WTI $107.67 -$2.93, Brent $110.46 -$2.47, Diff -$2.79 +46c, NG $4.72 -4c, UKNG 358.0p -66.36p
After a fall yesterday oil is up again today after Russian exports are being throttled by tanker and insurance sanctions hitting. Also inspectors apparently reported that enriched uranium stocks in Iran have doubled – well knock me over with a feather…
Also UKNG which opened at 358p touched 460p this lunchtime…
PetroTal yesterday advised that it has reduced production to ensure field safety and manage storage levels due to social protests at PetroTal’s loading dock.
On February 28, 2022 a small group from the Asociación Indígena de Desarrollo y Conservación de Bajo Puinahua (“AIDECOBAP”) commenced gathering outside the Bretana oilfield that led to access to the Company’s loading dock being blocked. To ensure employee / contractor safety and minimize environmental risk, the Company has constrained its production level to approximately 4,000 barrels of oil per day, accumulating into field storage facilities, while aiding in protest negotiations.
AIDECOBAP continues to push for fulfilment of their demands from the government. AIDECOBAP claims they are being persecuted by the government for protesting their requests. They are also requesting the establishment of an indigenous trust to allow them to execute projects whose funding was approved by the government in late 2020 to reduce the basic needs gap in local communities. Lastly, AIDECOBAP is also requesting that the government expedite the formalization of the Bretana 2.5% social fund, offered by PetroTal, into the Block 95 license contract.
For the second fortnight of January and all of February 2022, PetroTal had been segregating the 2.5% social fund into a separate bank account, but due to the current protests and resulting production curtailment, no funds will be allocated for the upcoming fortnight as per the guidelines of the social trust.
The Company is also monitoring the progress of necessary maintenance repairs to the Northern Peruvian Pipeline (“ONP”). While the repairs have been ongoing, PetroTal has been selling oil through the Brazil export route. Last month the Company completed a 240,000 barrel oil sale through Brazil, for the first time without diluent blending, which will have a positive impact on diluent costs in Q1 2022.
This action, whilst creating a headline is not of any obvious significance looked at in big picture terms. Whilst Bretana has been constrained it is gathering crude at field storage facilities, the company has the Brazil option and is now not paying into the social fund.
The shares have lost some 10% on this news but compared with the fact that they have nearly tripled since mid January all should be put into perspective, my 75p target remains intact.
Gulf Keystone Petroleum
Gulf Keystone confirms that a gross payment of $47.0 million ($36.8 million net to GKP) has been received from the Kurdistan Regional Government. The payment is comprised of gross $38.4 million ($30.1 million net) for Shaikan crude oil sales during November 2021 and gross $8.5 million ($6.7 million net) in relation to the arrears from the outstanding January 2020 to February 2020 invoices.
Following receipt of the arrears payments, the current outstanding arrears balance is $21.9 million net to GKP.
Nothing to add here, payments coming in roughly according to expectations.
It was a total shock this morning to wake up to the news that Aussie and world legend cricketer Shane Warne has died of a massive heart attack aged just 52. To me he was a total hero, with the ball in his hand, occasionally the bat and always with the microphone. Not many you can describe as irreplaceable but Shane was just that. RIP and of course on the back of another Aussie hero Rod Marsh who died last week of a heart attack also.
Anything else is by the by, in the Prem the lead game is the Manchester derby at the Emptihad but Liverpool v the Hammers wets the lips as well.