An oil facility in the Kurdistan Region. File photo: Rudaw
ERBIL, Kurdistan Region — Citing an increase of sales of gas, condensate, and liquefied petroleum gas (LPG), Dana Gas boasted on Sunday that its collections of production have doubled in the Kurdistan Region of Iraq. Also, one of its subsidiaries has signed a 20-year agreement with the Kurdistan Regional Government (KRG) to increase sales and production.
"We have had a very positive start to year in the KRI. Our debottlenecking project which we completed in October 2018 has increased our production output by 30% to 400 MMscf/d, [millions of standard cubic-feet per day]," said the company's CEO Patrick Allman-Ward in a statement.
Dana Gas is a United Arab Emirates-based company for Crescent Petroleum. Subsidiary Pearl Petroleum received $112 million from the sale of the energy derivatives.
"Dana Gas is a 35% shareholder in Pearl Petroleum and accordingly, its share of such receipts by Pearl Petroleum is $39 million ... This presents a 117% increase compared to the Company’s Q12018 share of collections which stood at $18 million," the statement said.
The Dana Gas CEO was optimistic, and the statement noted: "As of today, Pearl Petroleum has no overdue receivables in the KRI."
"We have begun to see the impact of the additional production on our Q1 collection, which has doubled," Allman-Ward added.
The KRG and Pearl Petroleum signed a 20-year gas sales agreement in February "to enable production and sales of an additional 250 MMscf/d."
"The Consortium aims to bring this production on-stream by 2021 as part of their expansion plans to raise output from the current 400 MMscf/day to 650 MMscf/day in 2021, and then to 900 MMscf/day by 2022," the statement added.
Dana Gas operates in the Chamchamal and Khormor oil fields in the Kurdistan Region.
The Kurdistan Region has sought to bolster energy production through largely untapped natural gas reserves.
"We believe that natural gas is the fuel of the 21st century and plays an important part in reducing carbon footprint as a cleaner fuel and in supplying power generation and industry," Majid Jafar, the Crescent Petroleum CEO, told Rudaw in an interview in January.
Ernst & Young's (EY) Commonwealth of Independent States (CIS) Managing Partner and Deputy Regional Accounts Leader for Central, Eastern and Southeastern Europe & Central Asia Alexander Ivlev also told Rudaw
in January that the Kurdistan Region's untapped gas reserves present an opportunity for growth of the sector.
The KRG has battled five years of financial crisis since Baghdad slashed its share of the federal budget, oil prices plummeted, and the costly war with the Islamic State (ISIS) sapped its resources.
The energy sector in the Kurdistan Region is privatized, while elsewhere in Iraq it is state-owned. This has presented opportunities for smaller oil and gas companies to take more risks, while larger companies have shied away from such costly ventures.