Petrel Resources

AGM Statement
22 August 2007

Highlights of the Managing Director’s Statement Petrel Resources AGM:

The expected passage of the Iraqi Hydrocarbon Law opens the door to full participation by private companies in exploring for and developing Iraqi oil. Iraq is one of the last great under explored and under developed onshore oil provinces. The exploration success rate is high. Iraq’s oil bearing structures are large with straightforward reservoirs and low geological and engineering risks. The deep horizons which provide most production in neighbouring Saudi Arabia, Kuwait and Iran have to date been largely untouched in Iraq.

In normal circumstances a state oil company would limit foreign involvement, but Iraq’s rare circumstances require attractive terms to entice foreign investment and technology. Our competitive advantage is our relationships built up over 10 years. We have the capacity and the ability to increase quickly recoveries from existing reservoirs and to add new barrels to Iraq’s reserves.

Petrel has been active in Iraq for the last decade. The successful management of the large Subba & Luhais oil field development in Southern Iraq shows that dedicated contractors can operate on the ground. To date, we have suffered no direct incidents and have enjoyed the warm cooperation of local communities. The Iraqi authorities and especially the Ministry of Oil, continue to be committed to and supportive of our efforts.