UK-listed Petrel says Iraqi oil fields on track for 2009 start

London (Platts)--22Jun2006

UK-listed explorer Petrel Resources Thursday said it believes it is on
track to start output from its Subba and Luhais oil fields in southern Iraq,
during 2009 amid "manageable" security risks in the region.
Iraq's oil ministry awarded Petrel the three-year, $197-mil Subba/Luhais
contract last September, in the largest contract awarded by the Iraqi oil
ministry since 2003. The project aims to boost the field's production to
200,000 b/d from a current 50,000 b/d, and add gas output of 100,000 Mcf/d.
Irish-based Petrel said it received its first $20 million advance payment
in April for work down on the fields and engineering design and site work
continue. The Subba/Luhais, located in a relatively secure area in southern
Iraq, has reserves of 2.2 billion barrels.
Petrel also said it is in talks with a multinational oil company to
participate in its Iraqi projects and fund exploration, including a Technical
Cooperation Agreement for the 760 million barrel Merjan oil field in central
Iraq.
"We have been in negotiations with a large international group to
participate in our Iraqi exploration ventures. These talks may come in
fruition in the near future," executive chairman John Teeling said in a
statement. "We are optimistic about the future. In the coming months we will
complete the initial Merjan study and place orders for Subba and Luhais
equipment."
Petrel's shares where trading 9.6% higher at 48 pence in London by 0928
GMT.
The company also said it expects that the Iraqi government's new
hydrocarbon law, once passed, to confirm its Block 6 contract which covers
10,000 sq km in Iraq's Western Desert. The block was awarded to Petrel in 2003
but the agreement was never ratified.

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