Crescent Petroleum, Dana Gas to increase gas production from Khor Mor field by 25% in 2018

3/21/2018

SHARJAH -- Pearl Petroleum, the company consortium led by Crescent Petroleum and Dana Gas of 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 on Jan. 30. 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, to enable an increase in delivered gas production from Khor Mor field by an anticipated 80 MMcf of sales gas per day before the end of 2018, from the current level of 305 MMcf per day. All contractual conditions precedent for the agreement have since been satisfied and consequently the project work has now commenced.

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. These 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 is through a fast-track de-bottlenecking project, whereby Pearl will increase daily production of natural gas and condensates from Khor Mor field by around 25% later this year, which will deliver much needed gas to fuel additional affordable power generation for the benefit of the local population and Iraq as a whole. This accelerated debottlenecking project represents an important first step in the overall plan to increase gas production by a further 125% within two years after that to eventually reach around 900 MMcfd of gas production, together with associated liquids.

Total investment to date exceeds $1.3 billion with total cumulative production over 228 MMboe, which has resulted in billions of dollars of fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. Operation full-time staff numbers are close to 500 with over 80% localization, and training programs to increase this figure further. In addition, Pearl has contributed to local communities with support for local power generation, education and healthcare facilities, as well as support programs for internally displaced Iraqis.

Dana Gas has previously announced that the appraisal program has, to date, resulted in proven certified reserves of 15 Tcfg and 310 MMbbl of condensate.

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