Genel drops Kurdistan Region licences

LONDON, January 24, 2017 – Genel Energy will exit the Chia Surkh and Ber Bahr licences in the Kurdistan Region of Iraq, the company said in a trading and operations update notice on Tuesday.

Pending approval from the Kurdistan Regional Government’s Ministry of Natural Resources, Genel will transfer its 40% stake in Chia Surkh to partner Petoil. While Genel will receive an initial consideration of USD 2 million, followed by the gradual pay-out of USD 25 million once production begins, the relinquishment will result in a 2016 impairment of USD 198 million.


Genel is also anticipating government approval for its exit from the Ber Bahr licence, in which it held a 40% stake. The relinquishment of its 40% shareholding in Dohuk has been concluded. Finally, the company said it was looking to engage partners in the Miran and Bina Bawi gas licences through a farm-down.

“2016 was a major step forward for the monetisation of oil exports from the Kurdistan Region of Iraq. We received $207 million in cash proceeds for oil sales and receivable recovery. These payments in turn allowed for work programmes to resume at Taq Taq and Tawke. The KRG [Kurdistan Regional Government] has confirmed that payments will continue, allowing us to plan with confidence for 2017,” Genel Chief Executive Murat Özgül said about the company’s operations.

In 2017, Genel Energy expects to carry out workover operations on the TT-07z well in the Taq Taq field, as well as spud a new appraisal well, the TT-29, using a new rig. The unit is expected to arrive on site next month. Taq Taq, which Genel jointly operates on a 44% working interest, is expected to produce between 24,000 bopd and 31,000 bopd this year. Output from Tawke, in which the company holds 25%, is projected to remain level at 115,000 bopd.

At Miran and Bina Bawi, Genel’s assets that underpin the Kurdistan Regional Government’s efforts to begin gas exports to Turkey and Europe, activity will be “largely technical and commercial in nature.” The company expects upstream gas development plan studies and the pre-FEED to be concluded “shortly,” with 2017 FEED work on gas treatment and processing facilities, as well as the environmental and social impact assessment study contingent on a successful farm-down.

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