Pearl Petroleum, the consortium led by Crescent Petroleum and Dana Gas, signed a 10 year gas sales deal with the Kurdistan Regional Government (KRG) which will boost production from Khor Mor Field after a US$600 million expansion.
The agreement will boost delivered gas production from the Khor Mor Field by an anticipated 80 million cubic feet of sales gas per day before the end of 2018, from the current level of 305 million cubic feet per day, Dana Gas said in a statement.
"The gas sales agreement marks an important milestone in our tenth year of continuous production, and the beginning of a new chapter of expansion in operations and production which will see a further investment of over $600 million over the coming few years and a more than doubling of production,” said Majid Jafar, CEO of Crescent Petroleum and board managing director of Dana Gas.
The agreement, meant to meet KRG’s domestic energy generation demand, was signed on 30th January 2018 by the KRG Minister of Natural Resources Dr. Ashti Hawrami, CEO of Crescent Petroleum Majid Jafar and CEO of Dana Gas Dr. Patrick Allman-Ward. Dana Gas said all contractual conditions precedent for the agreement have been satisfied and the project work has begun.
"The Kurdistan Region of Iraq holds potentially more than 200 tcf of gas and the KRG is committed to playing a positive role in the growing gas and electricity needs of Iraq and the region,” said Dr. Ashti Hawrami, Minister of Natural Resources of the Kurdistan Regional Government (KRG).
In August last year, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration between them, including receiving $1 billion in cash from the KRG for past receivables and committing to expand their investment and operations in the region.
“Despite all the challenges we have maintained our production levels and operations and now with the settlement of all past receivables last summer and continuous payments since then, we look forward to significantly growing production to meet the growing demand for gas and electricity in the Kurdistan Region and Iraq as a whole," said Dr. Patrick Allman-Ward, CEO of Dana Gas.
The expansion plans include a multi-well drilling program in both the Khor Mor and Chemchemal fields, as well as installation of additional gas processing and liquids extraction facilities. The fields are operated jointly by Crescent Petroleum and Dana Gas on behalf of Pearl Petroleum.
The initial phase of this expansion will see Pearl increase daily production of natural gas and condensates from the Khor Mor Field by around 25 per cent later this year, which will deliver much needed gas to fuel additional affordable power generation.
Dana said this accelerated debottlenecking project represents an important first step in the overall plan to increase gas production by a further 125 per cent within 2 years after that to eventually reach around 900 million cubic feet per day of gas production, together with associated liquids.
The consortium’s total investment to date exceed $1.3 billion with total cumulative production over 228 million barrels of oil equivalent (boe), Dana said.
Dana Gas previously announced that the appraisal programme has to date resulted in proven certified reserves of 15 trillion cubic feet (tcf) of gas and 310 million barrels condensate.