Ebenezer3
11 months ago
Kurdistan Oil Flows Not Expected to Resume Anytime Soon
By Simon Watkins - Feb 06, 2024, 5:00 PM CST
Perhaps no subject in the complex world of global oil involves so many intricate moving parts as the extraordinary relationship between the Federal Government of Iraq (FGI), based in Baghdad, and the government of Iraq's northern semi-autonomous region of Kurdistan (KRG), centred in Erbil. It is only when something such as the suspension of major flows of oil from Kurdistan to Turkey occurs, as began on 25 March 2023, that many analysts start trying to unravel what has caused it. And they find themselves entering an Alice In Wonderland world in which anything is possible, but nothing is as it seems. In this world, it is very easy to lose sight of the wood for the trees sometimes, and this appears to be what has happened in a letter sent by foreign oil firms in Kurdistan to the U.S. Congress asking for help in having the export oil embargo lifted.
Ironically, in fact, it is only towards the very end of the letter from the Association of the Petroleum Industry of Kurdistan (APIKUR) that the group, which largely comprises the oil interests of several foreign firms directly or indirectly, inadvertently hits on the precise reasons why a full, clear, and transparent lifting of the embargo is unlikely to happen soon, if ever. The letter highlights that the halt in exports that affects between 400,000-500,000 barrels per day (bpd) of oil from Iraqi Kurdistan must be lifted because it puts at risk over US$10 billion of U.S. and international investments in Kurdistan and because it is severely impacting the region's economy and stability at a time when regional tensions are already heightened. Bingo!
By keeping the West out of energy deals in Iraq - and closer to the new Iran-Saudi axis - the end of Western hegemony in the Middle East will become the decisive chapter in the West's final demise," said a very high-ranking Kremlin official at a meeting with senior government figures from Iran, just after the 10 March 2023 signing of the Iran-Saudi Arabia relationship resumption deal, brokered by China. The comment was exclusively relayed to OilPrice.com, just before the 25 March oil export embargo from Iraqi Kurdistan by a senior source who works closely with the European Union's energy security apparatus, and we passed it on to our esteemed readers. Nothing whatsoever has changed to modify the view of either the Iraqi central government in Baghdad, or the senior figures in Tehran, Moscow, and Beijing who are helping to implement the 'One Iraq Plan' as it is referred to behind closed doors. If anything, the rising uncertainty in the Middle East emanating from fears of a dramatic escalation in the Israel-Hamas War are serving to expedite key elements of the plan, with the U.S.'s focus on that War.
In essence, the bare mechanics of the 'One Iraq Plan', as broadly delineated by the senior Kremlin figure, are to cut off all sources of external revenue from the government of Iraqi Kurdistan - most significantly from independent oil sales by foreign companies operating there - before absorbing it into the rest of the country, under the sole rule of Baghdad, as analysed in depth in my new book on the new global oil market order. If that is understood, then everything that has subsequently happened in Iraq since the 10 March relationship resumption deal between Iran and Saudi Arabia makes perfect sense. The basic reason for this is that Iraqi Kurdistan has long been regarded by Russia, China, and Iran, as a key U.S. ally in the Middle East, and this will no longer be tolerated, which gives rise to two further choices.
The first is to give Iraqi Kurdistan its independence and sever all links between it and the rest of Iraq. This, though, is not an option on the table for three key reasons. One is that the main northern overland export route into Europe for all of Iraq runs through the Kurdistan region and into Turkey. The original Iraq-Turkey Pipeline (ITP) - controlled by the FGI in Baghdad - consisted of two pipes (a 40-inch one started up in 1977, and a 46-inch one started up in 1987), from the Kirkuk oil fields (also nominally owned by the FGI) on the border of the Iraqi Kurdistan to Ceyhan, which had a combined nameplate capacity of 1.6 million bpd. The FGI-controlled pipeline's export capacity reached between 250,000 and 400,000 bpd when running normally, although it was subject to regular sabotage by various militant groups. The Iraqi Kurdistan's KRG, in response to the regular attacks on the FGI pipeline, completed its own single-side track Taq field-Khurmala-Kirkuk/Ceyhan pipeline in the border town of Fishkhabur. This was part of its drive to raise oil exports above 1 million bpd. Clearly, Baghdad will never give these vital oil export links away.
By keeping the West out of energy deals in Iraq - and closer to the new Iran-Saudi axis - the end of Western hegemony in the Middle East will become the decisive chapter in the West's final demise," said a very high-ranking Kremlin official at a meeting with senior government figures from Iran, just after the 10 March 2023 signing of the Iran-Saudi Arabia relationship resumption deal, brokered by China. The comment was exclusively relayed to OilPrice.com, just before the 25 March oil export embargo from Iraqi Kurdistan by a senior source who works closely with the European Union's energy security apparatus, and we passed it on to our esteemed readers. Nothing whatsoever has changed to modify the view of either the Iraqi central government in Baghdad, or the senior figures in Tehran, Moscow, and Beijing who are helping to implement the 'One Iraq Plan' as it is referred to behind closed doors. If anything, the rising uncertainty in the Middle East emanating from fears of a dramatic escalation in the Israel-Hamas War are serving to expedite key elements of the plan, with the U.S.'s focus on that War.
In essence, the bare mechanics of the 'One Iraq Plan', as broadly delineated by the senior Kremlin figure, are to cut off all sources of external revenue from the government of Iraqi Kurdistan - most significantly from independent oil sales by foreign companies operating there - before absorbing it into the rest of the country, under the sole rule of Baghdad, as analysed in depth in my new book on the new global oil market order. If that is understood, then everything that has subsequently happened in Iraq since the 10 March relationship resumption deal between Iran and Saudi Arabia makes perfect sense. The basic reason for this is that Iraqi Kurdistan has long been regarded by Russia, China, and Iran, as a key U.S. ally in the Middle East, and this will no longer be tolerated, which gives rise to two further choices.
The first is to give Iraqi Kurdistan its independence and sever all links between it and the rest of Iraq. This, though, is not an option on the table for three key reasons. One is that the main northern overland export route into Europe for all of Iraq runs through the Kurdistan region and into Turkey. The original Iraq-Turkey Pipeline (ITP) - controlled by the FGI in Baghdad - consisted of two pipes (a 40-inch one started up in 1977, and a 46-inch one started up in 1987), from the Kirkuk oil fields (also nominally owned by the FGI) on the border of the Iraqi Kurdistan to Ceyhan, which had a combined nameplate capacity of 1.6 million bpd. The FGI-controlled pipeline's export capacity reached between 250,000 and 400,000 bpd when running normally, although it was subject to regular sabotage by various militant groups. The Iraqi Kurdistan's KRG, in response to the regular attacks on the FGI pipeline, completed its own single-side track Taq field-Khurmala-Kirkuk/Ceyhan pipeline in the border town of Fishkhabur. This was part of its drive to raise oil exports above 1 million bpd. Clearly, Baghdad will never give these vital oil export links away.
blessing of Iran, Russia, and China. That has not been given, so there is no reason to expect it to end in any sustainable fashion any time soon. Conversely, however, the move to destroy any last vestiges of Iraqi Kurdistan independence remain in full swing. A clear statement on 3 August last year from Iraq Prime Minister, Mohammed Al-Sudani, highlighted that the new intended unified oil law - run, in every way that matters, out of Baghdad - will govern all oil and gas production and investments in both Iraq and its autonomous Kurdistan region and will constitute "a strong factor for Iraq's unity". As the senior E.U. source reiterated exclusively to OilPrice.com last week: "Baghdad has no interest at all in agreeing to any of Turkey's terms or in Iraqi Kurdistan resuming its independent oil sales either." He concluded: "As Baghdad does not see an independent Kurdistan in the future of Iraq, it sees the best solution as keeping the independent oil sales stopped and the Kurds financially paralysed.
https://oilprice.com/Energy/Crude-Oil/Kurdistan-Oil-Flows-Not-Expected-to-Resume-Anytime-Soon.html#amp_tf=From%20%251%24s&aoh=17072686612191&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Foilprice.com%2FEnergy%2FCrude-Oil%2FKurdistan-Oil-Flows-Not-Expected-to-Resume-Anytime-Soon.html
Ebenezer3
11 months ago
https://www.newswire.ca/news-releases/shamaran-acquires-taqa-interest-in-atrush-and-partners-with-hkn-833907275.html
News Press Releases
ShaMaran Acquires TAQA Interest in Atrush and Partners with HKN
V.SNM | 4 days ago
VANCOUVER, BC, January 22, 2024 /CNW/ - ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSXV: SNM) (Nasdaq First North: SNM) has entered into definitive agreements for a two-step transaction to increase its indirect working interest in the Atrush Block in Kurdistan from 27.6% to 50%, with HKN EnergyIV, Ltd. ("HKNIV"), an affiliate of HKN Energy Ltd. ("HKN"), indirectly acquiring a 25% working interest and operatorship, subject to required approvals. View PDF
Garrett Soden, President and CEO of ShaMaran, commented: "This transaction continues ShaMaran's consolidation strategy in Kurdistan. We are acquiring TAQA's 47.4% interest in Atrush and selling a 25% interest and operatorship to HKNIV. ShaMaran and HKN are already co-venturers in the adjoining Sarsang block operated by HKN. We look forward to working together at Atrush to realize significant synergies on both blocks."
In the first step of the transaction, ShaMaran's wholly-owned Cayman subsidiary, General Exploration Partners, Inc. ("GEP"), entered into an agreement with TAQA International B.V. ("TIBV"), a subsidiary of Abu Dhabi National Energy Company PJSC ("TAQA"), to acquire TAQA Atrush B.V. ("TABV") ("Step 1"). TABV is a Dutch holding company with a 47.4% working interest and operatorship in the Atrush Production Sharing Contract in Kurdistan ("Atrush PSC"). Step 1 is subject to customary closing conditions for a share sale and purchase agreement in the Netherlands and customary stock exchange approvals in Canada.
At closing of Step 1, HKNIV will begin operating Atrush on a fee basis in contemplation of the second step of the transaction. The appointment of HKNIV as operator is subject to review by the Ministry of Natural Resources in Kurdistan.
In the second step of the transaction, TABV will transfer a 25% working interest in the Atrush PSC to GEP2, a new Cayman wholly-owned subsidiary of GEP. In parallel, GEP has entered into an agreement to sell GEP2 to HKNIV for nominal consideration such that HKN IV will hold a 25% working interest and operatorship in the Atrush PSC ("Step 2"). The sale of GEP2 to HKNIV will be subject to approval by the Kurdistan Regional Government ("KRG").
After closing the above transaction steps, the Atrush Block will have the following parties: GEP 50%, HKNIV (through GEP2) 25% and KRG 25%.
About ShaMaran Petroleum Corp.
ShaMaran is a Canadian independent oil and gas company focused on the Kurdistan region of Iraq. The Company indirectly holds an 18% working interest (22.5% paying interest) in the Sarsang Block, and, subject to closing the above transaction, will increase its indirect 27.6% working interest in the Atrush Block to 50%. The Company is listed in Toronto on TSX Venture Exchange and in Stockholm on Nasdaq First North Growth Market (ticker "SNM"). ShaMaran is part of the Lundin Group of Companies.
Important Information
ShaMaran is obliged to make this information public pursuant to the EU Market Abuse Regulation. This information was submitted for publication through the agency of the contact person set out below on January22, 2024, at 5:00a.m. Central European Time.
The Company's certified advisor on Nasdaq First North Growth Market is Arctic Securities AS (Swedish branch), +46844686100, certifiedadviser@arctic.com.
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or the Company's future performance, business prospects and opportunities, which are based on assumptions of management. There is no certainty that all conditions to completion in respect of Step 1 will be satisfied or that approval of the KRG for the sale of GEP2 to HKN IV will be obtained.
The use of any of the words "will", "expected", "planned" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of certain future events. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, including results, timing and costs of seismic, drilling and development related activity in the Company's area of operations and, uninsured risks, regulatory changes, defects in title, availability of funds required to participate in the development activities, or of financing on reasonable terms, availability of materials and equipment on satisfactory terms, outcome of commercial negotiations with government and other regulatory authorities, timeliness of government or other regulatory approvals, actual performance of facilities, availability of third-party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. The forward-looking information contained in this release is made as of the date hereof, and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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