Canadian oil company ShaMaran Petroleum restarted operations at its Atrush field, selling oil to a local refinery via pipeline in Iraqi Kurdistan.
In its statement for the nine months ended September 30, the company highlighted its focus on cost control and cash preservation.
Complete statement from ShaMaran Petroleum:
ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) released its financial and operating results along with the related management’s discussion and analysis (MD&A) for the three and nine months ended September 30, 2023. View PDF
Garrett Soden, the President and CEO of ShaMaran, has stated that the Iraq-Turkey pipeline has remained shut for over seven months now, and it is still uncertain whether exports will resume anytime soon. The company is actively searching for commercial solutions to export crude oil and receive payments. Due to the problematic situation in Kurdistan and the broader region, ShaMaran is concentrating on controlling costs and preserving cash. The company is collaborating with its operating partners to enhance local oil sales, which has resulted in timely payments and better cash flow generation for Q3. With the Sarsang production increasing and Atrush production recently restarted, ShaMaran expects higher revenues and cash flow in Q4.
Corporate Highlights:
- The closure of the Iraq-Turkey pipeline, also known as ITP, since March 25, 2023, has significantly impacted ShaMaran’s operations and financial results. Currently, the company is discussing with the relevant parties to reopen the ITP export route for crude oil from Kurdistan.
- ShaMaran generated $13.1 million in operating cash flow during the quarter due to strong local sales from Sarsang and proactive cost-cutting at both the corporate and functional asset levels.
- During Q3, Sarsang’s oil production increased compared to Q2. However, it is still operating below total capacity. The oil is being sold to local refineries via trucking every week, and the sales volume and price vary weekly. These sales are expected to continue until ITP exports resume.
- Atrush was shut-in during Q3 due to lack of oil storage and trucking facilities. Production restarted on Nov 7, 2023, with sales to a local refinery via pipeline.
