Dana and Keystone to boost oil and gas investment in Kurdistan

A flame rises in the Taq Taq oilfield in the Kurdistan region of Iraq. (Reuters)
Updated 10 September 2018
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Dana and Keystone to boost oil and gas investment in Kurdistan

  • Rising oil price improves payments and output
  • Iran sanctions drives oil price higher

LONDON: The Kurdistan region of Iraq is set to attract increased investment from international oil and gas companies as the improving price of crude boosts sentiment.
Abu Dhabi-listed Dana Gas said it would raise gas production after Pearl Petroleum, in which it has a 35 percent stake, received its latest payment from the Kurdistan Regional Government.
Britain’s Gulf Keystone Petroleum also said it was resuming spending on the Shaikan oilfield in the region as it reported record profit for the first half.
The price of oil has been rising steadily as the US reintroduces sanctions against Iran, a major global crude suppliers. Crude prices have tripled since the 2016 trough of the market.
The prospect of a stronger price is encouraging oil and gas companies to revive spending in the sector.
“The resurgence in oil prices also played a role in the global investment community becoming increasingly positive on the prospects for the oil and gas sector,” Keystone said in a statement.
Dana Gas has been beset by payment problems in Kurdistan but has been encouraged to look at expanding operations after receiving its latest payments through Pearl Petroleum.
Dana said yesterday that Pearl Petroleum had received $21.6 million from the Kurdistan Regional Government in September — taking total collections to $211 million — or $74 million for Dana’s share of the proceeds. It means that all payments are now up to date.
“The continued arrival of these payments on time provides both us and our partners with the confidence to push forward aggressively with our expansion plans,” said Dana Gas CEO Patrick Allman-Ward.
Gulf Keystone also said that it had continued to receive regular payments since Sept. 1, 2015.
Oil prices gained on Monday as US drilling slowed and the market remained watchful of the impact of Iranian sanctions on global crude supplies.
Brent crude oil jumped more than a dollar or 1.4 percent, to a high of $77.92, before paring gains to about $77.60 by early afternoon in London


‘Substantial progress’ made on major China trade deal that excludes US

Updated 18 min 39 sec ago
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‘Substantial progress’ made on major China trade deal that excludes US

SINGAPORE: Substantial progress has been made on hammering out a China-backed trade deal, Singapore’s leader said Wednesday, driving ahead the world’s largest commercial pact which the United States is excluded from.
World leaders gathered in the tropical city state this week for a summit where a massive Beijing-backed agreement covering half the world’s population has dominated discussions.
Diplomats have been trying to nail down details as Beijing entices its neighbors to join a commercial alliance seen as an antidote to President Donald Trump’s “America First” protectionist trade policy.
The US has imposed tariffs on roughly half of what it imports from China, prompting Beijing to retaliate with its own levies.
Beijing’s leaders have recast themselves as the defenders of global commerce — with the United States under Trump relegated to the sidelines.
China, Japan and India are among 16 Asia-Pacific countries negotiating the Regional Comprehensive Economic Partnership (RCEP).
“Substantial progress has been made this year to advance the RCEP negotiations,” Singaporean Prime Minister Lee Hsien Loong said Wednesday evening, adding talks were now “at the final stage.”
“With the strong momentum generated this year, I am pleased to note that the RCEP negotiations are poised for conclusion in 2019,” he added.
But he cautioned any further delays could risk “losing credibility” for a deal — which has already taken six years to negotiate.
This week’s meetings are the biggest in a series of annual gatherings organized by regional bloc the Association of Southeast Nations (ASEAN), and are attended by 20 leaders.
RCEP was given extra impetus after US President Donald Trump pulled the US out of the rival Trans-Pacific Partnership (TPP) in early 2017.
That deal was spearheaded by his predecessor Barack Obama and aimed to bind fast-growing Asian powers into an American-backed order to counter China.
The TPP is still alive even without Washington — and will come into effect in December — but RCEP, if realized, will be the world’s biggest trade deal.
However, the Beijing-backed pact is much less ambitious than the TPP in areas such as employment and environmental protection.
Beijing had hoped to have the meat of the deal done by the end of this year, but the timetable has now slipped to 2019.
However, this has not stopped Chinese leaders from basking in the progress already made.
During a meeting with Southeast Asia leaders, Chinese Premier Li Keqiang said he was hopeful talks would “break through the ceiling” and take regional trade “to new heights.”
Trump is not at the Singapore summit, nor will he attend a subsequent gathering of world leaders in Papua New Guinea at the end of the week, having sent Vice President Mike Pence instead.
National Security Adviser John Bolton, however, told reporters in Singapore that the president’s no-show should not be seen as a lack of commitment toward the region.
He blamed a “schedule crunch” after a particularly frenetic few weeks that included the midterm elections, attending the World War I armistice commemorations in France and preparing for the G20 in Argentina later this month.
There are still major sticking points in RCEP talks — with regional rival India particularly nervous about giving Chinese companies greater access to its markets, and wealthier nations wanting to see more progress on labor reforms.
Disagreements on intellectual property rights, goods tariffs and financial services are also on a long list of issues that still need to be concluded.
Also, the spectre of possible leadership changes with several general elections scheduled early next year — India, Thailand and Indonesia — have also complicated the timeline for a deal.
Aaron Connelly, an expert on Southeast Asian politics at the International Institute for Strategic Studies, said the fact that RCEP negotiations were not concluded at this year’s ASEAN could indicate China has some way to go to convince neighbors to sign up.
“It’s interesting that when Beijing is at its most vulnerable on trade, with US tariffs biting, they weren’t willing to concede enough to their neighbors in terms of market access to get a deal done,” he told AFP.
At the same time, trade ministers across Asia Pacific have sounded a largely positive tone this week, saying they expect the pact to be agreed sooner rather than later.
“The future lies in RCEP,” Indian trade minister Suresh Prabhu told reporters earlier in the week.