Heritage Oil, a Canadian exploration firm, has made the biggest Iraqi gas discovery in more than 30 years. But investors hoping for an oil discovery punished the company for its surprise announcement yesterday, sending its share price down 17 per cent in London.
"Previously anticipated prospective oil resources … have proven to be wet gas/condensate," Fox Davies Capital in London said in a research note. "We would expect the announcement to have a negative impact on the share price."
In early afternoon trading in London, Heritage shares were priced at 360.9 pence, down from the previous day's close of 406.6 pence. The steep one-day drop wiped out most of the stock's gain of about 20 per cent during the past month.
"The discovery of a major gasfield of up to 12.3 trillion cubic feet in-place with exceptional flow rates makes this one of the largest gasfields to be discovered in Iraq," said Tony Buckingham, the chief executive of Heritage. "This well has substantially de-risked the field, so we have the confidence to accelerate the work programme."
The company valued its share of the gas in the Miran field in Iraqi Kurdistan, in which it holds a 75 per cent working interest, at about US$2.7 billion (Dh9.91bn). It said the gasfield was considered the sixth-largest discovered in Iraq.
"We are considering various development options including a tie-in to planned infrastructure that will achieve first production for both oil and gas in 2015," said Mr Buckingham. "This discovery has the potential to generate substantial further value for our shareholders and benefit the people of Kurdistan and Iraq."
The projected start-up date, however, is further off than would have been expected for oil and is dependent on others building an international export pipeline. Moreover, in the currently glutted global gas market, oil is fetching near-record price multiples to thermally equivalent volumes of gas.
Heritage said its gas could feed the proposed Nabucco pipeline, which, if built, would deliver Caspian and Middle Eastern gas to Europe via Turkey, bypassing Russia. A planned feeder line would allow Kurdish gas to contribute significantly to the project.
"Heritage has the opportunity to participate in the development of huge conventional gas reserves close to Turkey and European markets," the company said. "A number of integrated gas companies, including [Nabucco partners] OMV, RWE and MOL, have entered Kurdistan with a view to creating a route to market for Kurdistan's major gas reserves." The six Nabucco backers, however, which also include Bulgarian Energy Holding, the Romanian utility Transgaz and Turkey's Botas, have yet to make a final investment decision. OMV, RWE and MOL are respectively Austrian, German and Hungarian energy companies.
The Heritage test well produced 40 million cubic feet per day (cfd) of gas. The company said the well was capable of pumping more than 100 million cfd when placed on production.
There is still a possibility of a commercial oil discovery in a zone above the gasfield, but Heritage indicated the prospective reservoir rock was "tight", meaning any oil would be difficult to extract. The presence in its gasfield of significant volumes of gas liquids, which are prized as petrochemical feedstock, is nevertheless a bonus for the company.
Other uncertainties facing Heritage are when, whether and on what terms Baghdad will allow oil and gas exports from Kurdistan. Abdul Kareem Luaibi, the new Iraqi oil minister, has indicated Kurdish oil exports may restart next week after an agreement was reached between Baghdad and the Kurdistan regional government. Any such agreement may not immediately apply to gas, as Baghdad may take the view that at the moment all Iraqi gas is needed for domestic power generation.
tcarlisle@thenational.ae
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
COMPANY%20PROFILE
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The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
Quick facts on cancer
- Cancer is the second-leading cause of death worldwide, after cardiovascular diseases
- About one in five men and one in six women will develop cancer in their lifetime
- By 2040, global cancer cases are on track to reach 30 million
- 70 per cent of cancer deaths occur in low and middle-income countries
- This rate is expected to increase to 75 per cent by 2030
- At least one third of common cancers are preventable
- Genetic mutations play a role in 5 per cent to 10 per cent of cancers
- Up to 3.7 million lives could be saved annually by implementing the right health
strategies
- The total annual economic cost of cancer is $1.16 trillion
COMPANY%20PROFILE
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
More from Neighbourhood Watch
Bareilly Ki Barfi
Directed by: Ashwiny Iyer Tiwari
Starring: Kriti Sanon, Ayushmann Khurrana, Rajkummar Rao
Three and a half stars
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
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