Positive news on pipeline reopening - Iraqi PM states the pipeline should be reopened by the end of 2024!

Positive for Shamaran

https://www.apikur.uk/publications/apikur-calls-for-continued-tripartite-talks-to-restore-oil-exports-through-the-iraq-tu-rkiye-pipeline/

Clarksons today:

Kurdistan: APIKUR calls for continued tripartite talks to restore exports
In connection with the UN General Assembly in New York, Iraqi PM Mr. Sudani has been quoted stating that talks with companies and Kurdish officials are ongoing, and that an export solution is "possible" already by the end of 2024.

This has prompted APIKUR to issue a statement, where it reiterates that its members are ready to resume exports, conditional upon reaching agreements that provide for payment surety for past and future exports, direct payments and preservation of commercial and economic terms. APIKUR goes on to state that if such agreements require modifications to existing contracts, this could be considered if agreed between the GoI, KRG and the individual IOCs.

Iraqi Cabinet Approves Kurdistan Oil Exports Resumption, Source Says
Hassan Shah
November 5

The Iraqi Council of Ministers has passed a number of resolutions approving the export of oil to the Kurdistan Region.

A source told Channel8 that Baghdad has agreed to increase the cost of producing one barrel of oil from $6 to $16 and to resume the export of oil to the Kurdistan Region.

The source added that the Council of Ministers of Iraq has agreed to re-establish the census based on the 1957 census.

According to Channel8 source, any family not listed in the 1957 registry is not recognized as a citizen of Kirkuk.

Source: https://channel8.com/english/24636

Very bullish news

Cabinet advances proposal for northern oil export restart

Iraq's main political factions appear to have an initial agreement for paying Kurdistan's oil companies for exports, but legislative, legal, and practical hurdles remain.

Iraq's Cabinet has approved a proposal to amend the national budget law in a way that would theoretically allocate new funds to pay Kurdistan's oil contractors — a key step toward restarting northern exports via Turkey.

The proposal, which still needs to be approved by Parliament, would amend Article 12 of Iraq's national budget law to enable advance payments of $16 per barrel to the Kurdistan Regional Government (KRG) to cover the costs of producing and transporting crude for export via the federal government's marking company (SOMO), according to a senior Iraqi official directly familiar with the deal.

https://www.iraqoilreport.com/news/cabinet-advances-proposal-for-northern-oil-export-restart-46787/

Carnegie today: Kurd pipeline reopening, that was approved this week by the Government in Iraq, should double Shamaran share price

Shamaran is Lundin Group company.

Carnegie:
Value upside even with only local sales; BUY and SEK1.00 target price reiterated
ShaMaran Petroleum is one of few oil companies to still focus on Kurdistan. The export pipeline is still closed due to the ongoing dispute between the Kurdish and Iraqi governments, and nobody knows for how long that will last. But ShaMaran is currently selling its oil in the local market, directly to private buyers, at significant price discounts. Even if this situation prevails forever, which we think is unlikely, we still estimate a NPV of SEK0.72 (15% WACC, only 2P reserves), which is higher than today’s share price. If the pipeline reopens in 2025, we calculate a NPV of SEK1.33 per share.

Bullish for Shamaran:

Kurdistan Region oil exports could continue in weeks: Minister

ERBIL, Kurdistan Region - Kurdistan Region’s long-suspended oil exports could be resumed later this year if the Iraqi parliament passes an amendment proposed by the federal government, Iraq’s foreign minister said on Thursday.

Last week, the Iraqi government approved a proposal to amend articles from the federal budget to authorize compensation to companies operating in the Kurdistan Region for oil production and transportation costs, setting the rate at $16 per barrel. The proposal - yet to be finalized by parliament - aims to resume oil exports from the Region.

“We have sent this decision to the parliament because it falls under the budget law and we hope that the legislature will vote on it in these days,” Iraqi Foreign Minister Fuad Hussein told Rudaw’s Sangar Abdalrahman on the sidelines of the COP29 climate summit in Baku, Azerbaijan.

“If it [parliament] passes it [the amendment], the Kurdistan Region will be able to export oil… before the New Year,” the minister explained.

Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023 after a ruling by a Paris-based arbitration court ruled in favor of Baghdad over Ankara, saying the latter had breached a 1973 pipeline agreement by allowing Erbil to export oil independently since 2014.

Hussein also mentioned that there are ongoing talks with Ankara over the issue.

The Association of the Petroleum Industry of Kurdistan (APIKUR), an umbrella group for international oil companies operating in the Kurdistan Region, on Thursday welcomed the proposal introduced by Baghdad.

Iraq’s three-year federal budget bill, passed in June 2023, had set the rate for one barrel of oil at $6.90 and international oil companies (IOCs) have requested three times that amount.

Before the halt, Erbil exported around 400,000 barrels per day through the pipeline, in addition to some 75,000 barrels of Kirkuk’s oil.

The KRG signed production-sharing contracts with international oil companies when it began its independent oil sector. Under this model, the oil companies cover the entire cost of production while the KRG receives the lion’s share of the profits from successful projects.

Baghdad has repeatedly said that these contracts violate the constitution and must be amended to match the service contracts that the federal government prefers before exports can resume.

There have been international calls for the resumption of Kurdish oil, with the US saying an end to the halt is “mutually beneficial” to all parties.


https://www.rudaw.net/english/middleeast/iraq/14112024

Clarkson:

Shamaran Petroleum (SNM SS, SEK 0.71, Buy, PT: SEK 1.30)
Strong Free Cash Flow Following Asset Transaction
We reiterate our BUY recommendation on ShaMaran and maintain our Target Price of SEK 1.3/share. We postpone the expected pipeline reopening to the start of Q2 next year, with several reports suggesting that Iraq's Cabinet has approved a proposal to amend the budget law in a way that would theoretically allocate new funds to pay Kurdistan's oil contractors. We model an upside of 78% to our current Target Price.
Reiterating BUY, maintain our Target Price of SEK 1.3/share — With this report, we reiterate our BUY recommendation with a Target Price of SEK 1.3/share. We model an NAV of SEK 1.6/share, and add a discount to NAV of 20% to account for general operational and political risk.

Arctic:

Kurdistan: Federal budget amendments progressing through Parliament approval process
The Parlimentary processing of the proposed amendments to the federal budget, including a USD 16/boe compensation to the KRG for oil exports, appears to be moving ahead. As we understand it, an amendment that specifices technicalities around the international consulting firm review of specific field compensations has been added to the second reading which is planned for today. The amendment state that the international consulting process is to be conculded within 60 days of the law's enactment and that the costs will be "estimated fairly and equitably for each oil field".

the latest investor presentation:

https://shamaranpetroleum.com/site/assets/files/5559/snm_corp_presentation_-_final_nov_8_2024.pdf

Clarkson is increasing the price target for Shamaran:

"• ShaMaran Petroleum (SNM SS): Target Price raised to SEK 1.4/share (from SEK 1.3/share). BUY rating reiterated. TP revised as we remove the historical discount on Kurdish barrels from 2Q25 in anticipation of a pipeline reopening by start 2Q, with SOMO as the marketer of the oil from the region."

Progress in pipeline reopenning!

Iraqi Finance Minister to Address Kurdistan Oil Exports in Critical Parliamentary Session

According to Kurdistan24 correspondent Dilan Barzan, the main focus of the meeting will involve Article 12 of the 2025 budget law amendments, distinctively discussing the resumption of Kurdistan Region's oil exports.

https://www.kurdistan24.net/en/story/819211

Iraqi parliament is due to vote on pipeline reopening any day now - major catalyst for the Shamaran stock

"ERBIL — Hadi Al-Amiri, Iraqi politician and head of the Fatah Alliance, said there are no issues between the Kurdistan Regional Government (KRG) and the federal government, adding that the issue of the Region’s oil production costs will soon be voted on in the Iraqi parliament."

"The Iraqi parliament announced that it has completed the report and second reading of the amendment to the budget law. A second debate on the draft amendment is scheduled for Tuesday, January 13, 2025."


https://www.basnews.com/en/babat/872207

Voting on the pipeline reopening by the Iraqi Parliament set for this Sunday!
Bullish for Shamaran!

Agenda for the Iraqi Parliament on Sunday, January 19:

Second: Voting on the draft law of the First Amendment to the Federal General Budget Law of the Republic of Iraq for the fiscal years (2023 - 2024 - 2025) No. (13) of 2023. (Finance Committee)

ShaMaran Petroleum Corp. Interview with Iraqi Minister on pipeline reopening - the vote this Sunday is the last step!

Parliament set to pass budget amendment on KR oil cost ‘next week’– acting MNR Minister

The acting minister of Natural Resources (MNR), Kamal Muhammad, has said that he expects the Iraqi parliament to vote on the budget amendment on the cost of the Kurdistan Region’s crude production and transport next week, paving the way for the resumption of piped exports.

Muhammad, who is also the electricity minister, made the comments in a wide-ranging 30-minute long live interview with Kurdistan TV yesterday, 14 January. The station’s website published the video of the interview on the same day.

“We expect the vote to take place next week, then published in the [official gazette]”.

The presenter asked Muhammed if exports would resume by March, two years after they were suspended.

“I believe that the legal measures would be completed in January if no problems arise, since the only remaining step is the vote,” he said without elaborating on what these measures were.

“There’s a consensus to pass the amendment. And once it is passed, it will be published in the Iraqi gazette and it [the export] should resume,” he said.

However, he did not provide an exact timeframe for the resumption.

The parliament carried out the second reading of the amendment on 13 January, which raises production and transport costs to 16 dollars per barrel.

Muhammad spoke about a host of other issues, including illegal refineries in the Kurdistan Region, electricity supply and gas production. INSIGHT will publish another report on his interview.

KURDISTAN PIPELINE REOPENING UPDATE:

IRAQI BUDGET AMENDMENT WENT THROUGH THE FINANCE COMMITTEE TODAY, AND VOTE WAS PUSHED TO TUESDAY OR WEDNESDAY

Clarksons Top Ideas for 2025:

• ShaMaran Petroleum (SNM SS): Target Price raised to SEK 1.4/share (from SEK 1.3/share). BUY rating reiterated. TP revised as we remove the historical discount on Kurdish barrels from 2Q25 in anticipation of a pipeline reopening by start 2Q, with SOMO as the marketer of the oil from the region.

New presentation - Pareto conference in London today, Garrett Soden, the CEO is presenting:

https://shamaranpetroleum.com/site/assets/files/5561/snm_corp_presentation_-_january_23_2025_-_final.pdf