state is committed to a binding contract and that this will remain the case even in the event of a regime change. Everyone is looking for a piece of the action, he said. Iraq is the cornucopia of the future. The world is presently burning five barrels of oil for every one that is found.

Industry sources said last week that even though Saddam gave approval for several contracts last December, including Petrels, he is holding back releasing the news in a bid to put pressure on governments and prevent an attack on Iraq.

It is understood that Saddam does not review oil exploration contracts in full but gives his approval on the basis of a one-page summary drawn up by his close advisers.

Petrel Resources says its contract with Iraq gives the company rights and obligations under an agreed work programme for the western block as well as profits from any discoveries made.

Everyone assumes America is orientated by oil. And it is. But the last thing they expect to do is to ride into town and take over, said Horgan.

All we have to do is prove we have the land title and show the work done. These are agreed terms. If another country takes our contract, we can sue them.

Sovereign immunity does not exist in mineral concessions. It would even be possible to settle the case here in Dublin. We would skip the Iraqi administration and go straight after the relevant country.

Petrels technical specialists claim the block has the potential to produce between three and five billion barrels of oil, which is on a par with other discoveries in the region.

Saddams oil ministry continues to send Petrel Resources details of seismic data on desert blocks in western Iraq, despite the threat of war. Shares in Petrel Resources are traded in London on AIM. They dealt on Friday at 5p, valuing the company at about 2m (2.94m).

COMPANIES UK & IRELAND: Petrel fate hangs on Iraq deals
By John Murray Brown
Financial Times; May 10, 2003


In a room in Dublin, developments in Iraq are being followed with particular interest.

John Teeling, founder and chairman of Petrel Resources, a small Irish oil and gas exploration company, is keeping his fingers crossed that the exploration licence signed last year on a block in Iraq's western desert, and the work done on rehabilitating two fields in the Basra area, will survive the change of regime.

Pertamina, the Indonesian state company, Petronas of Malaysia and ONGC of India have all taken blocks in the western desert.

But Petrel, which has a market capitalisation of 5m, is the only western oil company to have maintained an active presence in Iraq, even as the threat of war loomed.

It is also keen to push ahead with the development project near Basra, where in 1999 it conducted a 160,000 feasibility study into rehabilitating two fields damaged in 1981 during the Iran-Iraq war.

The shares, which are traded on Aim, have already doubled in the past month from 3p to about 6p, reflecting optimism that, with the speedy end to hostilities, Petrel could soon realise its investment.

Gervaise Williams, who runs Gartmore's UK and Irish small companies fund, says the key test now is whether the administration that emerges recognises Petrel's claims.

Gartmore owns 8 per cent of Petrel. It and Scottish Value Managers are the largest institutional holders.

Mr Williams says: "It was important that they managed to secure a licence in the western desert. Under civil law, I think that would be enforceable. There will probably be much more competition in the Basra area."

Douglas Wright, a private investor who owns 2 per cent of Petrel, estimates the company could be worth 10 a share if it gets the go-ahead on the Basra fields.

However, Barrie Newton, of Rowan Dartington, Petrel's broker, is more cautious. "There are so many question marks. This is a very small company with virtually no assets. It has very good contacts in Iraq but there has been a major political change. We just don't know what the attitude of the new administration is going to be. It's foolish to speculate."

David Horgan, Petrel's managing director, who like Mr Teeling is a Harvard graduate, plans to travel to Baghdad later this month.

If the UN sanctions are lifted, allowing the company to import key equipment, he wants to conduct fresh seismic studies in September.

By early next year, Petrel could be drilling what would be the first well in the western desert for more than two decades.

Today, Petrel's immediate task is to make contact again with its key local advisers, using all possible means. "Our travel agent in Jordan has actually been very helpful tracking people down," says Mr Teeling.

The oil ministry was quickly secured by the advancing US troops, unlike the archaeological museum.

Petrel says much of the data had been moved for safe-keeping to a different location before hostilities began.

Mr Horgan says many of the company's key contacts in the oil ministry are now back at their desks.

"Mazen al Jumiraah, the man now in charge, I knew when he was the director-general in the technical department," he says. "He's an oily, not a party official."

The two fields near Basra - Subba and Luhais - were producing 180,000 barrels a day before 1981. To return them to full production will cost $350m (218m) and take three years.

Mr Horgan says: "We deliberately picked two fairly smallish fields. We didn't want to provoke the super-majors. I think there's going to be plenty of room for everyone in Iraq. Opening a market like this only happens once in a lifetime."

Certainly, Petrel's title to the two fields in Basra is tentative, as unlike Lukoil, the Russian oil company which has a contract to develop the much larger west Qurna field nearby, Petrel never agreed terms.

The company claims the reason was the contract the Iraqis wanted it to sign would have been in breach of UN rules.

But Mr Teeling says: "Even if we assume the worst, and we lose out to the larger oil companies, we've been there and done the work. We're 18 months to two years ahead of everybody else."

Mr Williams at Gartmore believes Petrel should be in a strong position to talk to partners.

Indeed, this week Mr Horgan was in Houston, the US oil capital, doing just that, in a series of meetings with oil executives.

This is a dodo
please beware

AYE !

aye aye

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Sunday Telegraph today.

Petrel to raise 60m to exploit Iraqi fields
By Edward Simpkins (Filed: 11/05/2003)


Petrel, the Dublin and London-listed oil and gas exploration company, is to raise up to 60m through a share placing to fund development of oil fields in Iraq.

Petrel, which is listed on Aim, was granted exploration rights by Saddam Hussein's regime over a huge area in Iraq's western desert. It also has rights to two oil fields near Basra, which were damaged during the Iran-Iraq war and at one time produced 180,000 barrels per day.

The company estimates that repairing the surface infrastructure of the two fields will cost 350m. Around 80 per cent of the cost will be paid for by project finance but between 50m and 60m of equity will need to be raised by Petrel.

Financiers specialising in raising funds for investment in natural resources projects have started taking soundings in the City. Despite remaining in a legal limbo, shares in Petrel have doubled to 6p in the past month on optimism that its title will be recognised.

Petrel delayed completing binding contracts with the former Iraqi regime since it would have been obliged to start development work - a move which have put it in breach of United Nations resolutions against Iraq. However, the company believes it has a good claim and has spent several years carrying out exploration and amassing data on its oil fields.

David Horgan, the chief executive, is confident that Petrel's title to the two oil fields wil be recognised by the new administration in Iraq. He is travelling to Baghdad within the next three weeks to re-establish contact with officials at the Iraqi oil ministry.

John Teeling, the chairman and founder of Petrel, said: "I'm delighted to see that certainty is coming back It doesn't really matter to us who is in charge as long as we have some certainty."

Where are Iraq's missing oil billions?
(Filed: 18/05/2003)


Much of the $70bn raised by the UN's Oil for Food programme ended up lining the pockets of middlemen and Saddam's associates. Edward Simpkins investigates the scams

Iraq's dilapidated oil fields are creaking into life again for the first time since the war. With the oil from several of Iraq's fields beginning to flow once more, the dollars to pay for desperately needed food, medicine and other basic supplies should start flowing too.

But until sanctions are lifted, suppliers can only do business with Iraq through the United Nations' Oil for Food programme. Some 60 per cent of Iraq's 27m people depend on this programme for their food.

The tragedy of these arrangements is that they were wide open to fraud. "Basically, the Oil for Food programme corrupted just about everyone who came into contact with it," says David Horgan, the chief executive of the Aim-listed oil company - Petrel.

Petrel, which is based in Ireland, spent years trying to get close to Saddam Hussein's government. It was awarded contracts to operate oil fields and given vast exploration rights in Iraq's Western Desert.

The Oil for Food programme - described by General Tommy Franks, the commander of US forces in Iraq, as "Oil for Palaces" - exists in a kind of legal twilight zone. Shady middlemen thrived on a scheme that is thought to have provided kickbacks worth billions of dollars to Iraqi officials.


Click to enlarge
The basic flaw in the programme was that the Iraqis could set the price at which the oil was sold to traders.

That gave the Iraqis scope to sell oil at below the market price, allowing middlemen to make an inflated profit when they sold it on.

This profit would then be split with the Iraqi oil ministry. It was a nice and substantial earner for everyone directly involved, though the Iraqi people saw less food and medicine than was their due.

As one example, in November 2000 Petrel flew a plane loaded with food and medical supplies provided by the Irish government into Iraq under the Oil for Food scheme. Its reward from the Iraqi regime was an oil "uplift', or the right to export a tanker full of crude oil from Iraq and find a buyer on the international market.

"SOMO, the Iraqi State Oil Marketing Organisation, would offer the oil at around $20 a barrel for a tanker load of 2m barrels," says Horgan. "The Iraqis would always price the oil at about 60 cents a barrel less than you could sell it on for. So there would be a wide margin of about $1.2m on every tanker that you would have to share with the ministry.

"You would pay 10 per cent of your share, around $60,000, upfront to an account in Oman controlled indirectly through intermediaries by the Iraqi oil ministry," he says. "That 10 per cent was refundable in case you got cold feet. It was all very businesslike.

"You would then find a refiner to buy the load. It would be one of the big oil companies, which would give you a refiner's letter that would be used to authorise the release of the oil. The refiner would send a tanker to Mina al-Bakr in southern Iraq and the balance of around $40m would be paid into the UN's account.

"You would then receive, perfectly legally, your commission from the refiner and pass half of it, less the 10 per cent you'd already paid, to the Iraqis through the account in Oman."

Horgan says that, after the scheme was explained to him by Iraqi officials, he declined to accept the uplift because he could not find a legal way of doing the deal.

The Oil for Food scheme had been in place for six years before the UN's Office of the Iraq Programme endeavoured to limit the scope for kickbacks. In October 2001, it belatedly introduced a reform - so-called "retroactive" pricing - whose effect was to undermine the Iraqi ministry's ability to fix the price.

However, this reform had one deleterious effect. Saddam Hussein's administration, no longer incentivised by the profits it could skim, slowed down the supply of oil. In turn, this led to a reduction in vital supplies reaching the Iraqi people.

According to a note sent last November to the UN Security Council from UN officials administering the scheme, the gap between the cost of food and medicines demanded by the Iraqis and the revenue available to meet it was $10bn.

The note says that the latest phase of the programme had raised $5bn in oil sales. After deductions, just $3.49bn was available for humanitarian relief. It points out that over the first 11 phases of the programme, sectors such as education, water, sanitation, electricity, agriculture and health received only between 56 to 77 per cent of the funds that should have been allocated to them.

Even when the money was found, it was often spent on shoddy goods and poor quality food that was unfit for consumption. "The Iraqis chose their suppliers and they may have made bad choices," says a UN official.

The identities of the suppliers that profited may never be known because the Oil for Food programme operates under a veil of secrecy. Despite the staggering sums involved, with supply contracts worth $26bn having been awarded over the past eight years, the UN has not divulged the identity of a single company that won business.

Documents lodged on the UN's website list some of the thousands of contracts awarded. But only the nationality of the suppliers is published, not their names.

However, basic items and foodstuffs appear to have come mainly from other Middle Eastern countries. More complex manufactured items were provided by French and Russian businesses.

In total, more than $70bn has been raised by the Oil for Food scheme under its various phases. Of this, $17.5bn has been paid out for reparations to people and companies that suffered damage from Iraq's 1990 invasion of Kuwait.

There is plenty of anecdotal evidence that these reparations were vulnerable to abuse as well. Stories abound of Kuwaiti playboys claiming for new swimming pools and of companies that had already decided to pull out of the region claiming for lost profits.

Independent verification on the validity of claims is close to impossible. Once again, the identities of the beneficiaries and even the names of the UN officials who adjudicate on claims are confidential.

A spokesman for the Oil for Food programme insists that the scheme has been thoroughly audited and denies that the reparations programme has been abused.

"This is one of the most heavily audited programmes in the UN. There have been over 100 internal and external audits in the last five years and the programme reports regularly to the Security Council," he says.

Anyway, this weekend governments around the world are considering whether to back a draft resolution to the United Nations Security Council calling for the lifting of sanctions on Iraq. The United States presented the resolution 10 days ago.

The US ambassador to the UN said he hoped the resolution would be passed within two weeks and at the latest by June 3, when the current phase of the Oil for Food programme is due to expire.

But with the Russians and French still opposing the lifting of sanctions, which they see as legitimising the US-led war on Iraq, there is a strong prospect of the Oil for Food programme being extended - and the hope of the Iraqi people must be that the kickbacks have gone with the expulsion of the ancien regime.

Sunday Telegraph {Business}

www.telegraph.co.uk

INVESTORS BEWARE!!!

THEY HAVE NO MONEY
THEY HAVE NEVER DONE A DEAL IN THEIR LONG HISTORY
THEY NEVER WILL DO A DEAL
THE RECENT 450% RISE HAS BEEN FUELED BY RAMPERS AND MORE HOT AIR FROM THE COMPANY.
THEY HAVE CAUSED MISERY FOR MANY MANY HONSET HARWORKING PEOPLE OVER THE YEARS
LOOK AT THE LONG TERM CHART THEY WILL FALL BACK TO 3P AGAIN AS THEY DID BEFORE WHEN THE TRUTH CAME OUT

What's the latest news on this one?

Its flying !!!!

PEt has a long very hard history, but is the only UK oil explorer company allowed to work in IRAK.

Admit there will be security problem, but long term it would not be bad 20p is to undervalued, compared with other JKX, northern petroleum etc ... and Kirkuk, Bhasara, in Irak in general chance to find oil quite sure. Why are you against this stock?

This Company is ALL or Nothing.


Company Petrel Resources PLC
TIDM PET
Headline Trading Statement
Released 07:30 19 Feb 2004
Number 5876V

Update on Iraq activities

Petrel Resources the oil and gas exploration company, is shortly due to submit tenders to develop three oil fields in Iraq - Kirkuk, Hamrin and Subba / Luhais.


The Kirkuk tender to develop the Khurmala dome will be submitted by the end of March. This is a proposal to design, build and commission a 120,000 barrel daily facility. The reserves are proven, but there is no surface engineering on this dome. These are cash contracts, though a future sovereign government may convert them to risk-sharing arrangements.

The tender to develop the similarly sized Hamrin field in central Iraq will be submitted by April 15th. These reserves are also proven.

The updated tender for the Subba and Luhais joint field development of 120,000 barrels daily will be submitted by May 15th. There is surface engineering in place here, but it has been extensively damaged.

Petrel anticipates commencing a general Western Desert geological sampling programme as soon as weather conditions permit. Seismic interpretation, mapping and evaluating satellite imagery is ongoing.



The Company has also noted recent press speculation regarding oil trading contracts in Iraq and has received many enquiries from shareholders in recent days.



Petrels decision not to participate in the UN-administered oil for food programme between 1999 and 2002 has been fully vindicated. Short-term, one-off commissions were available and attractive at the time - each 2 million barrel oil trade could have produced commission of $600,000, a substantial sum to an explorer.



The Petrel board made a conscious decision to go for the main prize an Iraqi oil field, and this strategy remains in place.



Contacts:



Petrel Resources plc

David Horgan + 353 87 292 3500

Jim Finn + 353 86 258 1178

Redleaf Communications
Nick Lambert +44 (0) 7811 358 764



PETREL is an Oil Explorer in Iraq traded on the AIM market in London. Ticker symbol (PET)



www.petrelresources.com

END

How do I read the latest reports?

These have started moving up again. I havent found any news as yet. Could this be the big one? (As far as I know the situation in Iraq hasnt changed so is it contract related?)

I don't think so, the same happened last week and then it fell back down again, looking at other websites they were expecting an answer to their tender within two months, not two weeks.

Hi all you PET's Guys...a real gambling share this...in a few months you could be either stinking rich or stinking poor...if you like a gambling share then this one is probably about the most risky around at present but could make you loads of Dosh,...todays trend is good, so good luck to all of those of us who have got the bottle...