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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Mubadala enters Zohr - acquires 10% from Eni

Mubadala has agreed to acquire a 10% interest in Zohr from USD934 million. Mubadala will acquire an interest in the Shorouk concession which contains the Zohr field. The super giant field came onstream in December 2017, 28 months after its discovery. The field is currently producing 400mmcfpd and planned to reach plateau by the end of 2019. For Mubadala, this adds a world class asset with long term cash flows into its investment portfolio. Musabbeh...

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OVL to bid for South Azadegan oil development in Iran

Indian oil giant ONGC Videsh Limited ("OVL") will bid for the development rights of the giant South Azadegan in Iran. There is strong competition with the likes of Gazprom, Lukoil, Rosneft, Shell, Total, Eni Petronas, Inpex, Sinopec and CNPC. of Malaysia and Russia’s Gazprom. OVL is one of 34 companies that pre-qualified last year for development of the field which is estimated to contain 6bnboe recoverable and currently produces 80mbbl/d - with the right investment, this could reach 320mbbl/d. The National Iranian Oil Co ("NIOC") will issue a...

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Zohr record breaker

In record time for a deepwater gas development of this scale, Eni has announced first production from Zohr. The field was discovered in August 2015 and FID taken in early 2016 - Eni achieved first gas from discovery in 2.5 years. Zohr is the largest gas discovery ever made offshore Egypt and is located in the Shorouk block. The field has begun production at 350mmcfpd and is expected to grow to 1bcfpd by mid-2018. The speed of development is a...

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Kurdistan: The Rosneft connection

Rosneft provided a much welcomed source of funding for Kurdistan in February 2017 when it entered into an off-take contract for crude oil. Under the contract, Rosneft will purchase Kurdish crude until 2019 – the volume commitments were not disclosed. In April 2017, Kurdistan received USD1 billion for the first cargo of 600,000 bbl. The was an important landmark deal for the KRG, being the first time that crude was sold directly to a government-linked...

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Eni: Bringing in successive partners for Zohr

On 28th November, Eni announced the divestment a 10% interest in Zohr to BP for USD375 million plus pro-rata reimbursement of past costs (c.USD150 million net), bringing total consideration to USD525 million. BP also has an option to acquire an additional 5% interest on the same terms before the end of 2017. On 12th December, Eni announced that it had divested a further 30% interest in Zohr to Rosneft for USD1.125 billion and USD450 million...

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