Iraq Update
13 May 2011
Final
payment of US$2.5m received in relation to the Engineering, Procurement and
Supervision of Services (EPC) contract on the Subba
and Luhais oil field.
Application being made to participate in the Fourth
Iraqi Hydrocarbon Licensing Round.
The board of Petrel Resources (AIM:PET) is pleased to
announce that Petrel has received the final US$2.5m payment due in relation to
the Engineering, Procurement and Supervision of Services (EPC) contract on the Subba and Luhais oil field
development. The company retains a 10% profit interest in the project.
Completion meetings with the Iraqi authorities are scheduled during May 2011.
Since Subba and Luhais is successfully nearing
completion, Petrel is now preparing a detailed proposal to participate in the
recently announced Fourth Licensing Round in Iraq. Specific blocks have
been identified, with a focus on the oil-prone acreage becoming available from
January 2012. The closure date for pre-qualification documents is 19th
May 2011.
It should be noted, the 10,000km2 area formerly known as Iraqi Western
Desert Block 6 is not one of the
blocks on offer in the current round. The new, Block 6 advertised by the Iraqi authorities is
not in any way connected with the Western
Desert Block 6 . The long term, continued interest of Petrel in this area is
known to the relevant authorities in Iraq.
David Horgan, Managing
Director, commented:
We
reaffirm our commitment to Iraq. The Subba and Luhais Joint Venture company has
paid Petrel the final US$2.5 million due. We maintain a 10% profit
interest in the project, but the prevailing circumstances in Iraq, especially
delays and materials inflation, means that any profit
is likely to be small.
The Subba and Luhais project is now nearing successful completion, after
the parties overcame operational obstacles.
Successful delivery of all equipment and services to site, without injury, loss
of life or equipment is a major achievement for everyone involved with this
important project. This experience proves that with goodwill, enthusiasm
and unremitting effort, large-scale work can be satisfactorily delivered
notwithstanding the prevailing circumstances.
We have identified specific targets in the blocks
included in the Fourth Hydrocarbon Licensing Round. Petrel is now
completing a detailed submission to the authorities. The closing date for
application is 19th May. The blocks on offer are interesting for gas
and oil but do not include the 10,000km2 area known as Iraqi Western Desert Block 6 .
A successful election in March 2010 led to many months
delay in the formation of a new government, which in turn hampered the planned
rapid development of Iraqi oil. A new Administration has taken charge,
and remaining issues are being resolved.
We expect renewed progress in the coming months to
drive forward the development of Iraq and particularly its hydrocarbons
industry, to the benefit of all stakeholders. We have a strong balance sheet
with over US$6m in cash and are well-placed to take advantage of opportunities.
Enquiries:
Petrel Resources
Plc
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David Horgan, Managing Director
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+353 (0)87
292 3500
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John Teeling
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+353 (0)1
833 2833
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Northland
Capital Partners Limited
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Charles
Vaughan
Gavin Burnell
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+44 (0)20
7796 8800
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College Hill
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Nick Elwes
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+44 (0)20
7457 2020
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www.petrelresources.com