What the Management HAVE actually said, to be read in addition to Official AGM statement issued under AIM rules.

mclellan - 2 Sep'07 - 17:19 - 97094
Just to remind people of some of the AGM remarks (from a FYB poster, Scoby):

Todays AGM

Initial formalities were dealt with briskly by a very chirpy JT (sounding as if he had a couple of Buck Fizzes with his breakfast). All motions were passed.

Proceedings were then handed over to DH for his presentation.

DH went through the presentation fairly quickly, pointing out that it was on the website, and any real elaboration would be better teased out during the follow on questions.

My own question first up was which of the items in the pipeline was likely to be realized first ?


In his reply DH gave an unequivocal answer..Block 6 title formally established and then proceeded to give a tour de force example of why we are invested in this Co.

His appreciation of, and sympathy for, the Arab way of doing things is unmatched.

Summary of points covered:

Iraq: Their objectives can be couched in 3 ologies

1) Technology

2) Productology

3) Deepology (I must remember these for my next game of scrabble)

1) Iraqs oil industry until the 80s was effectively run by BP. They sent their best people there and they produced some very good data on surface mapping. Main conclusions then were

Very big structures

Highest hit rate

Flat terrain

Since then their technology has stood still. Unless they get an injection of new technology the current production levels are set to fall (DH) It is this lack of technology that gives rise to the need for PSA type contracts.

2) Iraq needs production immediately. Pets advantage is they are ready to work right now. Majors would sign agreements of course ..in Amman, Dubai etc., but will not put their personnel in Iraq for several years. DH sees Pet being made into a particularly useful element in the Iraq negotiations with majors. If a small Irish Co. can work using the same world class suppliers as you, why cant you start now?

3) Virtually no deep horizons have been explored compared to say Saudi Arabia where many of the big finds are in deep horizons

DH: Forget the Arctic, forget Saudi Arabia etc,..nowhere else comes close to Iraq as a HC area

Working with Arabs:

Expect delays especially in such admin areas as Insurance, Banking etc. Iraq does not have highly developed financial services functions as we understand them, but they are getting there.

Expect haggle. It is part of the psyche.

Build relationships.



The HC Law:

Ignore the naysayers. This law is excellent, state of the art (DH).

The only changes that have been effected to date are minor, mainly grammatical

The Shia alliance is over 50% and can force the law through in September if necessary. Recent delays are down to the laudable efforts to get consensus.

20% share to the operator with 60 % Cost Oil (ie 60 % of early production can be allocated to operator until costs are recovered before normal terms kick in)

DH feels these terms may be restricted some years down the line (as has been done e g in Russia) when initial production objectives have been met.

When law is passed:

Pet have been asked to be ready to go to Baghdad to

a) confirm title to Block 6

b) negotiate development of a field in south Iraq (I presumed meant S&L but never thought to ask! He subsequently mentioned Drifiya (?) which I had never heard of)

The Iraqis have already asked Pet to look at Halfaya. Est. 14b barrels in place. IOM estimate 4b can be recovered. Itochu believe 8 to 10b recovery is possible! This is a giant.

There is an existing pipeline structure relatively close by.

Being near to Iran, it is bad for the big cos, but good for Pet.

S&L

Still proceeding on schedule. Where necessary external personnel who need to visit are met at the airport in Basra by the local militia and escorted to and from the site !



Itochu

Like all major Japanese cos they follow a Govt. sponsored strategy. As such they are extremely dependable. An ideal sugar daddy

When meeting with Iraqi officials they are treated as background support. All formal negotiations are channeled through Pet who are clearly seen as the operator.

Itochu are the biggest buyer of crude in the Pacific.

Their agreement gives them 60 days to look at and agree any project if Pet require a partner.

The can also make cheap debt finance available.

Jordan:

Why the delay in formalising the PSA?

Mainly due to Sonoran difficulties. They had a bad local press and it took 18 months to clear investigations etc. Pet took 3 weeks and had no hostile comment. The Jordan parliament finally put 3 PSAs through together.



Other points:

Overall Pet now have upwards of 80 people working for them, and many are highly qualified and experienced.

PR: Iraqis are not good at this, hence Pet have been asked to appear on BBC and Al-Jazeera

In general British papers dont write about any cos less than 100m market cap., but Pet have received quite a few mentions.

Takeover?: It is Pets intention to become an independent Iraq focussed producer. Nevertheless more and more blue chip companies can be expected to invest after the HC law is ratified.

Overall Impression: I have never seen the board members look so supremely confident and bullish . It is also clear that DH is a highly articulate and knowledgeable asset.

Out of curiosity how many other BBs are you copying and pasting to Lex?

If it keeps going up, good luck and well done, I remain unconvinced, my choice.

ptholden,originally posted MoneyAM PET @ 66p.Post thoughts & copy stuff on here from advfn.for those who may want to read it.Invested and put money where my mouth is.Core holdings returning profits of 147%.Some investors taking profits end of last week. As PET market cap increases,HCL draws nearer,PET attracting more resource investors.Holding firm and long.My choice.Good luck with your short.regards.lex;o)

http://www.iht.com/articles/ap/2007/09/02/business/ME-GEN-Dubai-Iraq-Energy.php

September 2, 2007
Lack of legal framework keeps oil investors out of Iraq

DUBAI, United Arab Emirates: Iraqi government officials and energy experts presented detailed plans for exploiting the wartorn country's vast petroleum wealth but admitted that the absence of a law regulating the industry is a bigger obstacle than security to attracting foreign investment.

Government officials at the three-day "Iraq Oil, Gas, Petrochemicals and Electricity Summit" held in Dubai tempered their grandiose projects for exploiting the country's massive oil reserves by admitting that the vital, but contentious, law still needed to be passed.

"Security is not stopping investors coming to Iraq, (it is because) they have no laws to protect their investment," Ali al-Dabbagh, the Iraqi government spokesman, told the Associated Press at the start of the conference.

After months of acrimonious debate, a new draft oil law will be discussed in parliament in the coming weeks, which al-Dabbagh hoped would be adopted by the end of the month.

"The majority of politicians are aware that we cannot go on without it," he said. "The oil law is the future of Iraq."

Despite being some of the largest in the world, Iraq's oil reserves are also some of the least exploited with the worst infrastructure something Iraq is hoping foreign investors can change.

Talks have been held with Shell, Texaco and Dow Chemical companies on possible investments in various proposed projects, said Fawzi al-Hariri, Iraq's Minister of Industry and Minerals. He said the Saudi Basic Industries Corporation has also expressed interest.

Al-Hariri hoped that the negotiations would be concluded by the end of the year.

He described a plan for a US$120 million (87.56 million) upgrade of a Basra petrochemical plant, that could be developed further with another US$1 billion (0.75 billion).

"We are also considering a second, completely new facility, maybe in the north or central region," he told Dow Jones Newswires at the conference, putting the cost at over US$2 billion (1.5 billion).

He said that the plant's final location would depend on the security situation.

Even more than new projects, however, it is the country's creaking oil infrastructure that has to be fixed, preferably with foreign investment, said Thamir Ghadban, chairman of Iraq Oil Commission.

Several times over the last three decades, complete overhauls were planned only to be shelved as the country was wracked by devastating wars and then U.N. sanctions.

"We think Iraq needs to bring up the oil production, but it also needs to go into oil exploration," Ghadban said, adding that the government plans to "convert 25 to 30 percent of probable reserves into proven reserves. "

If it succeeds, Iraq could raise production to 6 million of barrels of oil a day, up from an average of around 2 million barrels.

"Four million with national efforts and additional two million in cooperation with foreign oil companies," Ghadban said.

The country's former oil minister, Ibrahim Bahr al-Olom, called for additional domestic involvement in the sector as well, stressing the need for a "balance between national and foreign investment."

"Iraqis deserve a better standard of living," al-Olom said. "The only way they will get it, is by developing oil and gas resources."

the market is now trying to determine the implications of the British withdrawal from Basra ....... i am sure that at best it will herald a new wave of massive violence in iraq ...... does this move also bring even closer the spectre of all-out civil war?

Cynic,have previously read a quote by David Horgan saying better if forces not in Iraq.I will try and dig quote from the archives.PET working quite happily,no trouble where PET is South border with Iran.

Shorters have moved in and some stops have been triggered this morning.Well done those calling sp down.I do not have stop loss on PET.Holding.aimvho.

Peetle - 3 Sep'07 - 09:40 - 97407 of 97419


I'm still holding. Well done to anyone who took their profits on Friday, but I know that if I had I'd now be wondering about getting back in again.

How long before we see stories like this, though involving PET and Block 6, Halfaya, etc ? I'll post the effects on the Addax Share price if anyone's interested (it'll not be until after 2pm though)

DUBAI, Sept 2 (Reuters) - Addax Petroleum and Genel Enerji expect to submit a $1 billion development plan within weeks to Iraq's Kurdish region for their joint venture TTopco's Taq Taq oilfield, a TTopco executive said Sunday.
Output from the field could hit 200,000 barrels per day (bpd) by 2010, Les Blair, General Manager of TTopco, told Reuters.
"The production plateau is up to 200,000 bpd," Blair said. "In the coming weeks we'll submit the field development plan. Investment would be approximately $1 billion."
The plan will go to Iraq's semi-autonomous Kurdish Regional Government (KRG) for approval. The blueprint requires access to an export route for the oil as output would exceed local demand, Blair said.
In May 2006, Swiss-based Addax and Turkey's Genel Enerji signed a 25-year production sharing agreement (PSA) with the KRG for Taq Taq.
The oilfield is 60 kms north of the giant Kirkuk oilfield in Iraq, which has been plagued by a brutal insurgency since a U.S.-led invasion in March 2003.
But the Kurdish region has been relatively stable and the government -- hungry for development -- has encouraged operators such as TTopco to begin work.
The KRG plans to boost output to one million bpd in about five years from just a few thousand bpd now. It has inked five PSAs and has said it has more deals ready to sign.
The region had put new deals on hold while it waited for Baghdad to pass a controversial new federal oil law which stipulates who controls the world's third largest oil reserves and how revenue is distributed.
Washington has pushed Iraq for months to speed up its passage and that of other legislation, which it sees as pivotal to reconciling warring Iraqis, rebuilding Iraq's shattered economy and attracting foreign investment.
After months of waiting for Baghdad, the KRG passed its own oil law in August.
The KRG says the PSAs that it has already signed were in line with the constitution and the new oil law. The KRG and Baghdad have clashed over the contracts, and the KRG has said it will review them to ensure their harmony with new laws.
The passing of the oil law was also expected to herald an agreement on export routes for crude from the Kurdish region.
The central government has yet to give the nod to Norwegian operator DNO to hook its oil output from the Tawke field in the Kurdish region into Iraq's main export pipeline to Turkey.
DNO has already built a link from the Tawke field to the export pipeline. Output from Tawke is limited while DNO awaits permission to export, and the company has been delivering crude to local markets in trucks.
ENDS

lex ..... any chance you could summarise your posts? ...... i'm afarid i have so few grey cells left that it would exhaust them if i tried to read all the stuff you post, fascinating thought it may be!

Cynic,precis is in opening sentence! lol

How long before we see stories like this, though involving PET and Block 6, Halfaya, etc ? I'll post the effects on the Addax Share price if anyone's interested (it'll not be until after 2pm though)

We won't, because PET does not do business with regional authorities, PET has always worked closely with The Ministry of Oil in Baghdad, the reason being it greatly simplifies operations and minimises risk.
2517

2517GEORGE,Point being made involves PET being awarded & signign contracts and Block 6, Halfaya, etc PET have been very astute and have avoided getting involved in politics.

Eh?
2517

With relative calm in the sp as I write, albeit 11.59% down, it is time for people thinking of investing in PET to decide, have the fundamentals changed? The withdrawal of the army in Basra appears to have affected the sp this morning, and after it's terrific rise over recent weeks an ideal excuse for profit taking, but did we think the army would stay forever? The Iraqi Government must be left to run their country as they wish. Yes cynic may well be right in his 'i am sure that at best it will herald a new wave of massive violence in iraq' but I am sure the army will not wash it's hands completely if it were seen the Iraqis' in Basra were not coping. The situation with the HCL is unchanged as is the prospects for contracts, and the oil is still there waiting to be tapped. All imo of course.
2517

that's quite a brave statement young George and Lex is being very naive if he thinks that PET "have avoided getting involved in politics" ...... oil IS political, and any company connected with it will inevitably be involved ..... it follows that all is most definitely NOT plain sailing, though that does not mean that all will not come out well - eventually

Don't panic, Tony Blair said the world is a much safer place without Saddam. Unless you live in parts of Liverpool , Manchester and London ect: and you don't stay out after 11pm in most city centres on a friday night. Sorry went a bit off topic there.

5,000 soldiers re-locate to the airfield in basra..and wait to see 'when' the bad boys start to mark their turfs out..if it gets to voilent they will appear again..we have the best fighting force on the planet..so s.p. shaken today and MM's make some cash..contracts still need to be addressed by government..no change on that issue..good to see debate still healthy here

watcher

Nearly time for me to go back in as now below my previous exit price. Not sure Bush's visit helps at this stage especially if he wants to give Iran a bloody nose? Brits looking to get out asap reminds me of Aden in 1967.

PET is nose-diving because the Brits are getting out of Iraq...not good news for PET.

result of several things, including the "too far too fast" syndrome

well i did say it looks like a spike...