18 hours ago
Petrel submits Proposal re Relinquished Block from 4th Licensing Round
By John Lee.
Irish-based Petrel Resources last week issued unaudited preliminary results for the year ending 31 December 2024.
The company, which announced a fundraising in March, said that it has submitted a proposal to undertake contractor obligations on a relinquished block from Iraq's 4th Bid Round, and has also prepared an updated development plan for the Merjan oil field. The company said it sees opportunities in recovering flared gas and liquids.
Full statement from Petrel Resources:
Highlights
Market overview 2024 set consumption records for oil and LNG consumption, but oil prices fell in early 2025 due to the 'Trump tariff war' triggering fears of reduced demand.
Uncertainty increases risk and delays investment decisions.
Available fiscal terms, however, reflect the boom conditions between 2003 and 2014 rather than current market conditions. States have been slow to update contractual terms to align interests, which deters development.
Oil explorers are not yet attracting strong investor interest in western markets. Majors buy shares back and issue dividends rather than invest the c. $610 billion necessary to supply future demand.
Assets overview In Ghana, ratification discussions with the Ghanaian authorities on Tano acreage have re-commenced - though acreage adjustments are likely, and governance remains an issue.
In Iraq, there may be early opportunities to recover gas and liquids currently being flared.
Petrel submitted a proposal to undertake contractor obligations on a relinquished Block from the 4 th Bid Round.
An updated Merjan oil field development proposal has been prepared.
Iraqi oil output was c.4 million barrels daily in Spring 2025, with export growth constrained by contractual terms and OPEC+ agreements.
Petrel seeks direct negotiations, where possible, rather than bid rounds, which are expensive and high risk, thus inappropriate for juniors.
Outlook
The board is considering expansion opportunities in oil & gas, and energy-related projects worldwide. Our group participates in the EU Commission's Critical Resource Minerals' Initiative, which offers attractive diversification given current market conditions. We offer an established record and potentially high liquidity and capital appreciation for the right story. As investors re-focus on 'hard industries' and cash flow, this is a time of opportunity.
Recent months remind investors of some eternal truths: market uncertainty has increased, amid armed conflict and trade wars. Western dependence on Chinese processing of Critical Resource Minerals means that efforts to reduce dependence on fossil fuels will not reduce exposure to distant sources and supply chains.
Policy-makers have discovered the limits of their bold dreams of a Green transition: energy costs have risen rather than fallen. The new technologies bring new headaches: electricity storage turns out to be prohibitively expensive for grid-scale coverage. EVs continue to penetrate markets but are price-competitive only in China. But developed economies prefer to protect their automotive sectors rather than import cheap Chinese EVs. In such policy myopia lies the roots of the next oil boom.
Like all previous energy transitions, Green sources turn out to be additive to rather than replacing traditional, r eliable fuels - which will continue to dominate the 21st century:
During 2024/25 there were a serious of close-calls, power failures, and brown-outs globally, culminating in the Iberian black-outs of April 2025. These were not the routine power failures common in the global south, or planned "load-shedding" in South Africa.
These power failures were caused by over-dependence on intermittent renewable generation, allied with inadequate investment in legacy grids designed for centralised, reliable world-scale plants fuelled traditionally by coal, and then increasingly by nuclear and natural gas. The failure was not that of renewable generation per se, since hydro-power or geothermal generally provide reliable supplies.
The problem was with unpredictable intermittent generation, which produces Direct Current, rather than Alternating Current, and consequently does not deliver significant inertia to protect against periodic interruptions. Battery storage, is expensive and would require vast quantities of Critical Resource Minerals to adequately back a grid up. Traditional storage methods such as hydro are available for only a small percentage of demand. It turns out that the intermittent renewable generation on which the "Green transition" relies is only suitable for up to 30% of demand which is the natural surplus in electrical systems. Beyond that point, costs and risks soar.
This means that Natural Gas will continue to dominate electrical generation, both directly, and as essential back-up for the reliability modern economies require. In price-sensitive markets, coal will continue to dominate. Nuclear power is also an effective solution, but involves bureaucratic planning requirements, up-front costs, and is opposed politically in some developed societies.
Consumption data bear this out: recent years have seen record demand for oil and even coal. LNG is now 55% of total traded gas, helped by malicious damage to pipelines and the time needed to extend more gas pipelines to Asian consumers.
Markets are always transitioning, which is why an average 3.75% global economic growth translates into only 2.1% energy consumption growth due to greater efficiencies. But every energy transition in history has added new fuels rather than substituted them. Legislators are unlikely to achieve what market forces cannot.
And yet there has been a dramatic under-investment in reliable energy exploration & development since 2014. This is also true even of those Critical Resource Minerals necessary to fuel the new industries, which include Copper and Nickel as well as Lithium, Cobalt and the other 50-odd minerals.
To maintain adequate oil & gas supplies the world needs about $610 billion of investment (depending on materials' costs and rig-rates), but the industry invests only c.$360 billion - much of it in existing properties and basins of super-majors and National Oil Companies. There has been little frontier exploration since 2015. Most of the developing world is starved of investment. Instead, producers prefer to issue dividends and buy shares back.
Part of the reason is that politicians also display myopia about how to deliver effective exploration. Risk-investors require a risk-adjusted rate of return. The higher the uncertainty, the more return investors require. Best results are achieved by aligning interests, and linking taxes to profits, rather than requiring up-front payments, or royalties.
Formal bid rounds, involving up-front fees, qualification criteria designed for majors, and limited upside, are not how you expedite projects, keep cost control and optimise reservoir recovery. That is why Petrel prefers direct negotiations, where possible, after which we can bring partners via farm-ins.
But our industry is cyclical, and majors' caution offers opportunities for independents - who have always pioneered new approaches, from offshore drilling to fracking. So far, the emerging supply constraints have not filtered through to exploration & development. But when they do, there will be a sharp reversal in sentiment, rewarding those farsighted enough to develop attractive acreage ripe for exploitation.
We have received several approaches offering new oil & gas exploration projects but also in Helium and other energy-related projects. So far, all prospects have fallen short on legal title, price expectations, or financing terms. There is no value for Petrel shareholders in over-paying.
Petrel is an EU company, and our involvement in the EU Commission's Critical Resource Minerals' "Team Europe" has fostered relationships with industrial buyers, financing institutions and key decision-makers. There are surprisingly few juniors able to swim in all these seas.
In the meantime, there is market interest in Petrel's strong shareholder following and liquidity - especially at times of intense news-flow. Accordingly, we continue to explore expansion opportunities.
Financing
There are contrarian investors keen to fund the right project. As during the pandemic and previous times of turbulence, directors and their supporters are open to covering working capital needs, and are prepared to participate in any necessary, future fundings.
(Source: Petrel Resources)
