The Kurdish Crush

The Kurdistan producers are in a tough spot brought about by COVID-19 and the collapse in oil prices. Earlier this year, the KRG said it would delay payments in respect of October 2019 to February 2020 deliveries as its cash to pay producers was stuck in a Lebanese bank account with the bank itself facing liquidity issues. The KRG had struck a deal to pay producers for the backlog later in 2020. Payments in respect sales from March 2020 were...

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Genel grows in Kurdistan

Genel is acquiring interests in the Chevron operated Sarta and Qara Dagh blocks. Genel will acquire a 30% interest in Sarta and will pay 50% of the field development costs until a specific production target is reached; there will also be a production milestone contingent payment – total spend by Genel is estimated at USD60 million. Chevron will retain a 50% interest and the KRG holds the remaining 2% interest which is carried by the oil companies....

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All Tawke on Peshkabir: Is Tawke production declining?

The Tawke PSC encompasses the Tawke and Peshkabir fields. In 2017, operator DNO commenced production at Peshkabir and in 2018, drilled the Peshkabir-4 and -5 wells taking production up to 30-35mbopd. However, the limited disclosure by DNO means it is difficult to break out the production on the Tawke PSC between the Tawke and Peshkabir fields. Based on various disclosures between DNO and partner Genel, it appears that production at Tawke is declining,...

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Kurdistan E&Ps get paid for January sales

Genel has announced that the Tawke and Taq Taq partners have received payment from the KRG for January oil sales. The Tawke partners (DNO 75% and Genel 25%) have received USD56 million and will also share in a USD13 million overriding payment The Taq Taq partners partners received USD8 million this month The continuing payments by the KRG is constructive for sentiment and critical in bringing interest and investment back into the region. Many E&Ps have held off investing in the country with payments being a big concern. While the continuing...

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Kurdistan players receive payment for November exports

Genel Energy and DNO have received payment from the KRG for November oil sales. DNO received USD54.73 million for crude oil deliveries to the export market from the Tawke. The funds will be shared by DNO and Genel pro-rata to the companies' interests in the licence (75% DNO/25% Genel). Separately, a payment of USD4.7 million was received by DNO, representing 3% of gross Tawke licence revenues during November, as provided for under receivables settlement agreement from August 2017. The Taq Taq partners have received a gross payment of USD11.05...

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Kurdistan payments and new oil sales agreements

Kurdistan producers receive payment for October sales Gulf Keystone signs new oil sales agreement with the KRG DNO has reported a payment of USD54 million for Tawke production from the Kurdistan Regional Government. This is in respect of October oil deliveries. The payment will be shared between the licence partners WHO 75% and Genel 25%. Although there is a lag in payments between production and receipt, this is viewed as normal with October sales invoiced in November and approval by the Government in December with payment the following month....

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Kurdistan producers get paid for September

DNO and Genel Energy have reported receipt of USD54 million from the KRG for September crude sales from the Tawke licence - shared by DNO (USD40.7 million) and Genel (USD13.6 million) in line with the interests in the licence. In addition, a payment of USD10.8 million has been received by Genel and DNO, representing 7.5% of gross Tawke licence revenues during October 2017, as provided for under the receivables settlement agreement. Separately, the Taq Taq field partners have received a payment of $9.7m from the KRG for September oil sales - Genel's...

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Kurdish operators receive July crude export payments

Kurdish operators have announced receipt of oil sales payments from the KRG today towards July exports: DNO has confirmed that the Tawke partners have received USD39.5 million Genel has confirmed that the Taq Taq partners have received and USD10.4 million These payments are in line with recent payments and should be the last under the "old" system (i.e. before the recent change in terms in exchange for settlement fo historical receivables). Payment for August sales should be made in November - these should increase with DNO's greater share in...

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Kurdistan E&Ps have been paid for May shipments

Kurdistan E&Ps have been paid for May shipments. The Tawke partners have confirmed receipt of USD39.6 million. The amounts will be shared pro-rata by DNO (55%) and Genel (25% WI) and comprises USD33.2 million towards May deliveries and USD6.4 million towards past receivables. The Taq Taq partners have received USD12.2 million and will be shared pro-rata by Genel (44% WI) and Addax (36% WI). The payment comprises USD11.1 million towards May deliveries and USD1.2 million towards past receivables....

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Turkey-Genel gas update

In 2013, Turkey established Turkish Energy Company (“TEC”) as a vehicle to enter into partnerships with IOCs for dealings in Kurdistan. TEC was a state-backed entity and an offshoot of Turkish Petroleum International Company (“TPIC”). Earlier this year TEC was placed under BOTAS, the state-owned oil and gas pipelines and trading company, with gas coming back to one of the top items on the agenda of the Turkish government. It is now commanding attention at the highest levels of government, driven by a strong will to secure Kurdish gas to strengthen...

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Downgrade coming at Taq Taq?

Genel released a disappointing production update this morning with Q3 2016 working interest production of 53.1mbopd. For the quarter, Taq Taq and Tawke gross production averaged 58.6mbopd and 109.2mbopd respectively. Taq Taq’s production compares with 130mbopd a year ago. A workover campaign on Taq Taq is ongoing with TT-27x and TT-07z completed in Q3 2016; a third side track, TT-16y, is currently underway. As a result of the recent performance, FY16 production is expected to be at the bottom end of the 53-60mbopd guidance range and revenue will...

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Further payments by the KRG

DNO and Genel Energy announced on 22 March that the Tawke and Taq Taq participants have been paid by the Kurdistan Regional Government (“KRG”) for oil sales during February. News of another month of payment should help boost sentiment. Given that the export pipeline was out of service during the second half of February, sales at Taq Taq and Tawke were down materially month-on-month at 62,091bopd and 73,124bopd, respectively. Sales into the local market from both fields were, however, invoiced at the wellhead export netback price, in line with...

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KRG switches to PSC terms to conserve cash outflows to IOCs

Kurdistan exports and payments to IOCs remain unpredictable with the situation subject to change on a daily basis. The Kurdistan Regional Government’s (“KRG”) monthly export report and news flow from the E&Ps gives a glimmer into the dynamics of operating in and getting paid in Kurdistan. On 4th February, the KRG published its January 2016 monthly export report – the KRG exported 602mbbl/d through the Kurdistan pipeline network to the port...

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Kurdistan producers receive fourth consecutive payment from the KRG

Tawke processing facilities Source: KRG On 6th January, DNO and Genel announced that partners of the DNO-operated Tawke field have received a gross payment of USD30 million from the Kurdistan Regional Government for oil exported through the Kurdistan Region of Iraq-Turkey pipeline. This represents the fourth export payment by the KRG since payments recommenced in September. On 5th January, Genel also confirmed that the Taq Taq field...

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