Pearl Petroleum, the company consortium led by Crescent Petroleum and Dana Gas both based in the UAE, has signed a 10 year gas sales agreement (GSA) with the Kurdistan Regional Government (KRG) to supply and sell the additional quantities of gas that it plans to begin producing later this year in order to boost much needed local domestic electricity generation.
The GSA was signed 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, to enable an increase in delivered gas production from the Khor Mor Field by an anticipated 80mn cubic feet of sales gas per day before the end of 2018, up from the current level of 305mn cubic feet per day.
In August last year, Pearl Petroleum reached a full and final settlement with the KRG to receive $1bn in cash for past receivables and committing to expand their investment and operations in the region. These expansion plans include a multi-well drilling programme 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 is through a fast-track debottlenecking project, whereby Pearl will increase daily production of natural gas and condensates from the Khor Mor Field by around 25% later this year. This accelerated debottlenecking project represents an important first step in the overall plan to increase gas production by a further 125% within two years to eventually reach around 900mn cubic feet per day of gas production, together with associated liquids.
Total investment to date exceeds $1.3bn with total cumulative production at over 228mn barrels of oil equivalent.
Majid Jafar, CEO of Crescent Petroleum and board managing director of Dana Gas, commented: “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. The gas we have produced has led to significant fuel savings and social and economic value for the economy, and we hope to grow this in the years to come from the significant resources of these world class fields, for the benefit of the Kurdistan Region and all of Iraq.”
