The Deadlock Over Kurdish Oil Exports Continues

Politics, Geopolitics & Conflict

The Iraqi parliament has delayed a decision on Kurdish crude oil exports until January, prolonging a year-long suspension of deliveries amid disputes over authority and compensation. The deadlock stems from disagreements over the costs of oil production and transport in Kurdistan, prompting Kurdish parliamentarians to withdraw from discussions. An ICC ruling in March 2023 in favor of Iraq barred Turkey from authorizing Kurdish exports via the Iraq-Turkey pipeline without Baghdad's approval, further complicating the situation. The stalemate continues to impact international oil companies operating in the region, with operations suspended until clear terms are established.

Discovery & Development

Munich Re's asset management arm MEAG is weighing the sale of its 13.9% indirect stake in Amprion, Germany's operator of 11,000 km of high-voltage power grids, to address rising capital expenditure needs, including €27.5B planned over the next five years. Germany's federal network agency estimates a €450B investment requirement to upgrade the country's power infrastructure by 2045. Analysts value MEAG’s stake at €886M, while RWE’s 25.1% stake is estimated at €1.6B, reflecting high stakes in the ongoing energy transition. This is crucial as higher interest rates pressure returns on regulated power grids, forcing strategic rethinks among key stakeholders.

Wintershall Dea (Harbour Energy, HBR.L) has confirmed gas discoveries in appraisal well 6507/4-5 S in the Norwegian Sea, approximately 270 km north of Kristiansund. Preliminary estimates place the Sabina discovery in the Lange Formation at 17-39 MMboe recoverable, while the Adriana discovery in the Lysing Formation is confirmed at 28-43 MMboe. The well, drilled by Transocean Norge, reached a vertical depth of 4,111 meters, successfully tested at a maximum flow rate of 530,000 Sm³ of gas and 80 Sm³ of condensate per day. Operators Wintershall Dea and partners Petoro, Aker BP (AKERBP.OL), and Orlen are evaluating tieback options to existing infrastructure.

Vår Energi (VAR.OL) has identified an additional 4-25 MMboe of recoverable resources in the Countach appraisal well near the Goliat field in the Barents Sea, bringing total Countach reserves to 10-55 MMboe. Vår, Majority-owned by Eni (ENI.MI), plans further exploration in 2025 targeting over 100 MMboe in potential resources, leveraging Goliat’s existing production capacity. Located 13 km northeast of Goliat, the Countach discovery reinforces the area’s production potential despite Goliat’s recent decline. Vår holds a 65% stake in the license, with Equinor (EQNR.OL) owning the remaining 35%.

Pantheon Resources (PANR.L, PTHRF) has announced a discovery in its Megrez-1 well on Alaska's North Slope, encountering light liquid hydrocarbons across three zones in the Ahpun field, with porosities exceeding 20% in key intervals. The well, drilled to a measured depth of 9,358 feet, showed a 510-foot gross hydrocarbon-bearing vertical interval in the Prince Creek formations and additional reservoirs in the topset horizons. Long-term production testing is slated to begin in Q1 2025, supported by the Nabors-105AC rig stationed on-site. With 100% ownership of 258,000 acres and 1.6 billion barrels of contingent oil resources, Pantheon emphasizes its strategic proximity to existing Alaskan infrastructure to reduce development costs and timelines.

Deals, Mergers & Acquisitions

BP (BP.L) and Japan’s JERA have formed a 50-50 joint venture, JERA Nex bp, consolidating up to 13 GW of offshore wind capacity and planning $5.8B in project funding by 2030, with BP contributing $3.25B. This move reflects BP’s strategic shift under CEO Murray Auchincloss toward profitability over renewables, mirroring trends at Shell (SHEL.L) and Equinor (EQNR.OL). The JV will be among the top five offshore wind operators globally, pooling assets from the British North Sea, Germany, and the U.S. East Coast. Positioned as a "capital-light" growth vehicle, this collaboration allows BP and JERA to scale operations while tackling industry-wide challenges like rising costs and supply chain hurdles.

Vintage Energy (ASX:VEN) and Galilee Energy (ASX:GLL) have terminated their proposed merger, initially aimed at uniting complementary portfolios in eastern Australia's onshore gas basins. The decision follows shifts in the gas market that highlighted the latent value of uncommitted resources, prompting both companies to prioritize shareholder interests independently. The merger would have seen Galilee shareholders receive two Vintage shares per Galilee share, resulting in a 60/40 ownership split of the combined entity. With forecasted East Coast gas shortages from 2026, both firms are now refocusing efforts to capitalize on emerging opportunities in a tightening market.

Serica Energy (SQZ.L) is acquiring Parkmead E&P Limited, including 50% stakes in the UKCS licenses P2400 (Skerryvore) and P2634 (Fynn Beauly), for an initial £5M ($6.4M), with up to £9M ($11.5M) in deferred payments over three years and milestone-based contingent payments. The acquisition will consolidate Serica's interest in Skerryvore to 70%, making it the operator, while gaining strategic flexibility for development projects like the Fynn Beauly heavy oil discovery. Parkmead retains its Dutch natural gas and UK renewables assets, leveraging the deal's £14M cash consideration to expand its core operations. The transaction underscores Serica’s focus on UK North Sea development amid challenging regulatory and market conditions.

Rosneft and Reliance have inked a record-breaking 10-year deal for nearly 500,000 barrels of Russian crude oil per day, valued at approximately $13 billion annually. This agreement solidifies India's position as Russia's largest oil importer, surpassing the EU following sanctions imposed on Moscow. The deal highlights India's strategic importance as one of the fastest-growing energy markets, particularly as China's demand growth slows.