Genel Energy CEO Welcomes Kurdish Commitment to Pay IOCs

Genel Energy's Chief Executive Murat Ozgul welcomed Thursday the Kurdistan Regional Government's announcement that it would commit to pay, on a monthly basis, producing international oil companies (IOC) a portion of the revenues from its direct crude oil sales from September 2015.

Announcing, Genel's first-half results for 2015, Ozgul said that regular and predictable payments "will allow Genel to fully capitalize on…[its] strategic opportunities". Ozgul's statement comes after Jon Ferrier, chief executive of fellow Iraqi Kurdistan producer Gulf Keystone Petroleum said that the KRG's public commitment (announced Monday) to monthly payments "represents a further important step towards the establishment of a regular payment cycle for" Gulf Keystone's crude oil sales from its Shaikan field production sharing contract.

Producing IOCs in the Kurdistan region have received "hardly any payments for their crude oil production since May 2014", according to the KRG, which has pledged to make additional revenue available to IOCs as exports increase in early 2016, in addition to the pledged monthly contribution from its direct crude oil sales.

Genel Energy’s 1H results released Thursday revealed a revenue increase of $7.2 million during the first six months of the year, compared to the same period last year, and a pre-tax profit of $31.4 million (1H 2014: £70.7 million). Production during 1H 2015 was 88,800 barrels of oil equivalent per day, compared to 63,000 boepd in 1H 2014.

Oil sector analysts at London-based investment bank Westhouse Securities described General's 1H 2015 statement as containing "solid results with no major surprises".

Westhouse also noted that Genel highlighted that the KRG security forces, the Peshmerga, have successfully repelled ISIS from KRG territory and so the firm's operations remain secure.

"Establishing regular payments to IOCs for oil exports is the next key development, something the KRG is clearly keen to ensure, in order for further exploration, appraisal and development to continue," Westhouse added.


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