Genel Energy Share Discussion Threads

[pogue] 27/10/2017 13:42

Whiskeyinthejar
I think you are misinterpreting the loss of 50% of revenue. They have lost 50% of their revenue from their 'own output' ie oil they solely control they still have revenues from the oil produced by independent oil companies on top of that. Still a large loss mind you but not 50% of all revenue from oil.

[cyan] 27/10/2017 12:56

You can follow the military situation on the ground here;



mouse over the symbols for links to whats happening; for example to see the latest tank destroyed.

The most significant action is in the far NW . Part of undisputed KRG territory blocks Iraq from direct border with Turkey. If they want to by pass KRG areas and pipe by another route, they have have to take about 5-10 km of true KRG territory. That's crossing a red line. The KRG has to inflict a decisive defeat there.

[pogue] 27/10/2017 12:44

They stopped payments before as they had to use the money to run the army etc will they make the same choice again is the question looking at the share price I am feeling many have sold on the worry they will pay domestic bills rather than oil companies. I did read somewhere that they were going to reschedule the short term debt due on the forward sold oil.

[cyan] 27/10/2017 12:40

If the KRG want to grow the alternative oil and gas assets I would hope they had the sense to understand that to stop paying the companies is only going to make things worse for them in the longer term. Without investment production will decline.

[pogue] 27/10/2017 12:19

Log
look back there were a few posts on the payment issue by me. The problem in a nut shell as I see it is that the sales from the oil from Kirkuk was going straight into the KRG coffers as the fields belonged to North Oil ie Iraqi government therefore they have now lost a large income stream whilst still having to pay the promised back payments to the existing oil companies in Kurdistan that they owe due to non payment of oil revenues in the past. Add in the fact they forward sold a lot of the oil from Kirkuk and the problem of non payment of oil companies for production in Kurdistan arises again.

[loglorry1] 27/10/2017 12:16

@cyan no I know but if Genel is not getting paid they can't/won't pay for Capex. Who is going to buy new Genel bonds with current situ? It's all just different sides of the same coin.

[cyan] 27/10/2017 12:01

Good afternoom loglorry1
Its not the KRG that has been paying the development costs. I expect that GENL will issue new bonds toward the gas costs when go ahead is confirmed. Other parties are likely to be majors. I never expected the KRG to pony up. There job is to mend the politics and get some normality back asap.

[loglorry1] 27/10/2017 11:34

@cyan sure I get that but growing production requires capital expenditure. It's a difficult balancing act. Getting capex investment is hard when politics are so fraught. I completely agree with you though its the way out.

[cyan] 27/10/2017 10:54

"what do they do?"
Get other income streams working ASAP like the gas, otherwise they have to re-take the oil fields. Do not see that happening

[loglorry1] 27/10/2017 10:49

Thanks D1nga - I realise DNO,GKP,Genel are still exporting as before but what worries me is that GKP will have enough to pay them after losing the revenue that was coming from Kirkuk. To be honest though I don't know exactly how much they were making from Kirkuk. I assume they won't now have to pay for the oil produced there anymore for example so it's hard to say how badly hit they will be.

I think KRG will be reluctant to cut payment to these companies because it's the only source of revenue they have but if the money is simply not there what do they do?

[d1nga] 27/10/2017 09:59

log , latest is that some kurd companies are now working with Iraq/baghdad to get the oil from the kirkuk area back on line and exporting again , the trouble is the kurds who operated the fields have done a runner (who'd blame them) and removed critical equipment and software to slow subsequent start ups somewhat , current export rate to ceyhan is circa 265k/d - importantly all our production is normal , all gkp (trucked) is normal . I see no reason why this will impact payments due at all , be back to normal flow rates in a month I'd estimate

[loglorry1] 27/10/2017 09:38

Just catching up but surely if KRG production has dropped that much they won't be able to make the same payments to the operators Genel, GKP, DNO even if production from these companies is still making it through the pipeline?

[cyan] 27/10/2017 09:33

I would rather the parties argue any legalities in the courts rather than the battlefields.
Do the Iraqi government really need to sour relations with Russia?.
Turkey has, in effect, been undermining the central government for years by facilitating the 'illegal' flow of oil to market via their pipeline.
I believe there has been some legal action dragging on for years. That's the thing with the courts; it takes forever to get a result.
It is true that oil from Kurdistan has ended up in Israel. However , I think it a step too far to suggest Iran would forcibly try and stop Russian state owned Rosneft from sending gas to the Turkish market. Israel oil is a different 'issue' for them.
I take some heart from the huge Turkish interests holding GENL stock. Hopefully they have some lobby clout.

[pogue] 27/10/2017 09:27

I would suggest that the deal that will be made will be 50/50 spilt of revenue from Kirkuk and the Kurds to get what's on their land in return for staying part of Iraq. The reason being the major countries seem happy to have a Kurdish state within Iraq but not outside and the USA will give them some support for their support in beating ISIS just not independence. Add to that the Pesmerga are not going to let anyone into Kurdistan to take the oil there and nobody seems to have the desire to start a war. So the deal would give everyone most of what they want. Clearly a lot of talking has to happen before then.
I should add BWTFDIK they are all mad out there.

[d1nga] 27/10/2017 09:25

I fully expect the fighting to go on a bit longer due to no side wanting to lose face by doing a u turn , BUT importantly what Bahgdad is currently doing goes against the Iraq constitution and with a few more bloody noses from the peshmerga and a little more diplomatic pressure from the US (or even Putin) and we will end up back at the status quo we had 6 weeks ago - all IMO

also importantly it appears the last tanker took about 18 hrs to fill from the ceyhan terminal , so either she left partially full or pipeline flow rates have increased dramatically

[whiskeyinthejar] 27/10/2017 01:22

LW425 is a troll but its true that Baghdad does say all of the oil in Iraq belongs to all the Iraqi people and Kurds have no right to sign anything.

Baghdad think that Genel's contracts are too generous. Im not sure, but I believe Iraq still doesn't do production sharing contracts like Genel has, rather its service contracts in Iraq.

But more importantly, Baghdad still view oil&gas contracts signed by Kurds as illegal.
Here they are just last week saying the Russian oil pipeline deal with Kurdistan is illegal:



In fact, the gas revenue is potentially game changing just like the Kirkuk oil revenue, with respect to Kurdistan having the revenue for independence.

So consider this tweet from rudaw:

Namo Abdulla‏@namo_abdulla Oct 24
Director of @khamenei_ir's office says Iran prevented creation of a "second Israel" in N Iraq, adding Kirkuk oil wont go to Israel anymore.



ie Iran fought for Kirkuk to prevent independence.

So I suspect Iran is also ready to shed blood to prevent Kurdish gas ever being exported too!

[losses] 27/10/2017 00:24

Iran to Reopen Second Border Crossing with KRG Basnews English

[rangor] 26/10/2017 23:21

Didn't a lot the KRG's fiscal problems start with Baghdad only giving them a tiny proportion of the national budget they should have received?

[fangorn2] 26/10/2017 21:55

Shaikan crude still being trucked as far as I'm aware...

[pogue] 26/10/2017 21:02

I dont think there will be any clarity. Based on what happened last time they were short of money they just stopped paying people. Maybe they have learned from the error off their ways and be more open this time but who knows.

[gregpeck7] 26/10/2017 20:09

I think we will find that they back out of the receivables deal. It's simply unaffordable for the krg. I suspect what they will do is divide their 25 percent of tawke ( of which they have already given to dno) and give us 1/3 eg 8 percent and dno the rest with that being it. So better than we had but not what we have now. I think it will be along the lines of take it or leave it... the way this is planning out once they have spent the advance payments from the various trading houses they simply won't be able to pay as things stand. We need clarity in this space really and krg finances are probably anything but clear.

[panagos] 26/10/2017 19:26

good riddance

hxxp://www.newsweek.com/iraq-new-war-kurd-leader-barzani-may-step-down-keep-power-family-693217