Page 6 - MEOG Week 32.indd

MEOG PIPELINES & TRANSPORT MEOG

Iraq ships gasoil to Lebanon as aid

IRAQ/LEBANON IRAQ has begun delivering gasoil to Lebanon as also delivered some 20 tonnes of medical aid.
a form of humanitarian aid following an explo- Gasoil and heavy fuel oil are used as feedstock at
sion last week that flattened much of Beirut’s port many of Lebanon’s power plants. But shortages
and the surrounding area. have been chronic and the country’s electricity
Lebanese officials say the blast occurred at a infrastructure is poorly maintained, resulting in
warehouse which stored some 2,740 tonnes of frequent power outages for decades.
ammonium nitrate and caused up to $15bn in Blackouts have become even more common
damage. The explosion left at least 158 people recently as a result of a dispute with Sonatrach,
dead, 6,000 injured and 300,000 homeless. Lebanon’s main fuel oil supplier, over accusa-
Lebanon is already struggling with years of tions that the Algerian firm has been adulterat-
economic decline and government mismanage- ing supplies.
ment and corruption, and the disaster has stoked Lebanon has said it wants to diversify its
public anger against authorities. The country has fuel imports once contracts with Sonatrach and
reached out to dozens of countries for financial Kuwait’s KPC expire at the end of this year. The
and humanitarian support. government is in talks with companies and is
In a statement on August 8, the Iraqi embassy preparing to hold a tender for fuel oil deliveries
in Beirut said that a convoy of 20 tanker trucks beginning in 2021.
laden with 720,000 litres of gasoil had arrived in Ismael noted that Iraq was also willing to
Lebanon. Iraq stands by its “brother” Lebanon,” provide Lebanon with heavy fuel oil. The two
the embassy said. countries held negotiations last month on Iraq
Iraqi Oil Minister Ihsan Ismael said gasoil supplying fuel oil to Lebanon in exchange for
cargoes would continue, noting that Iraq had agricultural products.™

PERFORMANCE

Genel provides first half update

ahead of Sarta start-up

KURDISTAN LONDON-BASED Genel Energy last week Meanwhile, drilling work at Tawke has been
announced its first-half results, reporting a slowed by the ongoing coronavirus (COVID-
$340mn operating loss while generating $6.5mn 19) pandemic coupled with uncertainty about
of free cash flow (FCF). payments, but a slideshow noted “the ability to
In a presentation to analysts on August 6, rapidly scale up as the external environment
CEO Bill Higgs praised the company’s “robust” improves”.
business model, and said that Genel’s “low-cost Genel holds a 25% WI in Tawke, where gross
production and the capital flexibility within our production averaged 108,580 bpd during the
development programme have enabled us to first half, increasing to 115,000 bpd following
preserve the strength of our balance sheet even fast-tracked activity amid improved oil price and
while investing in growth.” payment stability.
While the company already produces from Civil construction work at Sarta is now mate-
multiple licences within Kurdistan, the focus of rially complete, with the company now focused
2020 is undoubtedly Sarta, which Genel antici- on the completion and commissioning of the
pates bringing into production towards the end 20,000 bpd central processing facility (CPF).
of the year. Of an anticipated second-half capital This had been expected to occur in mid-2020,
expenditure (Capex) of $45mn, around 50% is bringing with it initial production. Once the CPF
earmarked to be spent on bringing Sarta into is commissioned, the Sarta-2 well recompleted
production. and re-entry carried out at the Sarta-3 well, pro-
For followers of Genel and Kurdistan, the duction will commence and cargoes transported
focus on Sarta further emphasises just how far to the export pipeline at Khurmala. Production
Taq Taq has dropped down the pecking order phase 1A will target 34mn barrels of 2P gross
in recent years. Taq Taq field was once the firm’s reserves in the Mus-Adaiyah reservoirs.
flagship asset, producing in excess of 100,000 Meanwhile, Genel is still owed $121mn by
bpd in 2015. However, following major reserves the Kurdistan Regional Government (KRG) in
downgrades, output has now fallen to just 11,260 relation to past production and Higgs said that
bpd, with Genel holding a 44% working interest. talks with Erbil remained ongoing.™

P6 www. NEWSBASE .com Week 32 12•August•2020