Thanks for your response. Here's a few general thoughts / questions. Feel free to respond to any that you find interesting / provocative....
Do you have any sense what the break point might be to shift transport means from trucks to pipelines? I've begun looking into this now that we have better ideas of production / operating revenues and costs.....it seems a given, assuming security stays relatively stable that there will be significant pipeline construction. The question would be obtaining access....this is also something I'm digging deeper on......
In reference to the "local entrepreneurs"....my initial reaction to this is counterparty risk....this doesn't sound like there would be any sovereign guarantees....
I like this low cost strategy of just getting the oil out of the ground and cash flows coming in while they continue exploration / upgrading the quality of the reserves. That was what I was missing....the reserve based financing. What's interesting to me from a finance perspective is the effect of the 80% cost recovery aspect of the license on financing strategy, this allows for a very lucrative cash flow stream in the early stages, perhaps facilitating a lot more leverage than a traditional oil deal....
Finally....what are your thoughts on entering into a JV not just for the topping facility, but also for some of the project.....From all the research I've done on Iraqi oil resources, and tell me if you disagree, is that the prospective heavy oil resource in the country could be north of 50BN barrels....the obvious concern to any further slicing up of the project is further dilution of equity economics....but given our prospective resource size (not including any future licenses / projects), I believe it will be so significant that the financial resources / expertise to scale up production and share the risk burden would be worth it....almost shifting to a royalty type of company.....Obviously all of this is speculation, but its still fun nonetheless.....
