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Tony Hayward, chief executive of oil company Genel Energy, said the recent influx of oil supermajors into Iraqi Kurdistan had increased the likelihood of an agreement between the Kurdish authorities and Baghdad over who controls the region’s oil.
Kurdistan has been in a long-running dispute with Iraq’s central government over oil production and exports from the autonomous region. In April, the Kurdish authorities suspended crude oil exports in a row over payments, though they restarted them this month.
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But the conflict has not deterred some of the world’s largest oil companies from investing in the region. Over the past few months, ExxonMobil, Chevron and Total have all risked Baghdad’s anger by entering Kurdistan.
Also, the Kurdistan Regional Government (KRG) is planning a 1m barrel-a-day pipeline to the Turkish border that would get around Baghdad’s control of crude exports from the autonomous region. Mr Hayward described the pipeline, which will be completed by the end of next year and has been strongly condemned by the Iraqi government, as a “game-changer”. Ties between the KRG and Turkey were further cemented last May when the two signed a deal allowing for cross-border trade in oil products.
Mr Hayward, the former chief executive of BP, said such developments had “reinforced the KRG’s position”, strengthened its hand in negotiations with Baghdad and were a “strong indication that there will be an agreement” between the two sides.
That would be good news for Genel. which is the largest independent oil producer in Iraqi Kurdistan and has been hit by political uncertainty in the region. The company was formed a year ago when a cash shell created by Mr Hayward and financier Nat Rothschild and floated in June last year bought Turkey’s Genel Enerji. But its share price is now 30 per cent below its float price.
Production has fallen to 39,000 barrels a day, from 41,000 b/d a year ago, as the dispute between Baghdad and Erbil shut down exports from Genel’s two big producing fields in Kurdistan, Taq Taq and Tawke.
But Mr Hayward expressed confidence that Kurdistan’s oil would one day flow freely. “I don’t know anywhere in the world where you have 1m barrels a day behind pipe and it doesn’t find its way to market,” he said. This would come either through a bilateral deal between the KRG and Turkey, or a peace agreement between the Kurdish authorities and Baghdad, he said.
Mr Hayward was speaking as Genel unveiled results for the first six months of the year, posting revenues of $123m and profit before tax of $22.3m. It said sales for the year would be $250-300m and production 40,000 b/d, if there are no Iraqi export sales for the rest of the year.
Genel also said it had expanded beyond Kurdistan by acquiring oil interests off the coasts of Malta and Morocco. Last week, the company said it was buying an additional 26 per cent interest in Miran, a huge natural gasfield in Kurdistan, from Heritage Oil for $156m, and became joint operator.
The company said it still had $1bn available to invest, and was “actively exploring a number of compelling opportunities in the Middle East and Africa”.
Kurdistan has been in a long-running dispute with Iraq’s central government over oil production and exports from the autonomous region. In April, the Kurdish authorities suspended crude oil exports in a row over payments, though they restarted them this month.
Heritage receives $450m Genel boost
Genel Energy flaunts $1.9bn cash pile
Beyondbrics Turkey’s oil diplomacy with Iraqi Kurds
Afren confirms major Kurdistan oil find
Total faces ultimatum on Kurdistan deal
ON THIS TOPIC
Genel founders collect shares worth £164m
Genel Energy books £8.3m interim loss
IN OIL & GAS
Premier Oil says it’s ready for Falklands
Conoco retreats further from Russia
Woodside puts Pluto expansion on hold
Soco to push ahead with DRC research
But the conflict has not deterred some of the world’s largest oil companies from investing in the region. Over the past few months, ExxonMobil, Chevron and Total have all risked Baghdad’s anger by entering Kurdistan.
Also, the Kurdistan Regional Government (KRG) is planning a 1m barrel-a-day pipeline to the Turkish border that would get around Baghdad’s control of crude exports from the autonomous region. Mr Hayward described the pipeline, which will be completed by the end of next year and has been strongly condemned by the Iraqi government, as a “game-changer”. Ties between the KRG and Turkey were further cemented last May when the two signed a deal allowing for cross-border trade in oil products.
Mr Hayward, the former chief executive of BP, said such developments had “reinforced the KRG’s position”, strengthened its hand in negotiations with Baghdad and were a “strong indication that there will be an agreement” between the two sides.
That would be good news for Genel. which is the largest independent oil producer in Iraqi Kurdistan and has been hit by political uncertainty in the region. The company was formed a year ago when a cash shell created by Mr Hayward and financier Nat Rothschild and floated in June last year bought Turkey’s Genel Enerji. But its share price is now 30 per cent below its float price.
Production has fallen to 39,000 barrels a day, from 41,000 b/d a year ago, as the dispute between Baghdad and Erbil shut down exports from Genel’s two big producing fields in Kurdistan, Taq Taq and Tawke.
But Mr Hayward expressed confidence that Kurdistan’s oil would one day flow freely. “I don’t know anywhere in the world where you have 1m barrels a day behind pipe and it doesn’t find its way to market,” he said. This would come either through a bilateral deal between the KRG and Turkey, or a peace agreement between the Kurdish authorities and Baghdad, he said.
Mr Hayward was speaking as Genel unveiled results for the first six months of the year, posting revenues of $123m and profit before tax of $22.3m. It said sales for the year would be $250-300m and production 40,000 b/d, if there are no Iraqi export sales for the rest of the year.
Genel also said it had expanded beyond Kurdistan by acquiring oil interests off the coasts of Malta and Morocco. Last week, the company said it was buying an additional 26 per cent interest in Miran, a huge natural gasfield in Kurdistan, from Heritage Oil for $156m, and became joint operator.
The company said it still had $1bn available to invest, and was “actively exploring a number of compelling opportunities in the Middle East and Africa”.
