http://www.gulfkeystone.com/ The firms exploration programme in Algeria is going well and "the shares look good value", say the Investors Chronicle. Your comments please. goal.

http://news.sky.com/story/1383271/ex-bp-boss-hayward-boosted-by-kurdish-payout

hxxp://basnews.com/en/economy/2014/12/01/krg-to-pay-three-oil-companies/.

KRG to Pay Three Oil Companies
DNO, Genel and Gulf Keystone will share $75m payout

Basnews | Luke Coleman views
01.12.2014 15:00

Kurds to pay three international oil companies


LONDON


Share prices in two London-listed companies and one listed in Oslo are expected to rise after news that Genel will report on Monday part-payment of contractor fees owed by the Kurdistan Regional Government.


Genel, founded by Tony Hayward the ex-boss of British Petroleum, has shown patience in the face of reduced payments by the KRG in recent months.


A combination of the costs involved in tackling the threat of Islamic State and poor relations between Baghdad and Erbil, resulting in the withholding of the KRG budget, are to blame.


In a statement earlier this month, Hayward said, “Exports will continue to rise and the KRG’s firm commitment to ensure contractors receive full entitlements will see a normalised payment process for this production early in 2015.”


Genel holds seven PSC licences, including in the highest producing KRI fields of Taq Taq and Tawke. It will announce a payment of $25 million.


Gulf Keystone, the other company listed on the London stock exchange, is in desperate need of the cash, as investors continue to express concern over its balance sheet. The company claims to be owed $250 million, and will disclose the amount it will receive later on Monday.


The third operator, DNO, also operates in the Tawke oil field, and will take the remaining share of the $75 million payout.

Gulf Keystone Petroleum Ltd. (LSE: GKP)

Payment made for Shaikan crude oil exports

Gulf Keystone Petroleum Limited ("Gulf Keystone" or the "Company") is pleased to announce that, further to the recent statement by the Ministry of Natural Resources (MNR) of the Kurdistan Regional Government (KRG) regarding payment to producers for crude oil exports, an initial payment of USD 15 million gross has been made to the Company.

Gulf Keystone now looks forward to the establishment of a pattern of regular payments for export crude sales. In the meantime, the Company continues to adopt a prudent approach to capital expenditure.

The statement made by the KRG's MNR on 7 November 2014 regarding the plan to make an initial payment to producers for exports, with further payments to follow on a regular basis, can be viewed at http://mnr.krg.org/index.php/en/press-releases/422-update-on-oil-export-from-the-kurdistan-region-of-iraq.

Commenting on today's news, John Gerstenlauer, Gulf Keystone's CEO, said.

"We welcome this initial payment of USD 15 million gross from the MNR for Shaikan export oil sales. It represents a major step forward for us and we are grateful to our partners in the KRG, who we resolutely stand beside. We continue to have constructive discussions with the KRG in relation to receiving payment in full for our oil sales.

Following our first anniversary of steady export sales, this initial payment is another important milestone in Gulf Keystone's history and further evidence of the Company's great momentum. With the creation of a regular payment cycle we look forward to being able to deliver further benefits to the people of Kurdistan, and all our stakeholders, as we consolidate our position as a key producer in the region from the world class Shaikan field."

Gulf Keystone Petroleum - Payment made for Shaikan crude oil exports

click here

http://rudaw.net/english/kurdistan/02122014

Great finish to the day,up 15%.
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Oil shares rise on Iraqi Kurdistan export deal
http://www.ft.com/fastft/244561/oil-shares-rise-on-iraqi-kurdistan-export-deal

An oil deal between the Baghdad government and the administration in Iraqi Kurdistan has boosted shares of oil companies operating in the north.

After months of disputes and halts to supplies, Iraq's finance minister, Hoshiyar Zebari, told the Reuters news agency that a deal had been done for the north to export 300,000 barrels of oil per day from Kirkuk and 250,000 from the north through Turkey.

Shares in London-listed Afren, which is operating in the Barda Rash field in the north, are up 11 per cent on the news at 50.76p and are top of the mid-cap FTSE 250 index.

Gulf Keystone Petroleum, which is in the Shaikan field, is up 10 per cent at 71.5p, Genel Energy, operating in the Miran and Bina Bawi fields, is 7.7 per cent higher at 690.3p, while Norway's DNO, which has an interest in several wells, is up 10 per cent at NKr17.35.

Here's an explanation from Exotix research on the source of the dispute:

The dispute between Baghdad and the KRG [Kurdistan Regional Government] rests on conflicting interpretations of the Iraq constitution implemented in 2006 with regard to oil-sharing agreements. The constitution is vague, but Baghdad believes that all oil should be marketed through Iraq's federal State Oil Marketing Organisation, with KRG receiving 17% of the revenues (proportionate to the population distribution). However, in practice Baghdad was paying Kurdistan only 12% until it stopped the revenue flows entirely in January this year, in protest at Erbil independently sending oil to Turkey without going through the Iraqi Oil Ministry. This followed increasing concern that Kurdistan breached the constitution by signing into law separate agreements with oil companies. The KRG maintains it has not breached its constitutional obligations and claims autonomy under the constitution to manage oil and gas in Kurdistan.

The FT's Borzou Daragahi says the Baghdad government is reported to have agreed to send the three-province Kurdistan Regional Government 17 per cent of Iraq's national budget in monthly stipends. In exchange, Kurdistan authorities in Erbil are to hand the central government 250,000 barrels of oil per day drawn from the self-ruled Kurdistan region and export 300,000 of oil per day drawn from northern fields near the city of Kirkuk through Turkey via a state-owned company.

"The Cabinet approves the oil agreement between the central government and Kurdistan," Iraqi Prime Minister Haider al-Abadi's official Facebook page declared. "Iraqi oil is the property of all Iraqis."

C&ped,todays usa presentation.
-----------------------------------------------
http://www.wsw.com/webcast/cowen20/gukyf/

Some notes I made form the presentation today. Most of it we've heard before but I say it's worth repeating.

Plateau for Shaikan will be 150-250k bopd
Shaikan has an oil column of 3000 feet and is a stack of seven independent reservoirs with their own GOR and API.
SH-10 will produce 10-12k bopd for PF-2
Due bottling of both PF-1 and 2 will take production over 40k bopd combined for these plants.
No paraffin in the oil.so even though it's is heavy oil it flows very well.
PF-3 CAPEX is $350m
PF-4 CAPEX is $320m
PF-3 will be funded from the money owed to GKP by the Kurds $250m) plus another $100m
Matrix is fractured carbonate. 7m produced so far most from SH-1 and 3. Shut in has happened several times and the wells recover back to their production numbers and pressure prior to shut in.
SH-1 and 3 are phenomenal wells.
$15m a month from KRG is "right on the edge" for being "comfortable". This amount to continue until March.
23k bopd is worth $15m and 40k is worth $24m - (seem familiar to me!)
CAPEX so far for Shaikan alone is $750m
Kurds at 310k bopd at the moment, soon will be 500k bopd. Break even at current oil price,is 450k bopd. I'll repeat that. 450k is Kurds break even given current oil price.

Fin.

http://www.turkishweekly.net/news/176545/iraqi-and-kurdish-officials-agree-over-oil-and-budget.html

From the Times.


The Kurds and Baghdad have finally ended their bitter feud over how to share Iraq’s oil revenues, sending shares in London-listed Kurdish oil explorers soaring.
After more than five years of squabbling, the two sides have struck an agreement guaranteeing that oil producers in the Kurdish semi-autonomous region of Iraq will be paid in full.
Shares in Genel Energy, the explorer set up by Tony Hayward, the former chief executive of BP, rose by nearly 10 per cent, and Gulf Keystone’s stock closed up by 15 per cent.
Hoshiyar Zebari, the finance minister of Iraq, described the deal as a “win-win” for Baghdad and the Kurdish Regional Government.
Baghdad has agreed to allow the Kurds to export 300,000 barrels a day from Kirkuk, the northern city, and another 250,000 barrels a day from the northern Kurdish region through Turkey. In return, the Kurds will receive a 17 per cent share of Iraq’s national budget every month.

BAGHDAD--The Iraqi government agreed Tuesday to an oil export deal with the northern region of Kurdistan, signaling an end to a yearslong political impasse that has nearly bankrupted both governments and hobbled efforts to fight the Islamic State insurgency.

The broad deal would allow Baghdad and Erbil, the capital of the Kurdish Regional Government or KRG, to mend broken relations that have put the defense of the country against Islamic State on shaky ground. The accord is also likely to further muffle voices in Iraqi Kurdistan that only six months ago had called for a referendum on the region's independence from Baghdad.

"This agreement represents a victory for all Iraqis," said Masoud Haidar, a Kurdish member of the parliament in Baghdad. "There are no losers in this agreement. All are winners."

Obama administration officials hailed the oil agreement Tuesday as a crucial advance in Baghdad's efforts to improve relations with Iraq's Kurdish minority.

U.S. officials have pressed Iraqi Prime Minister Haider al-Abadi, a Shiite politician who took office in September, to build bridges to his country's Kurdish and Sunni population and buttress the war against Islamic State militants. The Kurdish security forces, the Peshmerga, are close ally of the Pentagon in the fight against Islamic State, which is also known as ISIS or ISIL.

U.S. officials have also been working to ensure the KRG doesn't move forward with its threats to hold a referendum on independence.

"This resolution, in line with its constitution, allows all Iraqis to benefit equitably from Iraq's hydrocarbon sector," said Marie Harf, a State Department spokeswoman. "This agreement will further strengthen both Iraq's federal government and the Kurdistan Regional Government as they work together to defeat ISIL."

Under the new agreement, which comes into effect on Jan. 1, Kurdistan will export 250,000 barrels of oil a day and the disputed province of Kirkuk--now under Kurdish control--will export 300,000 barrels a day, said Abdel Qadr Mohammed, a Kurdish member of the Iraqi parliament's finance committee, who participated in the negotiations.

Those exports will flow through Iraq's national oil company, the State Organization for Marketing of Oil, or SOMO, marking a win for Iraq's central government, which has long sought to exercise more control over Kurdish oil exports and revenue.

In return, Tuesday's compromise would see the KRG keep 17% of Iraq's budget expenditure, nearly a year after Baghdad halted payments to the region in retaliation for its moves to sell Kurdish oil on the global market independently of Baghdad.

That percentage, based on estimates of Kurds" share of Iraq's total population, reflects the fiscal arrangement laid out in the 2005 constitution. By hewing closely to those parameters, established under U.S. occupation, the agreement showed that Iraq's worst security crisis in recent memory has helped shift the country toward a renewed unity.

"With the threat of ISIS bearing down on all of us, it was necessary for both sides to come to an agreement in any way," said Razaq al Haidari, a Shiite politician from the ruling State of Law bloc.

Though the deal is largely about oil, observers agreed that concern over the insurgency made it possible.

"This is an oil deal that is motivated by security conditions and the need for some sort of political unity against ISIS," said Ahmed Ali, a researcher for the Washington-based Institute for the Study of War. "At the end of the day, the realization on both side is that the ISIS threat is so great that a unified front is the major recipe to defeating it."

The deal satisfies many of the Kurds" outstanding demands, giving them profits from what they consider their own oil, a greater say in how Iraq's oil industry is administered, and additional funding and recognition for their semiautonomous defense forces.

The settlement also marks Baghdad's most formal step toward recognizing the disputed province of Kirkuk as a formal part of Kurdistan since Kurdish forces effectively seized the area during Islamic State's initial blitz in June. By positioning Kirkuk's oil as a part of Tuesday's agreement, Baghdad tacitly forfeited its control over Kirkuk's oil to Erbil.

In addition to Baghdad according a portion of Iraq's budget to Kurdistan, the deal calls for the Iraqi defense ministry to give a direct monthly payment to Kurdish fighters, known as the Peshmerga, to train and arm them in their fight against Islamic State, said Kawa Mahmoud Mawloud, a Kurdish member of the oil and gas committee in parliament.

Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad.

The deal isn't a wholesale solution to Iraq's fractured national polity. Governance in Baghdad has long been paralyzed by divisions among Sunni Arabs, Shiite Arabs, Kurds and a many smaller religious and ethnic groups. But the agreement demonstrates the unifying potential of Mr. Abadi. With support from Washington, he assumed the premiership in September followed the eight-year rule of Nouri al-Maliki, whose leadership was marked by sectarian and ethnic discord, corruption and worsening security.

Tuesday's deal had seemed almost impossible until last month.

The long-simmering dispute came to a head early this year after Baghdad cut off budget payments to the KRG, which began exporting large volumes of oil for the first time via a pipeline to Turkey.

Efforts by U.S. diplomats to broker a compromise fell apart amid mutual distrust, with both sides unable to agree on who should control the oil's marketing and revenue.

Kurdistan-focused oil stocks have languished this year as the political tensions with Baghdad left the KRG struggling to meet its payment obligations and the Islamic insurgency buffeting the country threatened operational security.

Oil markets saw the first glimmer of a deal three weeks ago, when Mr. Abadi and Kurdish delegates--supported by American and regional diplomats--agreed to an interim deal that saw Baghdad pay $500 million to the Kurds in exchange for 150,000 barrels a day of oil.

The good-faith payments opened a floodgate of concessions, said Mr. Haidari, the Shiite lawmaker. Kurds dropped their demands for huge payments from Baghdad, while Baghdad stopped its requests to micromanage Kurdish contracts with foreign oil firms, he said.

Shares in Kurdish-focused exploration and production companies such as Genel Energy PLC and Gulf Keystone Petroleum Ltd. surged Tuesday on news of the deal and after the KRG made initial payments to some companies for oil exports.

Though good news for Iraqi unity, the deal is likely to add to the downward tailspin in the oil market, with the additional barrels from Kirkuk set to augment the already ample supply on the market.

Oil prices have tanked since June amid sluggish demand growth and a boom in oil production in North America, but major oil producers in the Organization of the Petroleum Exporting Countries have shown little sign that they intend to pull back their own output to support prices.

When OPEC met in Vienna last week the group decided to keep its oil production unchanged, sparking a rout in the oil market. Iraq, the group's second-largest producer after Saudi Arabia, imade it clear it wouldn't consider reducing its oil output, which remains below levels reached in the 1970s before Saddam Hussein came to power.

Iraq's oil minister Adel Abdul-Mehdi told reporters in Vienna last week that Iraq is targeting production of around 3.8 million barrels a day next year, an increase of around 500,000 barrels a day compared with its production in October, according to the International Energy Agency. Oil exports from the Turkish port of Ceyhan via Iraqi Kurdistan have already reached over 350,000 barrels a day, according to Genel Energy, but the deal with Baghdad should boost that figure by 200,000 barrels a day come January.

Jay Solomon contributed to this article

http://www.reuters.com/article/2014/12/03/us-mideast-crisis-kurdistan-specialrepor-idUSKCN0JH18720141203

Well i topped up on this dip,with 40,000bopd(75%increase) due in the next three weeks ifeel the risk is lower now than for many a month?

Just my luck, i missed a brokers note 60/120p,although most oilers have taken a hammering at the minute.

http://rudaw.net/english/kurdistan/05122014



'According to Barzani, the Iraqi government has also admitted that it owes the Kurdistan Region 16 trillion dinars, and expenses incurred by foreign oil companies operating in the region.'

Really. Well it's out there now in the public domain....

Whoooo hoooooo!

that's about $13billion if US trillion

The Times

Admittedly, there were more pressing events in oil this week, such as the continuing deterioration in the price, the resulting collapse of the rouble and some daft idea that Royal Dutch Shell might buy BP, but events in the oil-rich Kurdish province of Iraq seem to have been overlooked.
There are four quoted UK companies there. The problem has been getting the oil to the outside world and getting paid for it. The first is well under way; the second logjam appears to have been unblocked.
There were two linked pieces of news. In November, the Kurdish regional government in Erbil, in a largely symbolic gesture, said that it would make a first payment to producers, with further regular sums to come in the new year. This was designed to reassure them, as the province’s oil industry ramps up and capacity in the pipeline into Turkey increases, that further investment would be rewarded.
This week that first payment arrived, $15 million for Gulf Keystone Petroleum for its Shaikan field and $24 million to Genel Energy for its Taq Taq and Tawke fields. Simultaneously, Erbil and Baghdad agreed on a deal to share the country’s oil revenues.
Baghdad would get the revenue from 300,000 barrels a day (bpd) from the Kirkuk field and another 250,000 bpd of Kurdish oil, all exported through the pipeline. Erbil gets a 17 per cent share of the national budget and can keep revenues from however much more it can sell. Total production from the province could hit 500,000 bpd next year.
In the background is the war between both and the Islamic State — as one commentator put it: “There is nothing like a common enemy to get people to settle their disagreements.”
Shares in Gulf Keystone and Genel jumped after the news. The two others are much smaller players. Petroceltic has interests in two blocks, but these are still at the exploration stage. Afren, better known for its African operations, has interests in two fields, including Barda Rash, but production is limited, averaging about 500 bpd in the first half of 2014.
For Gulf Keystone, the breaking of the deadlock allows it to push ahead with its Shaikan field. Production is running at about 40,000 bpd and is taken in lorries north to the town of Fishkhabur on the Turkish border. There are plans to link with the pipeline, perhaps in 2016; the oil from Shaikan is heavy crude and is likely to need some processing.
Shaikan should be producing at 100,000 bpd within a couple of years, but the field will need hefty investment. Some analysts believe that Gulf Keystone will have to raise fresh funds on the stock market. The alternative is bringing in a partner or even an outright bid.
This has been made easier by the Erbil-Baghdad agreement, because big oil companies already operating in the south of the country will be able to take a position in the Kurdish region. One might question, on glancing at the oil price, whether they are in the mood to buy assets.
DNO, the Norwegian company, is also producing in Kurdish Iraq. The biggest British player is Genel. Its cost of production is startlingly cheap, less than $2 a barrel. Genel, where Tony Hayward, the former BP boss, is chief executive, has the most to gain from recent developments. Its oil is high-grade light crude. It is producing, from the two fields, about 250,000 bpd and is owed $180 million for the oil it has exported already. The company has a market capitalisation of £1.7 billion, which would put it in the FTSE 250 index and mean that index-tracking funds would have to invest.
However, because Kurdish Iraq has not hitherto been recognised by Baghdad, the UK Listing Authority has said that the degree of political risk this raises precludes this. The outbreak of amity between Iraq and its breakaway province means this will probably happen in the new year. Genel has set three pre-conditions for a return of excess capital to shareholders. Once payments come through regularly, all three will have been achieved. That return looks likely next year . . . and one day M&A activity will return to the sector.

htTp://www.malcysblog.com/#sthash.Ew4dZ1vY.dpuf



Oil price
The oil market fell yesterday on the news that I mentioned about Saudi pricing for January liftings, the interesting thing about about it was that it only fell less than a dollar, indicating that the market has already adopted a tolerance to such news. Reuters is reporting this morning that at least $150bn of oil and gas projects due to be authorised for next year have already been put on hold, if true this is the start of the cycle which will lead to higher prices further down the road, the oil industry can never be accused of not being short termist or predictable eh?

Copied.
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http://www.cftc.gov/dea/options/petroleum_sof.htm

Positions aa 2 Dec.

067651 crude oil on the NYME

Contracts on the shortside up 21k not far off double the Long. Overall positions still weighted quite heavily to the shortside.
The price has drifted slightly south since the 2nd and with no major volume days. Would not appear that there's been a shift in this stance at this point.

Seeing also the feeble rebound in the price it does appear that sub $60 is on the way unless we see some geo-politic crisis emerge. $58.50 would be my short term target.

It will be interesting to see how gkp/genl respond If at all although the latter is probably more sensitive to Po0 fluctuations. So far in the last few weeks the more significant news has been payments and krg/icg agreements.

Hedge positions changing on oil.


http://www.bloomberg.com/news/2014-12-08/hedge-funds-betting-that-opec-led-oil-rout-is-near-end.html

.

Don't understand the article cyril ,says GKP was 95p yesterday ?

Edit , i see the article is from last summer .