Oil & Gas Corporate News
Deputy Prime Minister Hussain al-Shahristani has declared that Iraqi Prime Minister Nuri al-Maliki was misquoted as saying the central government would honour Kurdish production-sharing oil contracts.
Comment: This is not the first time that official comments indicating a possible end to the licence dispute between the Iraqi government and the Kurdistan Regional Government, and the restart of oil exports from Kurdistan, have been reported in the press. Every time though, despite a very positive overall tone, the lack of essential details on the supposed agreements indicated that the dispute had not been resolved just yet. Similarly the comments reported from Prime Minister Maliki fell short of mentioning, let alone providing details on, the payment of profit oil. We are convinced that the exploration licences in Kurdistan will be recognised by the Iraqi government and that fiscal terms, already stringent even by the standards of service contracts in southern Iraq, will not be renegotiated. However, it might take a while longer for negotiations to complete.
Circle Oil (LON:COP) (BUY, £0.90) (COP, 39p, ? (0.0%)) announced that the DRJ-6 exploration well has been successfully tested in the Sebou Permit, Rharb Basin, Morocco. DRJ-6 was drilled in April 2009 and, as previously announced, not tested due to local logistical problems at the time of drilling. The Company confirms a gas discovery in the Base Guebbas target. The well tested gas at a sustained rate of 5.363mmscf/d on a 26/64" choke. The perforated Base Guebbas zone of 1.5m at 1,042.25-1,043.75m MD and 3m at 1,046.0-1,049.0m MD has a calculated net gas pay of 4.5m. The well is being completed as a potential producer. A full technical evaluation of all the results of the well is underway. This will allow for forward planning as a precursor to further assessment of the resource, including conducting an extended well test to give a more complete estimation of the reserves. Due to bad weather over the last two weeks and some flooding in the permit area, the drilling rig will be demobilised to move onto the higher level KSR-10 site near to the location of the fifth and final well of this campaign, being the KSR-11 exploration well. The rig is expected to be stored for 2-3 weeks whilst weather conditions improve before drilling operations on KSR-11 commence. Further updates will be provided in due course. The…
