Genel acquires majority share in Iraqi Kurdistan’s Miran oilfields

Oil firm Genel Energy acquired a majority stake in Iraqi Kurdistan’s Miran oilfields after inking a $450 million deal with English energy firm Heritage Oil on Tuesday, providing Genel with a 51 percent share in extraction rights in a region that the company says will secure six or seven years of oil for Turkey.

Genel paid roughly $156 million to bring its stake in the jointly owned oil bloc — semi-autonomous Kurdistan’s second largest — up to 51 percent from a previous 25 percent and will also furnish Heritage with a $294 million, 18-month loan that Heritage can pay off by ceding its remaining 49 percent stake to Genel.

The move comes as Genel, which was formed in 2011 after the acquisition of Turkish Genel Enerji by former British Petroleum (BP) CEO Tony Hayward and financier Nat Rothschild, looks to develop Iraqi Kurdistan’s largely untapped oil reserves and feed oil-strapped Turkey’s growing energy needs. Genel President Mehmet Sepil told the Turkish press on Wednesday that the deal would provide Turkey with an easy wellspring of petroleum and gas, stating that the reserves were large enough to “provide Turkey with enough gas to last for six or seven years.” The Kurdistan Regional Government (KRG) estimates that the Miran reserves equal roughly 45 billion barrels of oil and 100-200 TCF of gas.

The deal was also heralded this week by investors and officials at Heritage, an FTSE 250 oil firm managed by mercenary and “security adviser” turned oil baron Tony Buckingham. Heritage stock rose 18 percent after news of the deal broke this week, and officials from the oil giant say the move will help Heritage finance its operations in Nigeria, where it plans to spend $850 million on a 45 percent share in Nigeria’s giant OML 30 field.

Genel, which was almost purchased by Heritage during an unsuccessful round of merger negotiations in 2009, currently holds stakes in eight oil and gas fields in Kurdistan, but the Miran deal marks one of the company’s largest purchases to date.

The Financial Times reported on Tuesday that the purchase also comes in the wake of two deals by Genel to acquire a 44 percent stake in the Bina Bawi gas fields, an acquisition that CEO Hayward said would “further enhance our position as the leading oil and gas company in Kurdistan.” The firm has also agreed to spend $30 million on “community and infrastructure projects” over the next three years in Kurdistan, the paper reports.

Miran will be an operational source of oil and gas for Turkey starting in 2015, the Gas and Oil Journal reported this week, writing that exploration and “early development” of the oil field for local markets would begin by the end of 2013.

Lack of access to cheap oil and gas has long been the Achilles heel of the Turkish economy, with the country’s current account deficit widening as demand for imported gas and oil skyrockets. Rising exports this year have led to a plunge in that deficit from $7.72 billion a year ago to $4.25 billion in June, but the number remains a worrying reminder of the country’s dependence on foreign sources for its energy needs.

23.08.2012
SOURCE: TODAYS ZAMAN