I’ve been telling you to buy Kurdish oil companies for the last few months. But just yesterday, the spillway to a 140 billion barrel oil reserve was thrown open…
Crisis and Opportunity readers were happy to see one small company jump 10% on the news.
You see, after a decade of squabbling, the Iraqi government in Baghdad and the Kurdistan leaders in Northern Iraq have agreed to an oil share plan that will fill the coffers of both groups. This is a big deal.
From NPR:
Under the deal, announced by Iraqi Finance Minister Hoshyar Zebari, a Kurd, the Kurds will release 300,000 barrels per day of oil from Kirkuk. Another 250,000 barrels per day would be exported from the semiautonomous Kurdistan Region through Turkey.
In return, Baghdad said it would release 17 percent of the budget allocated to the Kurdish region, and would also give an extra $1 billion to Kurdish peshmerga who are fighting the Islamic State militant group.
Oil for Blood
Hard times get deals done. This deal has been on the table since the Americans first proposed it 10 years ago. The catalyst to sign has been the success of ISIS forces, many of whom are the old guard left over from Saddam Hussein’s army.
The oil share agreement means that both Baghdad and the Kurds will have the cash to pay their soldiers and buy more ammo. They will now be on the offensive.
It also means oil companies can continue to increase capex and build out production without fear that their contracts will become invalidated.
Pump, Baby, Pump
It is working beyond all expectation.
The Kurdish oil companies using modern U.S. technology are ramping up production.
According to NBC News:
“They’ve been able to ramp it up quite impressively, despite ISIS,” oil trader John Kilduff said of the Iraqis’ oil production, which hit 3.4 million barrels a day in November. That level, which earned Baghdad $5.2 billion, was 100,000 barrels higher than the previous month and meant that Iraq is now pumping more oil than any OPEC member other than Saudi Arabia.
This is amazing.
Just think about it: War-torn and much maligned, Iraq now produces more oil than any OPEC member save Saudi Arabia.
Iraq now produces more oil than Libya, Venezuela, and Iran. And given this new agreement, Iraq production will expand — fast.
Iraq has enough oil that it could produce 12-16 million barrels a day. And much like the Bakken and Eagle Ford, the number of proved reserves continues to grow:
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Fortunes Will Be Made
There has been a lot of press about ISIS smuggling oil over the Turkish border and selling it for $25 a barrel.
This oil comes from failing Syrian wells. Most of what ISIS controls is sand.
Baghdad and the Kurds control the oil in Iraq. This agreement means they will get the war materials necessary to destroy the Islamic caliphate.
The long battle for rights to Iraqi oil is now over… except for the blood and the noise.
Houston on the Tigris
Once that is done, the Iraqis and the Kurds will start to make money.
Mark my words: In a year or two, you will be hearing stories about the “new” Iraqis driving Lambos and Kurds building McMansions.
In five to seven years, the Iraqi Sovereign Fund will be buying fracking companies in Texas.
The only question that remains is whether you want to be one of the people who bought here, at the very bottom and during the height of the fear… or if you want to be that guy who says, “I almost bought that back in 2014… Wow, it’s up 1,200%!”
Don’t be that guy, not again. Act now by clicking here.
All the best,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
