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Iraqi Parliament is very close to approving HCL September-October 2007.PET is expected to sign contracts immediately following passing of HCL.

barkerman - 27 Aug'07 - 16:48 - 94355 of 94363


Iraq leaders vow to boost national reconciliation
By Ammar Karim

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27 August 2007 (AFP)
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Iraq's fractious political leaders early Monday squeezed out an agreement to work together to resolve key disputes, amid growing pressure from US leaders for more progress in national reconciliation.

The accord was however unlikely to be enough to lure Sunni parties back to the government of Prime Minister Nuri al-Maliki or to satisfy US lawmakers increasingly impatient with his leadership, observers said.

The leaders agreed to ease restrictions on former members of Saddam Hussein's Baath party taking up government jobs, to hold provincial elections -- a key demand of Washington -- and help security forces in stopping the bloodshed, President Jalal Talabani's office said.

Iraqi political leaders have in the past announced broadbrush agreements but have battled to implement them or hammer out specifics.

The latest effort to pull Iraq back from the political brink comes amid intense pressure from American politicians and two weeks before leading US officials in Iraq -- ambassador Ryan Crocker and coalition forces chief General David Petraeus -- present a keenly awaited report to the US Congress.

It was swiftly welcomed by the White House, whose Iraq policy has faced mounting domestic opposition.

Embattled Prime Minister Maliki, a Shiite; Talabani, a Kurd; Sunni Vice President Tareq al-Hashemi; Shiite Vice President Adel Abdel Mahdi; and Massud Barzani, president of the semi-autonomous northern Kurdish region, made a rare television appearance after Talabani's office released the statement.

"After a series of meetings by political leaders in the circumstances that our country is passing through, they have decided to make serious efforts to find solutions to overcome the political and security crisis in Iraq," the statement said.

It said the five leaders had agreed to support a new bill to replace the four-year-old de-Baathification law and make it easier for former members of Saddam's Baath party to take up government or military jobs.

The return to public life of former Baathists who have no criminal records has been a strong demand of Iraq's main Sunni Arab political bloc, the National Concord Front, but the so-called Reconciliation and Accountability Law has yet to be approved by parliament.

The Front has boycotted Maliki's Shiite-led government since August 1, paralysing the country's political progress.

There was no indication on Monday that the Front was planning to end the boycott and Omar Abdul Sattar, a leader of Hashemi's Iraqi Islamic Party, dismissed the agreement as stage-managed.

"It was an irrelevant media production," Abdul Sattar told AFP.

The statement said that the Iraqi leaders had also agreed to encourage the sharing of government jobs equally among all three communities.

"The leaders agreed to hold provincial elections and to continue dialogue over other disputed issues such as constitutional reforms and the oil law," it added.

Washington has insisted that provincial elections and passage of the oil law are among the key cornerstones needed to achieve progress and reconciliation in Iraq.

The White House on Sunday hailed the pledges from the Iraqi leaders as "an important symbol" of their readiness to work on behalf of all Iraqis.

"We congratulate Iraq's leaders on the important agreement reached today in Baghdad. Today's agreement is an important symbol of their commitment to work together for the benefit of all Iraqis," it said.

Since the August 1 boycott by the Sunni Arab bloc, a growing number of US politicians have spoken out against Maliki, with some like presidential hopeful Hillary Clinton and Senator Carl Levin even calling for him to be replaced.

Last week, Clinton urged the Iraqi parliament to get rid of Maliki after Levin, the chairman of the Senate Armed Services Committee, said the premier should go after paying a visit to the country.

An angry Maliki lashed out at the two politicians on Sunday, just hours before the announcement of the latest reconciliation moves.

"They talk about Iraq as if Iraq is their property," Maliki told reporters.

They "have not experienced in their political lives the kind of differences we have in Iraq. When they give their judgment, they have no knowledge of what reconciliation means."

Maliki meanwhile won an apology from French Foreign Minister Bernard Kouchner over similar calls he made in an interview with US magazine Newsweek for a new Iraqi premier.

"If the prime minister wants me to excuse myself for having interfered in Iraqi affairs in such a direct way, then I do so willingly," Kouchner told France's RTL radio.


barkerman - 27 Aug'07 - 16:49 - 94356 of 94363

"The leaders agreed to hold provincial elections and to continue dialogue over other disputed issues such as constitutional reforms and the oil law," it added.

I will feel more comfortable with PET when they publish their full audited accounts for the year ended 31/12/06. Prelims showed shareholders funds of e7m+ market cap is over e80m. A lot has to go right to justify this rating.IMHO.

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Tks for the prompt reply. I would like you to explain why PET's position in Iraq is unique. I am sorry you do not consider their financial position of any importance. I sold my shares into the recent rise and will continue to monitor the position for future buying opportunities at lower levels.

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eolas - 25 Aug'07 - 09:48 - 93813 of 94654

I thought I'd share this email that I sent to some horse racing buddies of mine, some of whom I had already persuaded to buy into Pet. Most of them know little or nothing about the company or its prospects in Iraq. I sent this early Thursday morning, and as I put my thoughts down, it convinced to add another 40,000 shares to the significant number I already held, whe nthe market opened.

Guys
I was at the Petrel Resources AGM yesterday. Normally, when I send a note to this group it is to discuss the merits of a certain horse. Sticking with that theme, I think Petrel are an even money shot, that we can get 50/1 or 100/1 on, with a money back offer from our bookie.

I came away from the meeting that positive about it all. They believe that the HCL (Oil Law) will be passed in September. The Shia Alliance have a majority in Parliament. They will force the bill through if necessary, although they are trying to build consensus and get all groups, including the Sunnis, on board. Passing the HCL is the key to progress.

Their current EPC contract (Engineering, Procurement and supervision of Construction) on the Subba & Luhais ("S&L") field is progressing on plan. This is the largest contract awarded in the oil sector since the war. It is valued at $197 million. It is merely a contract to design oil field enhancements and procure equipment to upgrade the fields to boost production from under 50,000 barrels per day ("b/d") to 200,00 b/d. Therefore, this contract does not give them any revenue share in the oil, merely a service fee. However, it has been very useful in building their credibility with the Iraqis. This field is in the Shia heartland, near the Iranian border. The area is controlled by Shia militia, but is safe, if you have their co-operation, and they are linked to the Shia Alliance that is basically the government. Pet also have good ties in Iran, who have huge influence over the Shia group. They have about 80 people working on the project, mainly contractors. In addition, they have a JV with an Iraqi group called Makman, to provide labour and other resources when the 'build' phase begins. They have very good co-operation from the suppliers (including GE) who have been very helpful in terms of building, delivering and extending credit, as the current Iragi LOC system is difficult, and payments are slow.

They have also completed a Technical Cooperation Agreement ("TCA") on the Merjan field. This field has 760 million barrels of proven reserves, but actual reserves are likely to be in excess of 3 billion barrels. The field was discovered in 1983 but has never been developed. In a TCA they do a study of the field using modern 3D seismic and work with the Iragi Ministry of Oil, doing training and transfer of technology. This allows them to design a plan for the development of the field. In addition, it builds trust between the parties. They have now been asked to do, and have started work on another field called Dhafriya.

They are doing the TCA work, partnered by Itochu. Itochu is one of the biggest Japanese trading companies. It is the largest purchaser of crude oil in the Pacific. It has close ties to the Japanese government, who are very concerned about their dependence on oil imports. Itochu pay 50% of the cost of these studies and cover 50% of the overheads. They have a 60 day first option on all Petrel deals in Iraq. Basically, they have to confirm interest in a project within 30 days, and sign an agreement within 60 days, or else Pet can go elsewhere with the deal. The expectation is that Itochu will be actively involved in all Pet deals in Iraq. The Japanese government have offered cheap and freely available loans for re-construction in Iraq, and the expectation is that Pet will tap into this source for a lot of the development costs.

In the pre Saddam era, they were awarded an exploration agreement for Block 6 in the Western Desert. This is an area that has never been explored, but is likely to be very oil rich. Recent reports suggest that there could be over 100 billion barrels of oil in the Western Desert, and Block 6 is one of about 10 exploration blocks in that region. They have been assured by the Oil Ministry that their title to Block 6 will be ratified by the government, after the HCL is passed.

They were approached by someone at the very highest level (not sure if this is the President, Prime Minister or Oil Minister) to look at a field called Halfaya in the south (Shia area) near Iran. This is a super giant oil field with about 14 to 16 billion barrels of proven reserves, and a likely minimum recoverable reserve of 8 billion barrels. They have done a lot of work on this field. Basically, they believe that they have been approached for political reasons. The government are well aware that the big oil companies will be only too happy to sign contracts, and then will do nothing, until the security situation improves. The government needs to start generating more income now, to pay for reconstruction and other projects. They need people to work now. They see Petrel as a company that can do that, as demonstrated by the S&L project. In a couple of years time. the government would like to be able to use the Halfaya development as an example of what a western company can achieve, as a lever to get big oil working in the country.

The HCL is likely to allow for Production Sharing Agreements ("PSA"). They may not be called this, but in practice they will allow oil companies to get a share of the oil. The terms will allow for capital cost recovery (at a rate of 60% of oil until cost recovered) and thereafter they expect the oil company share to be in region of 15% to 20%. These terms are very favourable, and are likely to be reduced in the future. They expect that the early contracts will be at this rate, to reflect the political and security risks. Therefore, those who move early will get best terms. There is a risk that those contracts may be re-negotiated in the future, like Russia has done with the contracts that it signed in the early nineties.

The Halfaya field could cost up to $1 billion to develop. However, Itochu and Japanese loans will be the primary way of financing it. They will resist any major share placing, so there should not be too much dilution. Halfaya is expected to produce a minimum of 600,000 b/d and to produce for 30 years.

The numbers on Halfaya are truly staggering. I'll use an oil price of $70 per barrel, and a 20% PSA. Production costs in Iraq are about $1 per barrel which is the lowest in the world.

Annual Revenue 600,000 b/d * $70 * 20% * 365 days = 3.066 billion dollars or 1.5 billion pounds. At a forward PE of say 10, this would place a value on Halfaya of 15 billion. Maybe split this 50/50 with Itochu and you get 7.5 billion. Pet is capitalised at 64 million, so the share price would need to rise over 110 times to reflect my simple value on the Halfaya field. There will be share issues along the way so this will affect my calculation. Pet expect to get Block 6 ratified, which will be worth a lot, and hope to get PSA agreements on S&L and Merjan.

They have cash in the bank. David Horgan, the MD, is a very impressive guy. He is highly qualified (Cambridge law degree, Harvard MBA) and very personable. You may have seen the video of his appearance before the Iraqi Commission in the UK, and he is well used to dealing with politicians. Pet has strong local ties with many groups in Iraq, and has worked with 5 successive governments. They have got a PSA in Jordan (a Sunni country) and their sister company PNG works in Iran (Shia) and has many ventures there.

They plan to work initially in the South of Iraq, which is the most stable area. Merjan and Block 6 are in the Sunni heartland, where there is most trouble. It will be a while before any major work can be done there.

They have been told that the HCL will pass in September, and to be ready to travel to Baghdad at short notice to begin contract negotiations.

You can see where my 100/1 price been offered on an even money shot comes from. I cannot see how they will not get something in Iraq, which allied with the Jordan PSA should underpin the price (the money back offer from your friendly bookie). If they get a PSA on S&L (as they are doing the work on the field) or on Merjan or Dhafriya it would be worth a major share price hike. Block 6 likewise would have a major impact. Halfaya is the 100/1 shot.

I have never come across as good an opportunity. It has risk, as all share purchases do. Therefore, be cautious and only invest what you can afford to lose. I now have 850,000 shares and will continue to add, as and when funds permit.

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I post on the other side as well, however it is run by a number of individuals who cannot bear an alternative view to their own !!

I believe pet is in a unique position and the price will make many a lot of money.

However, I look at the broader picture and I believe that we have until just before the games next year before the economic picture could change dramatically.

The Chinese are sitting on trillions of US dollars - the Russians and the Chinese plus the Iranians will be successful in setting up an alternative oil market which will not be based on dollars.

These two factors will change the way we look at the world forever and believe me it will happen - but after the games.

So, beware and if as I hope Pet gets to quite a price before August - take the profit and wait for what will be the most dramatic correction world markets will have ever seen.

LEX....brill posting today @ 09.56 hrs mate..Any more shares and you will soon be a director of PET!!!!!
Seriously though can you confirm what mechanism you use to find out price on German Stock Exchange???

PINNACLES....found your mail interesting, however can you expand on your views in your latest mail...I am a little in dark on the issues you refer to ( ie Games/August/Alternative Oil Market)

cheers guys

Hatto - 28 Aug'07 - 10:46 - 94750 of 94774


I fully understand what fellow PIs are going through.

Excitement.....Fear......Hope......Panic......

And all in only three hours.

All the questions going on in our heads....

Should I buy more ?
Should I Sell ?
Will the Sp go up ?
Will it go down ?

All the thoughts.....I should have sold at 135p its 130p to sell now. Good job I didn't sell its 141p to buy now etc...etc...etc....

Personally I hate days like today, you feel you need to do something but in reality what you should do is just sit on your hands or better still get away from the bleedin' computer.