Iraq's largely autonomous Kurdistan region opened the doors to a joint venture refinery operation between Black Diamond Oil Co. and the Rezhwan Co. The new oil refinery will start refining Taq Taq crude oil next week with 1,500 tons being refined on a daily bases.
It has been further decided that both companies had agreed that Black Diamond would increase the daily output of the refinery with a production of 3000 tons per day starting in May 2014. The refinery near the Kurdish capital Erbil will be operated by the private Kurdish group Rezhwan Co., which will process the crude from purchasing above ground reserves in Taq Taq.
Black Diamond will purchase the crude directly from the Taq Taq field, in central Iraq 50 miles east-southeast of Erbil, is the Kurdistan region's largest oil producing field, notes operator Genel Energy PLC.
Proved and probable reserves total 607 million BBL of the currently estimated 1.7 billion BBL of oil in place, and the field is delivering 80,000-100,000 b/d, all of it by truck for the moment. Production averaged 75,500 b/d in 2012 compared with 66,000 b/d in 2011.
The TT-22 Taq Taq Deep exploratory well that targets a gross un-risked resource of 250 million BBL of oil equivalent in Jurassic and Triassic reservoirs is due to spud shortly. Projected total depth is 5,400 m. The Jurassic-Triassic interval tested gas from a well drilled in the mid-1970s at Taq Taq.
The field is covered by good quality 3D seismic data, but sectors to the northwest and southeast are undrilled or sparsely drilled. Genel Energy is comfortable estimating a recovery factor of 30-40%, and it believes that ultimate recovery from Taq Taq field could reach 1 billion BBL.
The work force of Black Diamond includes a plethora of trucks moving the crude oil from the Taq Taq field, which is the bottleneck to increasing production to its refinery in Erbil for the reselling of the refined product petroleum, which is picked up and sold daily.
The good news for Black Diamond partners is with a production of 3000 tons being refined into gasoline on a daily bases the joint venture partners will split giant profits. Black Diamond investment partners will keep 70.5% of the gross profits earning $180,000 USD per day on a small $60 dollar per ton profit for new petroleum, while Rezhwan will keep the difference after expenses.
Few can deny the tremendous developmental potential Iraq's oil reserves provide to its people. Erbil's production is now among the largest in OPEC, and is why Black diamond partners put up the money to buy the above ground crude for the refinery.
According to OPEC, Iraq's resources of 143 billion barrels of crude oil and 126.7 trillion cubic feet of gas are the fourth largest in the world after Venezuela, Saudi Arabia and Iran. However, Iraq's oil production is almost half that of Iran, meaning there is plenty of room for growth.
Kurdistan accounts for 43.7 billion barrels of proven oil reserves, 25.5 billion more barrels of unproven reserves and between 3 and 6 trillion cubic meters of gas (30% of Iraq's proven oil reserves). If Kurdistan were a country, the amount of oil and gas reserves would place it among the top 10 oil rich countries in the world.
Recently, Iraq's Kurdistan has been one of the hottest spots for the global oil and gas industry. The size of the oil market has lured many iconic oil and gas personalities including Tony Hayward, the former chairman of BP, and has attracted over US$10bn in investments from foreign oil companies, according to the Financial Times. At first the Kurdistan region attracted smaller regional oil and gas players, but recently industry heavyweights like Exxon Mobil, Chevron and Total has been making deals with the Kurdistan Regional Government.
Ronald Flynn the founder of Black Diamond said, "I believe we are in good company with heavyweights like Exxon mobil, chevron, and Total working very close to where our refinery is in Erbil Kurdistan. Moreover I am confident we will be able to continue refining crude oil into gasoline for a long time."
This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of the 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections.
Updated 15 Apr 2014 | Soruce: Digital Journal | By S.Seal